Solar Energy and Access Project

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The country faces many challenges to achieve universal access to electricity services. The electrification rate in Burkina Faso has barely grown over the past five years and remains low by regional standards at about 25%, with significant disparities between urban and rural areas where around 75% of the population live. Electricity demand is growing steadily at 10% per year, attributed to the high rate of population growth, new connections, and low access base. Electricity supply is just enough to precariously meet the demand growth. The main challenges to address are: (i) cost-effective and timely expansion of available generation capacity towards cleaner and cheaper sources, in particular solar PV plants; (ii) construction of new and upgrading of existing transmission and distribution facilities; (iii) positioning the energy sector on a financially stable trajectory to ultimately reduce budget transfers to the sector; (iv) reinforce human resources capacity to adequately manage the increasing portfolio of infrastructure investment projects; and (v) accelerate the implementation of viable rural electrification initiatives to increase the access rate.Limited access to reliable and affordable electricity is one of the most binding constraints to economic growth and shared prosperity in Burkina Faso. Energy poverty entrenches fragility and represents a key challenge considering insecurity levels in the country. The GoBF’s strategy in the energy sector is to enable private sector participation to cost effectively diversify the energy generation mix towards solar and affordable imports and to focus public resources on the energy access expansion agenda. To foster competition, the new electricity law has established a competitive wholesale electricity market framework, providing direct access between generation companies and large consumers and third party-access to the network. Increasing imports through regional integration and valorizing low-cost solar potential through competitively procured Independent Power Producers (IPPs) would reduce the cost of electricity generation and allow to focus scarce public resources on increasing access to affordable, reliable, and modern electricity services. The proposed Project has three Components for a total public investment of US$ 168.75 million blending IDA national with climate financing grants and loan financing. ABER, the rural electrification agency, will be the implementing agency for Component 1: Sustainable Rural Electrification (US$ 75 million). SONABEL, the national electricity utility, will be the implementing agency for Component 2: Utility-Scale Solar with Storage and VRE Integration (US$ 88 million); and the Ministry of Energy will be the implementing agency for Component 3: Private Sector Mobilization for Large-Scale Solar (US$ 5.7 million). The project is expecting to mobilize a total of US$ 414 million of private capital in a phased manner for large scale solar power projects by IPPs. The financing plan of the Project includes US$ 75 million from IDA, US$ 93 million from CTF (including US$ 2 million grant), and US$ 0.7 million partial reimbursable grant from the Global Infrastructure Facility (GIF) that will be used for the transaction advisory services to support competitive IPP process.