The Strategic Framework for Growth and Poverty Reduction 2013-2017 of the Republic of Mali stated that the energy sector covers priority economic development issues. The strategy is to develop new and renewable energies to reduce the share of thermal sources in the production and increase access to energy for all uses.
To support the strategy of access to energy in rural areas of the Government of Mali, AFD is considering financing through a sovereign loan and a grant from the AITF (national desk SE4ALL), a rural electrification project aiming at hybridizing with solar panels about sixty isolated thermal generators, currently managed by private operators, and extend the associated mini-networks.
The project SHINE (Solar Hybridization to Increase National Electrification) consists of two components:
(i) an investment component to hybridize isolated thermal generation plants with renewable energy sources (solar PV) and expand decentralized mini-networks;
The solar hybridization option is justified for the following reasons (i) the high cost of producing electricity from diesel generators resulting in great financial difficulties for private operators, not adapted to the willingness to pay of the users, and in the end the lack of sustainability of the infrastructure; (ii) the distance of these communities to the national electricity transmission system that does not allow an economically viable connection in the foreseeable future and (iii) the downward trend of the solar costs for many years.
(ii) a capacity building of AMADER component and through it, of private operators currently operating power plants.
AMADER, to date, has some experience on such projects, (hybridization of 12 pilot sites since 2013). However, the SHINE project will result in a real change of scale. It is therefore proposed to include an institutional component of technical assistance to AMADER which should include the following:
• support the project team in the implementation of the technical components and project procurement (tendering, selecting contractors, monitoring contracts, receptions);
• support the project team in its relationship with private operators;
• support the implementation of promotion and information campaigns in the target villages, and a social component intermediation.
The main expected impacts of this project are to improve the quality of service for about 24,000 people, and to provide access to modern electricity to 132,000 people. Apart from these direct beneficiaries, the project will also reduce inequalities in population access to basic services, providing reliable electricity to social infrastructures in the localities, and contributing to economic development in targeted communities by supporting local economic actors (private operators, craftsmen, tradesmen).
The project benefits from a EUR 3.6m TA for the supervision of the project, visibility and capacity building for AMADER and private operators in targeted localities. The activities related to the grants are expected to start during Q2 2016 and end during Q4 2020.