Souleymane OUEDRAOGOSouleymane OUEDRAOGOEconomist and Statistical Engineer

souleymane.ouedraogo@sonabel.bfSociété Nationale d’Electricité du

Burkina (SONABEL)

Luanda , le 19/04/23

18th Congress of the Association of Power Utilities of Africa (APUA)

OUTLINEOUTLINE

1. INTRODUCTION

2. PRESENTATION OF ECOWAS

3. ELECTRICITY OFFER IN THE ECOWAS REGION

4. METHODOLOGY AND ASSUMPTIONS

5. TARIFF BENCHMARKING

6. MUTUALLY BENEFICIAL EXCHANGES

7. TARIFFS & PURCHASE POWER

8. CONCLUSION

INTRODUCTIONINTRODUCTION

Power plays a key role in supporting economic growth and in improving households’ living conditions;

Electricity tariffs are a major economic policy instrument whose inadequacy can compromise the development of the power grid and heavily weigh on public finances (subsidy, emergency measures, etc.);

Access to power is influenced by tariff levels and people’s power purchase, two factors that could account for the low rate of electrification in the ECOWAS region (about 20 percent in 2006);

Appropriate solutions are to be found to allow the largest number of households possible to access power at the least cost.

A grouping of 15 States founded in 1975 to promote economic integration;

A GDP per capita of USD 572 in 2011;

A population of 290 million (in 2008) and a target of 60 percent of access to power in 2015;

PRESENTATION OF ECOWASPRESENTATION OF ECOWAS

Mali Niger

NigeriaBenin

Togo

Ghana

Burkina

Côte d’Ivoire

Liberia

Guinea

Sierra Leone

Guinea Bissau

Gambia

Cape Verde Senegal

ELECTRICITY OFFER IN THE ELECTRICITY OFFER IN THE ECOWAS REGIONECOWAS REGION

Over 42.78 TWh generated in 2008 by oil-fuelled plants (24%), gas-fuelled plants (43%), biomass-fuelled plant (1%) and hydropower plants (32%);

90 percent of the power installed by 4 countries (Nigeria (59%), Ghana (16%), Côte d’Ivoire (9%) and Senegal (6%) for respective consumptions of 52%, 18%, 13% et 5%;

Some countries have a relatively significant and affordable power potential (hydropower, gas) they could harness to improve the energy situation in the ECOWAS region.

METHODOLOGY AND ASSUMPTIONSMETHODOLOGY AND ASSUMPTIONS

METHODOLOGY AND ASSUMPTIONSMETHODOLOGY AND ASSUMPTIONS

Contract power/Energy consumed

Scenarios

Low Medium High

Social LV(kW) 0.20 0.50 1.00(kWh) [5.8 , 138.2] [14.4 , 345.6] [28.8 , 691.2]

Single-phase LV(kW) 2.00 4.00 10.00(kWh) [57.6 , 1382.4] [115.2 – 2764.8] [288.0 – 6912.0]

Three-phase LV (kW) 7.00 15,00 20.00(kWh) [201.6 , 4838.4] [432.0 , 10368.0] [576.0 , 13824.0]

24 monthly consumptions per country for each class of clients and for each scenario, that is 216 typical categories in the 15 ECOWAS countries.

Other methodologies: the benchmarking of electricity tariffs applied by power utilities is a complex and delicate exercise:

• Ex-post average cost (Eurostat);• Static benchmarking (former UPDEA).

Limitations of the review:• Great diversity of tariff schedules;• Exchange losses and gains against the US dollar.

TARIFF BENCHMARKINGTARIFF BENCHMARKING

Social Tariff (Cents USD/kWh) – Power of 0.5kW

A family consuming 100 kWh/month in Liberia would reduce their bill by USD 40 with the Nigerian schedule!

A family consuming 100 kWh/month in Liberia would reduce their bill by USD 40 with the Nigerian schedule!

TARIFF BENCHMARKINGTARIFF BENCHMARKING

A family consuming 1000 kWh/month in Cape-Verde would reduce their bill by USD 418 with the Guinea schedule!

A family consuming 1000 kWh/month in Cape-Verde would reduce their bill by USD 418 with the Guinea schedule!

Tariff for single-phase LV current (Cents USD/kWh) – Power of 4kW

TARIFF BENCHMARKINGTARIFF BENCHMARKING

A family consuming 2000 kWh/month in Cape Verde would reduce their bill by USD 430 with the Guinea schedule!

A family consuming 2000 kWh/month in Cape Verde would reduce their bill by USD 430 with the Guinea schedule!

Three-phase LV current (Cents USD/kWh) – Power of 15kW

MUTUALLY BENEFICIAL EXCHANGESMUTUALLY BENEFICIAL EXCHANGES

Power exchanges between ECOWAS countries are mutually beneficial (savings for some countries and gains for others):o Savings for Benin, Burkina Faso, Cape Verde, The Gambia, Guinea Bissau, Liberia,

Mali, Senegal, Sierra Leone and Togo;o Gains for Côte d’Ivoire, Ghana, Guinea and Nigeria.

TARIFFS & PURCHASE POWERTARIFFS & PURCHASE POWER

Real GDP per capita in 2011 (in USD, at the 2000 price, calculated based on the exchange rate for 2000)Source: IMF

Some countries have higher tariffs but if households do have a substantial purchase power, they will be able to afford better services than their counterparts in countries with low tariffs but a lower purchase power.

IncomeTariffs

HIGH (> Tarif CEDEAO) LOW (< CEDEAO Tariff)

HIGH (> 400 USD) Cape Verde, Senegal, Gambie Nigeria, Ghana, Côte d’Ivoire

LOW (<400 USD)Liberia, Togo, Sierra Leone, Guinea

Bissau, Mali, Burkina , BéninNiger, Guinea

TARIFFS & PURCHASE POWERTARIFFS & PURCHASE POWER

COUNTRIESTHREE-PHASE SINGLE PHASE SOCIAL

With exchange

Without exchange

With exchange

Without exchange

With exchange

Without exchange

Guinea 0.98% 0.98% 0.85% 0.96% 0.21% 0.21%Nigeria 0.98% 1.36% 0.85% 0.85% 0.21% 0.83%Ghana 1.16% 1.59% 1.14% 1.77% 1.37% 2.00%Côte d'Ivoire 1.59% 2.22% 1.77% 2.25% 2.00% 2.21%Cape Verde 2.22% 2.31% 2.25% 2.31% 1.06% 1.37%ECOWAS 3.96% 3.96% 3.90% 3.90% 3.62% 3.62%Senegal 4.17% 4.17% 4.18% 4.44% 3.89% 4.23%Gambie 4.42% 5.59% 4.35% 5.33% 4.04% 4.90%Bénin 6.30% 6.49% 6.19% 6.56% 5.75% 6.35%Burkina 7.05% 7.55% 6.92% 7.20% 6.43% 7.74%Niger 7.59% 7.91% 7.46% 7.96% 8.27% 8.27%Serra Leone 7.96% 8.69% 7.82% 8.59% 7.04% 7.04%Mali 8.10% 9.13% 7.96% 8.75% 6.93% 8.57%Guinea Bissau 9.69% 10.19% 9.53% 10.02% 7.27% 7.61%Togo 7.91% 10.41% 7.96% 10.22% 8.27% 10.20%Liberia 14.83% 27.45% 14.57% 27.45% 13.54% 27.45%

CONCLUSIONCONCLUSION

Domestic electricity tariffs proposed in the ECOWAS region strongly vary across States and provide the community countries a genuine opportunity to develop a regional market for mutually beneficial energy exchanges;

Countries such as Guinea, Nigeria, Ghana and Côte d’Ivoire are genuine energy reservoirs for the subregion and will considerably benefit by interconnections in improving the profitability of investments;

Also, countries such as Benin, Burkina, Cape Verde, The Gambia, Guinea Bissau, Liberia, Mali, Senegal, Sierra Leone and Togo will offer lower tariffs to the consumers by getting cheaper supplies from reservoir countries;

Ensuring interconnections and developing community facilities building on the comparative advantages of countries are necessary for ECOWAS.

THANK YOU FOR THANK YOU FOR YOUR ATTENTIONYOUR ATTENTION