Access to electricity, renewable energies, gas and hydrogen. In this interview given to Afrik 21 on the occasion of African Climate Week, Oumar Tembely emphasizes the contribution of development banks to the electrification process in Africa. For the director of the Energy and Natural Resources department of the West African Development Bank (BOAD), African countries must also use gas as a transition energy.
[PARTNER INTERVIEW] Jean Marie Takouleu: As part of its Djoliba 2021-2025 Strategic Plan, BOAD will finance the deployment of an installed electrical capacity of 380 MW in the UEMOA (West African Economic and Monetary Union) zone, including 40% renewable energy. Two years after the launch of the plan, what mid-term assessment can you draw up?
Oumar Tembely : First of all, I would like to remind you that to promote the harmonious development of the States of the Union, BOAD, the UEMOA Development Institution, adopted a 2021-2025 Strategic Plan in September 2020. called the Djoliba plan, in reference to the majestic Niger River, so characteristic of our sub-region. The overall amount of commitments planned for the new Strategic Plan when it expires in 2025 is 3,293 billion CFA francs, or approximately 5,020 million euros.
The Djoliba Strategic Plan (2021-2025) aims for a change of scale, particularly in terms of activity levels, strengthening the action of BOAD, in favor of its member states and the UEMOA private sector, and improving the living conditions of the populations of the Union. BOAD's interventions are therefore focused on priority areas which are (i) transport and digitalization, (ii) energy and natural resources, (iii) agriculture and food security, (iv) education and health, real estate and housing, and (v) financial institutions and investments, thus targeting the majority of sustainable development goals (SDGs 1 to 13, and 15).
Concerning the specific area of energy, the ambition is indeed to install 380 MW of additional capacity, including around 40% renewable energy, in order to improve the electrification rate and energy supply in the region. Transversal impacts are expected in particular: (i) 244,000 jobs created including 16,700 in the entire economic fabric made up of SMEs/SMIs with particular attention to young people and women, (ii) a contribution of 3 710 billion CFA francs to the gross domestic product (GDP) of the States (i.e. an annual contribution estimated at 0.8% of the annual GDP of the UEMOA), (iii) 580 billion CFA francs to tax taxes and (iv) 18 million tonnes of CO 2 avoided via the funding provided.
Two (2) and a half years after its implementation, BOAD financed the installation of 205.9 MW of additional electrical energy production capacity with a share of renewable energy of 85.9 MW or 41.72 % of installed power, thus contributing to the objective of the Plan.
Almost a year ago, your institution launched the Program to Promote Private Investment in the Solar Energy Sector (PPIPS) with co-financing from the Green Climate Fund (GCF). What is the goal of this initiative? How will it contribute to electrification efforts in the UEMOA zone?
The Program targets the six (06) least developed countries in the UEMOA zone (Benin, Burkina Faso, Guinea Bissau, Mali, Niger and Togo) characterized by one of the lowest rates of access to modern energy services in the world , high cost of electricity, over-reliance on fossil fuels and the resulting energy security challenges. Based on Nationally Determined Contributions (NDCs) and National Energy Plans, the said countries plan to reach 1,192 MW of installed solar capacity by 2030.
Thus, the mobilization of the private sector on a large scale should allow the program to achieve this objective, in particular through the promotion of a “mixed financing” approach which consists of granting affordable long-term resources to private promoters of development projects. solar power plants. It will therefore make it possible to reduce, among other things, the financial risks of projects and to attract commercial and public banks to increase investments in solar power in West Africa.
As part of its implementation, the Program will also provide grants to strengthen the capacities of local project developers to structure investments, particularly in terms of project preparation and management. In addition, it will contribute to improving the regulatory framework, strengthening the capacities of public institutions in the energy sector. Finally, technical assistance will be provided to strengthen BOAD's capacity to integrate aspects related to climate change into the project cycle.
With a total cost of $133.5 million, the Program should help increase existing solar capacity to 215 MW and promote access to solar energy for 2.9 million people, with an impact estimated at 4.8 million tCO 2 equivalent avoided.
Faced with the climate emergency, diversification of the energy mix is becoming a major issue. What is BOAD doing to support UEMOA member countries in diversifying their energy mix?
As mentioned above, the 205.9 MW already financed by the Bank in favor of the countries of the Union and the private sector, are partly made up of sources of clean energy production, notably solar and hydroelectricity which occupy 41 .72% of investments. BOAD is also resolutely committed to the development of sub-regional integration through the financing of electricity interconnection projects between countries, in order to pool the different energy sources and secure the electricity supply of the sub-region. , while promoting the reduction of the cost per kilowatt hour to cover the energy needs of the populations and the economy of the Union.
Still in connection with climate issues, BOAD has identified as part of its CSR policy, a certain number of areas of intervention including area 5 which specifically aims to “Fight against climate change and develop renewable energies ” . The objective is to increase the share of financial resources dedicated to financing renewable energies. By 2025, nearly 18 million tonnes of CO 2 avoided are expected via the funding provided.
All these actions demonstrate the Bank's commitment to diversifying the energy mix with a view to contributing to the fight against climate change.
The gas issue is debated in West Africa and the rest of the world. Countries like Senegal and Mauritania have discovered natural gas deposits on their coasts. But we are seeing an outcry from certain civil society organizations against the exploitation of this fossil energy. However, Senegalese President Macky Sall, during the Summit for a new global financial pact held in June 2023, insisted on the need to consider gas as a transitional energy. What is BOAD’s position on the issue? Will the Bank continue to finance gas power plants?
In the distribution of the 380 MW of additional capacity targeted by 2025 by the Bank's Djoliba plan, a share of approximately 40% is planned for renewable energies. The remaining 60%, or 231.8 MW, will be made up of energy production installations from thermal sources including gas power plants. This demonstrates very clearly that BOAD is engaged in financing electricity production projects from gas.
It remains of course that all due diligence in terms of environmental and social safeguards will be carried out in order to avoid or mitigate possible impacts and promote its acceptance by local populations.
In order to accelerate the energy transition in heavy industries and possibly replace gas, the world is moving towards hydrogen. Mali is home to a deposit of natural hydrogen (or white hydrogen) at Bourakébougou, about 60 kilometers northwest of the capital Bamako. How do you support this country in the exploitation of this natural resource?
Concerning Mali's natural hydrogen, BOAD remains prepared to provide the necessary technical and financial assistance, with a view to its exploitation for the production of electricity, if the country and the private sector involved so request.
Discussions are already underway with the promoter and other stakeholders, in order to prepare the necessary documents for financing the feasibility studies of a pilot electrification project, using hydrogen and draw lessons regarding the possible use of this energy source to contribute to access to energy in the countries of the Union.
Is BOAD preparing a strategy for investments in the emerging hydrogen sector?
It should be noted that in line with the launch of the Djoliba plan and the establishment of the related organization chart, BOAD has started the development and/or updating of the strategies of the five (05) sectoral departments. The hydrogen sector, as a source of energy in the same way as natural gas for example, will be treated in the strategy of the natural resources sub-sector. As a source of clean energy, we are confident that hydrogen (green or natural) will occupy, in the years to come, an important place in the financing of the energy transition by BOAD.
Statements collected by Jean Marie Takouleu
