BURKINA FASO: Support the Power Mining Integration to extend Access to Electricity_ Phase II Innovative RE IPP Procurement Project

The electrification rate in Burkina Faso remains low by regional standards, at 19 percent overall with 66 percent in urban areas and just 3 percent in rural areas. The electricity supply is just enough to precariously meet the increasing annual demand which increases by 10 percent per year. The government’s strategy to increase supply while reducing the cost of service is to gradually shift the generation mix towards renewable energy and affordable electricity imports. The sector investment plan aims to reduce dependency on imported fuels and ramp up renewable energy sources, notably solar, to reach 25 percent of installed capacity by 2025 (including 170 MWp of solar photovoltaic (PV) plants).  

In 2018, the World Bank began working with the Ministry of Energy and the state-owned utility, SONABEL, on a technical, financial, and institutional innovative power sourcing arrangement to use mines as anchor customers to develop least-cost generation while supporting the government’s electrification targets and producing economies of scale to extend access to unserved populations. To support the Bank’s effort to leverage Burkina Faso's mining potential to develop sustainable and affordable power generation, PPIAF approved a first grant to help conduct an analysis to identify the best supply option to serve the mine electricity demand and the development of a viable and replicable PPP business case that would ensure reliability of least-cost supply without aggravating the country capacity deficit.  

Following the positive outcome of this analysis, a second PPIAF grant helped conduct the pre-feasibility study, which specified the technical design (solar PV 20MWp coupled with 15MW/30MWh battery storage) for mutually beneficial arrangements between the government, SONABEL, the IPP, and the Banfora mining company. Despite the COVID crises, the pre-feasibility study was completed on time in June 2020 through a virtual stakeholder workshop with all stakeholders, who agreed on the proposed PPP approach. Supported by the Global Infrastructure Facility (GIF), the transaction support is under implementation. 

The unique Solar PV plus storage project—which will be fully financed through $44 million in private investments—also marks the first of a complex institutional structuring used in the country. This activity will have a demonstrative effect and will be replicated in mining projects under development, both national and regional.