Later this month, countries around the world will come together at the United Nations to agree to a set of 17 goals for sustainable development. The seventh goal in this list is to ensure access to affordable, reliable, sustainable and modern energy for all. Access to safe and reliable electricity is a key development priority and is imperative to achieving our goal of ending extreme poverty.
Over the last several years, both the Obama administration (through Power Africa) and Congress (through its pending legislation, the Electrify Africa Act) have been focusing on addressing energy poverty.
Just this week, the Millennium Challenge Corporation (MCC) signed a new compact with the government of Benin. This five-year, $375 million compact is a strategic investment in Benin’s power sector. The government of Benin will also provide an additional $28 million in support of the compact, demonstrating the priority this issue takes for the people of Benin.
The MCC model is a unique one: In order to be eligible for a compact, a country has to meet a rigorous set of criteria on a range of issues from good governance and rule of law, to economic freedom and investment in its citizens. MCC collects data and places transparency and accountability as a highest priority, publishing country score cards and information about the progress compacts have made.
The compact signed last week is the second compact for Benin; the first one was signed in 2006 and completed in the fall of 2011. The original compact focused on increasing investments and private sector activity in the country through projects that addressed specific economic and trade barriers. This second compact with a focus on the power sector is an important building block to continue the progress made under the first compact.
Earlier this year, ONE’s Senior Director of Government Relations, Matt Leffingwell, sat down with MCC’s Benin Country Director, Chris Broughton, to discuss electricity access and energy poverty in Benin:
Currently, only one third of the population of Benin has access to electricity, and those who do have access often are faced with unreliable sources of power. As a result, Benin’s average electricity consumption rate is only 110 kilowatt hours per person per year. This rate is lower than the average for low-income African countries, and is only 0.01% of the average for middle-income countries. To put that in perspective, a 60watt light bulb uses 110 kilowatt hours per year, and a TV, on average, uses 180 kilowatt hours per year. The average American uses approximately 13,250 kilowatt hours per year!
This new MCC compact aims to increase Benin’s domestic generation capacity, and will invest $136 million to increase generation by up to 78 megawatts, increasing the supply of electricity to the national grid. (More than half of the new generation capacity, a full 45 megawatts, will be solar-generated!) In addition to increasing generation capacity, the compact will provide:
- $110 million for distribution capabilities, building a national distribution control center, and modernizing the grid in select urban areas.
- $46 million for off-grid access: Benin is currently MCC’s largest off-grid electrification effort, covering critical public infrastructure, mini-grids, household devices and energy efficiency..
- $41 million for reform and institutions to strengthen the regulatory system, supporting utility operations and private sector participation.