PPP Project: Notes of Senegal's PPP strategy for its rural electrification program

1. Notes on Senegal’s PPP
strategy for its rural
electrification program
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2. Rural Electrification
Rural electrification is a complicated issue
because:
• of user affordability
• rural inaccessibility
• low population densities and dispersed
households
• low project profitability, and
• over-dependence on subsidies and
increasing fiscal deficit.

3. Senegal and its infrastructure
gap
• 196.000 km2 (1/3 of France or ½
of Japan)
• 14 million population of which
57% live in a rural areas.
• GDP per capita is US$ 1,046.59
(2013), more than 60% of the
rural population lives under the
poverty line.
• Only 56% of the total population
- but significantly only 26% of the
rural population- has access to
electricity.

4. Agence Sénégalais
d’Electrification Rurale ASER
ASER was created as
centralized agency for RE and
developed a two pronged
strategy:
• PPER: Large Priority RE
program.
• ERIL: Small sized programs
based on local initiative.

5. Agence Sénégalais
d’Electrification Rurale ASER
PPER:
Only 6 concessions
were signed by 2012
and still 2 large
concessions are to
been assigned.

6. Agence Sénégalais
d’Electrification Rurale ASER
ERIL: Uncertainty in ERIL framework discourages
investment
Hence, the rural electrification issue is not

7. Requirements for the
success of a PPP program
The three basic requirements that make a
PPP work are:
• Economics
• Politics
• Execution.

8. Economics
Successful PPP programs require:
• sound fundamentals;
• a structure that optimizes cost, quality, and
service.
Although in theory the two concession models,
ensure profitability for operators, profitability
still has to be proven.

9. Economics: Fundamentals
By crossing
data from
Mobile use
and electricity
use D-4-D
provided data
for
assessment
of potential
demand and
thus the
financial
viability of

10. Economics: Fundamentals
Determination of zones and their financial viability

11. Politics
Successful PPP require:
• Securing political champions
• Building stakeholder support
• Environmental & social
impact
• Solid regulatory environment

12. Politics
Securing political champions, fully achieved in
Senegal, with the full support of top leaders.

13. Politics
• Building stakeholder
support, which has
proven difficult:
i. High political profile
of electrification
issues resulting in
lack of continuity
ii. Obstacles in
aligning objectives
between ASER &
SENELEC;

14. Politics
• Environmental & social
impact
i. cumbersome process to
assess of environmental and
social impacts
• Solid regulatory environment
i. Negotiations between
stakeholders accounting for
long delays

15. Execution
Successful PPP require:
• the right mix of local and global experts
• support a transparent, competitive bid
process and
• plan for ongoing contract monitoring and
review.

16. Conclusions
Senegal’s Rural Electrification program
has tackled many issues proactively but
has encountered difficulties to gain
momentum
• For private investors, the access to real
data will enable sound feasibility & viability
studies, and reactivate private investment in
both PPER & ERIL.
• Inherent conflict of ERIL projects stepping
into PPER areas under concession must be
addressed. Private investors need a clear

17. Thank you
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