Language: English
Original : French
P-Z1-FA0-214
AFRICAN DEVELOPMENT BANK GROUP
PROJECT APPRAISAL REPORT
MULTINATIONAL – DESERT TO POWER INITIATIVE – 225 KV
MAURITANIA-MALI POWER INTERCONNECTION AND RELATED SOLAR
POWER PLANTS DEVELOPMENT PROJECT
MULTINATIONAL: MAURITANIA AND MALI
TOTAL PROJECT COST: UA 667 380 000
Vice-President
Kevin Kanina KARIUKI, Vice-President, PEVP
Ext. 4012
Mohamed El AZIZI, Director-General, RDGN
Ext. 1414
Joseph M. RIBEIRO, Ag. Directeur-General, RDGW
Ext. 4033
Daniel SCHROTH, Director, PERN
Ext. 1564
Henry P. Batchi BALDEH, Director, PESD
Ext. 4036
Franklin K. GBEDEY, Division Manager, PERN.1
Ext. 4126
Adama MOUSSA, Division Manager, PESD.3
Ext. 7335
Ibrahima KONATE, Division Manager, PESD.2
Ext. 3418
Malinne BLOMBERG, Deputy Director-General, RDGN
Ext. 6730
Adalbert NSHIMYUMUREMYI, Country Manager, COML
Ext. 7201
Directors General
Sector Directors
Sector Managers
Country Managers
Project Team Leader Pierre DJAIGBE, Chief Renewable Energy Officer, PERN.1/COSN
Hamathe MANE, Principal Renewable Energy Specialist, PERN.1/COBF
Ext. 6597
Ext. 6113
Cheikh MOCTAR, Energy Specialist (Consultant), DtP, PERN.1
Moussa BARRI, Energy Specialist (Consultant), DtP, PERN.1
Al Hassane A. DIALLO, Energy Economist, PESD.3/COGN
Ext. 7407
Lassina Y. TRAORE, Financial Analyst (Consultant), PERN.1
Project Team
Fatma BEN ABDA, Principal Renewable Energy Officer, PERN.1
Ext. 3525
Youssouf KONE, Regional Integration Coordinator, RDGC.0
Ext. 5766
Rosine-Cathy IJIMBERE, Gender Specialist, AHGC.1
Ext. 4246
Clara BARROS, Gender Specialist (Consultant), AHGC.1
Ext. 4835
Saida BENCHOUK, Procurement Officer, SNFI.1
Ext. 7104
Cheikhani HAMED, Procurement Officer, SNFI.1/COML
Ext. 7228
N’deye M. THIOYE-DIALLO, Regional Financial Management Coordinator, SNFI.2
Ext. 6833
Biry DIAGANA, Fragility and Resilience Specialist (Consultant), RDTS
Ext. 4850
Linguère MBAYE, Principal Fragility and Resilience Officer, RTDS
Ext. 5591
Mohamed F. A. CHEIKH MOHAMED FADEL, Social Safeguards Specialist, SNSC
Ext. 1485
Abdoul G. BACHABI ALIDOU, Environmental Safeguards Specialist, SNSC
Diego F. DE VELASCO, Climate Change and Green Growth Specialist, PECG/RDGN
Ext. 1374
Luther T. YAMEOGO, Principal Civil Society Engagement Advocacy Officer, AHGC.2
Ext. 4650
Amine MOUAFFAK, Country Programme Officer, LIMR
Firmin BRI, Country Programme Officer, COML
Ext. 7202
Darline TOGNIA, Legal Counsel, PGCL
Ext. 4932
Mahécor NDIAYE, Principal Water and Sanitation Engineer, AHWS.3
Ext. 2695
Mame Soce SENE, Principal Evaluation, Quality and Results Officer, SNDR.3
Ext. 2779
Moussa KONE, Principal Electrical Engineer, PESD.1
Ext. 8256
Minkailou Halidou TOURE, Country Programme Officer, COGN
Ext. 7415
Sandrine ALISSOUTIN, Principal Operations Officer, SNMO.1
Ext. 3811
Eric PREGNON, Senior Energy Operations Officer, ESDP.3
Ext. 3391
Peer Reviewers
Public Disclosure Authorized
AFRICAN DEVELOPMENT FUND
Public Disclosure Authorized
MULTINATIONAL
DESERT TO POWER INITIATIVE – 225KV MAURITANIA-MALI POWER
INTERCONNECTION AND RELATED SOLAR POWER PLANTS
DEVELOPMENT PROJECT
November 2023
Translated Version
CURRENCY EQUIVALENTS
[Effective exchange rate: September 2023]
UA 1
UA 1
UA 1
UA 1
=
=
=
=
XOF 802.708
MRU 50.400
EUR 1.2237
USD 1.3299
FISCAL YEAR
1 January 2023 – 31 December 2023
WEIGHTS AND MEASURES
1 kilometre (km)
1 square kilometre (km²)
1 kilovolt (kV)
1 kilovolt-ampere (kVA)
1 kilowatt (kW)
1 megawatt (MW)
1 megawatt peak (MWp)
1 gigawatt (GW)
1 kilowatt-hour (kWh)
1 megawatt-hour (MWh)
1 gigawatt-hour (GWh)
1 tonne oil equivalent (toe)
1 million tonnes oil equivalent (mtoe)
=
=
=
=
=
=
=
=
=
=
=
=
=
1 000 metres (m)
1 000 000 square metres (m²)
1 000 volts (V)
1 000 volt-amperes (VA)
1 000 watts (W)
1 000 000 W = 1 000 kW
1 000 000 watt peak (Wp) = 1 000 kilowatt peak (kWp)
1 000 000 kW = 1 000 MW
1 000 watt-hours (Wh) = 3 600 000 joules (j)
1 000 000 Wh = 1 000 kWh
1 000 000 kWh = 1 000 MWh
41 868 joules = 11 630 kWh
1 000 000 toe
i
ACRONYMS AND ABBREVIATIONS
ADF
AFD
AfDB
AfIF-EU
AMU
BAP
BD
BOAD
CE
CIF
CREDD
DEME
DNE
ECOWAS
EDM-SA
EIB
ERR
ESIA
ESMF
ESMP
FIRR
GCF
GHG
GRM
HDI
HV
HVAC
HVB
IDA
IEC
IsDB
ISS
IUCN
JICA
KFAED
LV
MRU
NA-RISP
NPV
OMVG
OMVS
PNDES
PRSP
RAP
RBCSP
ROs
RPF
SCAPP
SDG
SEMAF-SA
SEP
SOGEM
SOMELEC
UA
UAM
WAPP
WA-RISP
XOF
African Development Fund
French Development Agency
African Development Bank
Africa Investment Facility-European Union
Arab Maghreb Union
Biodiversity Action Plan
Bidding Document
West African Development Bank
Consulting Engineer
Climate Investment Funds
Strategic Framework for Economic Recovery and Sustainable Development
Directorate of Electricity and Energy Management
National Directorate of Energy
Economic Community of West African States
Energie du Mali – Public Limited Company
European Investment Bank
Economic Rate of Return
Environmental and Social Impact Assessment
Environmental and Social Management Framework
Environmental and Social Management Plan
Financial Internal Rate of Return
Green Climate Fund
Greenhouse Gas
Grievance Redress Mechanism
Human Development Index
High Voltage
High Voltage Alternating Current (voltage ranging between 1 000 volts and 50 000 volts of alternating current)
High Voltage B (voltage above 50 000 volts of alternating current)
International Development Association
Information, Education and Communication
Islamic Development Bank
Integrated Safeguards System
International Union for Conservation of Nature
Japanese International Cooperation Agency
Kuwait Fund for Arab Economic Development
Low Voltage
Mauritanian Ouguiya
North Africa Regional Integration Strategy Paper
Net Present Value
Gambia River Basin Development Organisation
Senegal River Basin Development Organisation
National Economic and Social Development Plan
Poverty Reduction Strategy Paper
Resettlement Action Plan
Results-Based Country Strategy Paper
Strategic and Operational Framework for Regional Operations
Resettlement Policy Framework
Accelerated Growth and Shared Prosperity Strategy
Sustainable Development Goal
Manantali and Félou Management Company
Stakeholder Engagement Plan
Manantali Energy Management Company
Mauritanian Electricity Company
Unit of Account
Million Units of Account
West African Power Pool
West Africa Regional Integration Strategy Paper
African Financial Community Franc (WAEMU)
ii
PROJECT INFORMATION SHEET
CLIENT INFORMATION SHEET
Project Name
Multinational – Desert to Power Initiative – 225 kV Mauritania-Mali Power
Interconnection and Related Solar Power Plants Development Project
(PIEMM)
Sector(s)
ENERGY
Borrowers
MAURITANIA AND MALI
Project Instrument(s)
ADF Loans, GCF Grants and CIF Grant
Project Implementing Agencies
Mauritanian Electricity Company (SOMELEC)
Energie du Mali (EDM SA)
Manantali Energy Management Company (SOGEM)
COUNTRY AND STRATEGIC CONTEXT
Country Strategy Paper Period
The project concerns two countries: Mauritania and Mali.
1. The Country Strategy Paper (CSP) for Mauritania covers the 2023-2028 period.
2. The CSP for Mali covers the 2021-2025 period.
3. At the regional level, the North Africa Regional Integration Strategy Paper (NARISP) covers the 2020-2026 period and the West Africa Regional Integration
Strategy Paper (WA-RISP) over the 2020-2025 period.
Country Strategy Paper and 1. The Government of Mauritania and the Bank agreed that operations under the
Regional Integration Strategy
CSP 2023-2028 should be aligned on the Action Plan 2021-2025 of the
Paper Priority Areas Supported by
Accelerated Growth and Shared Prosperity Strategy (SCAPP). Therefore, the
the Project
main objective of the CSP 2023-2028 is to support the diversification and
transformation of the economy to generate decent jobs. The two priority areas
selected are: (i) Develop agricultural value chains to accelerate economic
diversification and the creation of decent jobs; and (ii) Strengthen infrastructure
and economic and financial governance to support the development of productive
sectors. The PIEMM plugs into the second priority area which aims, among other
things, to achieve electrical grid interconnection between Mauritania and
neighbouring countries and to increase investment in renewable energy sources
to promote sustainable development in rural areas and reduce greenhouse gas
(GHG) emissions.
2. The main objective of the CSP 2021-2025 for Mali is to address the challenges
of economic fragility, with a single priority area for Bank support: “reduce
economic fragility through improved agricultural value chains”. The crosscutting themes of the strategy focus on (i) Improving governance and fighting
corruption; (ii) Private sector development, gender, women, youths and civil
society; and (iii) Climate change. Electricity is a cross-cutting factor of
production and essential for the development of all economic activities, including
those of the private sector. By improving access to quality electricity supply in
Mali, the PIEMM will contribute to developing the private sector and improving
the living conditions of the population, including young people and women.
3. Pillar 1 of the NA-RISP 2020-2026 aims at “integrating North Africa through the
promotion of regional infrastructure connectivity. Under this pillar, the Bank’s
operations will seek to enhance integration in North Africa by (i) supporting the
connectivity of regional “hard” infrastructure; and (ii) promoting regional "soft"
infrastructure. For its part, the West Africa Regional Integration Strategy Paper
(WA-RISP) 2020-2025 has two priority areas. The first priority area aims at
“enhancing resilient cross-border infrastructure”. The project is perfectly in line
with Pillar 1 of the NA-RISP 2020-2026 and the first priority area of the WARISP 2020-2025. It is also consistent with the objective of the NA-RISP which
iii
is to strengthen cooperation between North and West Africa under the crosscutting pillar.
Government Agenda (PRSP, NDP Mauritania: the Accelerated Growth and Shared Prosperity Strategy (SCAPP –
or its equivalent)
2016-2030), divided into 3 five-year priority action plans, including the current one
covering the 2021-2025 period.
Mali: the Strategic Framework for Economic Recovery and Sustainable
Development – CREDD (2019-2023)
Region: African Union’s Agenda 2063
Project Classification
Top Priority 1: Light up and power Africa
Top Priority 4: Integrate Africa
Top Priority 5: Improve the quality of life for the people of Africa
SDG 7: Ensure access to affordable, reliable, sustainable and modern energy for all.
SDG 9: Build resilient infrastructure, promote inclusive and sustainable
industrialisation and foster innovation.
SDG 13: Take urgent action to combat climate change and its impacts.
SDG 5: Achieve gender equality and empower all women and girls.
SDG 1: End poverty in all its forms everywhere.
The project is integrative at the regional level and transformative at the national level,
as it will increase access to electricity, stimulate economic development, enable
regional electricity trade and increase the share of renewable energy in the energy
mix of both countries.
Country
Performance
Institutional Assessment
and Mauritania: The CPIA score was 3.4 in 2021.
Mali: The CPIA score was 3.746 in 2021.
Risky Projects in the Country Mauritania: 36% of operations were flagged as of 30/9/2023.
Portfolio
Mali: 56% of operations were flagged as of 30/9/2023.
Eligible allocation balance at the Mauritania: UA 27 million
time of PCN
Mali: UA 73.65 million
PROJECT CLASSIFICATION
Classification of
and Social Risks
Environmental CATEGORY 1 confirmed on 27 January 2023
Does
the
project
involuntary resettlement?
involve YES, a resettlement action plan (RAP) was prepared for the Malian component and
two RAPs for the Mauritanian component. These RAPs were published by both
countries and posted on the Bank’s website on 14 August 2023.
Classification of Climate Protection CATEGORY 2
Measures
Fragility and Resilience Assessment Yes, for Mali.
Yes, for Mauritania.
Classification according to the GEN 2
Gender Marker System
ADF KEY FINANCING INFORMATION
Mauritania
Mali
Interest Rate
1%
-
Service Charge
1%
1%
0.75%
0.75%
Commitment Fee
iv
Grace Period
5 years
10 years
Tenor
30 years
50 years
Amounts (in UA million)
Sources of Financing
Financing
Instrument
Mauritania
Mali
Total
African Development Fund (ADF) - PBA
2.7
10.0
12.7
Loan
African Development Fund (ADF) - RO
200.0
15.0
215.0
Loan
TOTAL ADF (PBA + RO)
202.7
25
227.7
-
7.52
7.52
Grant
1.13
1.13
2.26
Grant
-
37.37
37.37
Loan
Climate Investment Funds (CIF)
Green Climate Fund (GCF)
West African Development Bank (BOAD)
Loan
French Development Agency (AFD)
49.03
49.03
Loan
European Investment Bank (EIB) / European Union (EU)
99.70
99.70
Loan/Grant
Other Donors
229.28
229.28
Loan/Grant
5.5
5.5
State Budget
9.03
Own funds
Counterpart
Mauritania
Contribution
of
the
Government
of
SOGEM’s contribution
9.03
TOTAL PROJECT COST
667. 38
PROJECT DEVELOPMENT GOAL AND COMPONENTS
Project Development Goal
Stimulate the increase of solar power generation capacity and universal access
to electricity in Mauritania and Mali through the development of electrical
power grids.
Project Components
Component 1: CONSTRUCTION OF ELECTRICAL INFRASTRUCTURE
[UA 614 260 000]
Component 2: INSTITUTIONAL SUPPORT [UA 16 790 000]
Component 3: PROJECT MANAGEMENT [UA 36 330 000]
PROJECT IMPLEMENTATION SCHEDULE SUBJECT TO APPROVAL BY THE BOARD OF DIRECTORS
Project Concept Note (PCN) Approval Date: 8 June 2023
Appraisal Mission
11 to 28 July 2023 and 26 September to 4 October 2023
Projected Date of Board Presentation
Date: 15 December 2023
Effectiveness Date
Date: 31/1/2024
Project Duration
2024 –2030
Projected
Timeframe
Mid-term
Project Closing Date
Review June 2027
Date: 30 June 2031
v
TABLE OF CONTENTS
STRATEGIC CONTEXT ............................................................................................................................... 1
1
A.
B.
C.
D.
COUNTRY CONTEXT, STRATEGY AND OBJECTIVES ................................................................................................. 1
SECTOR AND INSTITUTIONAL CONTEXT ................................................................................................................... 2
RATIONALE FOR BANK INVOLVEMENT..................................................................................................................... 3
DEVELOPMENT PARTNER COORDINATION............................................................................................................... 4
PROJECT DESCRIPTION........................................................................................................................... 4
2
A.
B.
C.
D.
E.
F.
PROJECT DEVELOPMENT GOAL ............................................................................................................................... 4
THEORY OF CHANGE ................................................................................................................................................. 4
PROJECT COMPONENTS ............................................................................................................................................ 5
PROJECT COST AND FINANCING ARRANGEMENTS .................................................................................................. 6
PROJECT TARGET AREA BENEFICIARIES AND POPULATION AND OTHER STAKEHOLDERS ................................... 8
BANK GROUP EXPERIENCE AND LESSONS REFLECTED IN PROJECT DESIGN ......................................................... 9
PROJECT FEASIBILITY .............................................................................................................................. 9
3
A.
B.
C.
FINANCIAL AND ECONOMIC ANALYSIS ..................................................................................................................... 9
ENVIRONMENTAL AND SOCIAL SAFEGUARDS ........................................................................................................ 10
OTHER CROSS-CUTTING PRIORITIES...................................................................................................................... 13
PROJECT IMPLEMENTATION ................................................................................................................. 14
4
A.
B.
C.
D.
E.
F.
G.
H.
INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS .................................................................................... 14
PROCUREMENT ........................................................................................................................................................ 15
FINANCIAL MANAGEMENT, DISBURSEMENT AND AUDITING ................................................................................. 16
MONITORING AND EVALUATION............................................................................................................................. 17
GOVERNANCE .......................................................................................................................................................... 17
SUSTAINABILITY ...................................................................................................................................................... 18
RISK MANAGEMENT ................................................................................................................................................ 18
KNOWLEDGE BUILDING .......................................................................................................................................... 19
LEGAL INSTRUMENTS AND AUTHORITY .......................................................................................... 19
5
A.
B.
C.
LEGAL INSTRUMENTS .............................................................................................................................................. 19
CONDITIONS FOR BANK INTERVENTION ................................................................................................................. 19
COMPLIANCE WITH BANK POLICIES ...................................................................................................................... 22
6
RECOMMENDATION ................................................................................................................................ 23
7
RESULTS FRAMEWORK .......................................................................................................................... 24
8
ENVIRONMENTAL AND SOCIAL COMPLIANCE NOTE (ESCON) ................................................... 25
9
CONTENT OF TECHNICAL ANNEXES (APPENDED TO THE PAR) .................................................. 26
MAP OF THE PROJECT AREA ............................................................................................................................................ 27
vi
1
STRATEGIC CONTEXT
A.
Country Context, Strategy and Objectives
1. The electricity sub-sectors in Mauritania and Mali face significant challenges, including (i) a low
electricity access rate; (ii) an electricity supply-demand gap; and (iii) a marked predominance of fossil
fuel-based power generation in the energy mix. To overcome these constraints on a critical subsector for
economic and social development, both countries have adopted strategies to provide their people with
universal access to electricity by 2030. The objectives of the 225 kV Mauritania-Mali Power
Interconnection and Related Solar Power Plants Development Project (PIEMM) are perfectly in line
with the visions of the two countries’ governments.
2. Mauritania’s Accelerated Growth and Shared Prosperity Strategy (SCAPP 2016-2030) focuses on three
main thrusts, namely: (i) promoting strong, sustainable and inclusive growth; (ii) developing human
capital and access to basic social services; and (iii) enhancing governance in all its dimensions. It is
divided into 3 five-year priority action plans. The second action plan covering the 2021-2025 period
comprises 189 transformative projects, including the 225 kV Mauritania-Mali Power Interconnection
and Related Solar Power Plants Development Project (PIEMM). Therefore, PIEMM is squarely in line
with SCAPP and plugs into the second thrust of the Bank’s Country Strategy Paper (CSP 2023-2028)
for the country which is consistent with the “Water-Agriculture-Energy” nexus.
3. In Mali, the Strategic Framework for Economic Recovery and Sustainable Development (CREDD
2019-2023) is based on five strategic thrusts, namely: (i) Consolidation of democracy and improvement
of governance; (ii) Restoration of peace, security and strengthening of co-existence; (iii) Inclusive
economic growth and structural transformation (enhance the efficiency of production support sectors,
including energy); (iv) Environmental protection and enhancement of resilience to climate change; and
(v) Human capital development. By improving access to electricity through increased clean energy
generation, PIEMM is fully consistent with CREDD’s last three thrusts and is in line with the single
priority area of the Bank’s CSP 2021-2025 which seeks to "reduce economic fragility through improved
agricultural value chains” and to strengthen the private sector.
4. At the regional level, the project is in line with three of the African Union’s Agenda 2063 goals, namely
to: (i) improve the quality of life for the people (Goal 1); (ii) make communities more resilient to climate
change (Goal 7); and (iii) build world-class infrastructure across the continent (Goal 10). This last goal
specifically targets energy projects (including this project) which are part of the second phase of the
Programme for Infrastructure Development in Africa (PIDA-PAP2 2021-2030), including the New
Partnership for Africa’s Development (NEPAD). This project will also contribute to achieving SDGs 7,
9 and 131. It is also aligned with the strategic thrust area of AMU2 focusing on energy security, as well
as Pillar 3 of the ECOWAS Vision 2050 which aims to establish an interconnected and energy-efficient
network.
5. PIEMM covers two of the Bank’s intervention regions: North Africa and West Africa. It is consistent
with Pillar I of the Bank’s North Africa Regional Integration Strategy Paper (NA-RISP 2020-2026)
aimed at “integrating North Africa through the promotion of regional connectivity infrastructure” and
with Priority Area 1 of the Bank’s West Africa Regional Integration Strategy Paper (WA-RISP 20202025) aimed at “enhancing resilient cross-border infrastructure”. It is also aligned with the Bank’s
Regional Integration Strategic Framework (RISF 2018-2025).
Sustainable Development Goals (SDGs) 7 “ensure access to affordable, reliable, sustainable and modern energy for all”, 9 “Build resilient infrastructure,
promote inclusive and sustainable industrialisation and foster innovation” and 13 “Take urgent action to combat climate change and its impacts”.
2
The Arab Maghreb Union was founded in February 1989. It comprises five countries: Morocco, Mauritania, Algeria, Tunisia and Libya.
1
1
6. PIEMM, which is part of the Desert to Power Initiative, is also in line with: (a) the Bank’s Energy
Sector Policy and plugs into 3 of its top 5 priorities (High 5s) which aim respectively to: (i) light up and
power Africa; (ii) integrate Africa; and (iii) improve the quality of life for the people of Africa; (b) the
Bank Group’s Strategy for the New Deal on Energy for Africa (2016-2025) aimed at achieving universal
access to energy; (c) Pillar 3 of the African Development Bank Group Gender Strategy 2021–2025 aimed
at “increasing women’s access to social services through infrastructure”; (d) Pillar 2 of the Climate
Change and Green Growth Strategic Framework (2021-2030) which aims to “promote energy efficiency
and the transition to renewable and clean energy”; (e) the Bank’s Strategy for Addressing Fragility and
Building Resilience in Africa (2022-2026) through institutional and human capacity building activities
(Priority 1); the project’s contribution to building resilient societies (Priority 2) and increasing access to
energy to act as a catalyst for private sector investment (Priority 3); and (f) the Jobs for Youth in Africa
Strategy (2016-2025) by financing internships for young graduates.
B.
Sector and Institutional Context
7. Despite the efforts made by both countries over the last decade, electricity access rates 3 remain
relatively low4 (48% in Mauritania and 53% in Mali, compared to an African average of 57% in 2021),
with wide disparities between urban and rural areas (rates below 25% in rural areas). In 2021, the total
generation capacity available was 512 MW in Mauritania (SOMELEC) and 780.7 MW in Mali (EDM
SA). These national generation capacities remain relatively low and are dominated by thermal (fuel)
generation which accounts for 71% and 79% of total capacity in Mauritania and Mali, respectively. It is
difficult for national power utility companies to achieve financial equilibrium with such an energy mix
structure, especially in a context of administered prices where their activities are generally affected by
rising global fossil fuel prices. These companies’ financial situations have been impacted in recent years
by highly volatile fuel prices, due primarily to the COVID-19 pandemic and recent global conflicts.
Furthermore, the lack of a power transmission line with sufficient capacity prevents Mauritania from
using its full share of the power generation capacity (94.2 MW) from the 400 MW generated by the three
OMVS hydropower plants (Manantali, Gouina and Félou)5. It is also worth noting that less than 50% of
the capacity of the 100 MW wind power plant built at Boulanouar is being used, whereas it could have
been connected to a power transmission network to serve localities within Mauritania which do not have
access to electricity.
8. To improve subsector performance and make the country a regional renewable energy hub, the
Government of Mauritania has adopted a very ambitious power generation plan and initiated institutional
reforms. These include (i) the adoption of a new
…… PIEMM is perfectly in keeping with the Bank’s recent
Electricity Code which provides for private
operations in Mauritania and Mali
sector participation in power generation; (ii) the
PIEMM is in line with the Green Mini Grid Electrification Project
drafting of a new energy policy document,
(RIMDIR) which covers isolated localities far from the substations
including a Letter of Energy Sector
of the 225 kV line and which will not be connected to the
Development Policy and Action Plan; (iii) the
distribution networks to be built under PIEMM. In addition, the
Project to Support Public Enterprise Governance and Debt
design of a new energy strategy to include new
Management (PGEPGD), of which SOMELEC is a beneficiary,
forms of energy; and (iv) the restructuring of
will help to improve its internal governance and technical and
SOMELEC into three entities (responsible for
financial capacity. In Mali, PIEMM will enhance the impact of the
Bamako Loop Solar Power Plant Project which is being appraised
generation and transmission, distribution and
by the Bank and will help to connect major solar power plants in
marketing, and rural electrification). All of
the locality.
these ongoing reforms are expected to be
completed in 2024. With its considerable
renewable energy (wind and solar) generation potential estimated at more than 500 GW and its
geographical location, Mauritania aims not only to achieve universal access by 2030, but also to become
3
The electricity access rate is the ratio of the number of households living in electrified localities to the total number of households in the country.
Data culled from the progress reports of the National Directorate of Energy and the OMVS.
5
The 400 MW generated by the 3 power plants of the OMVS are divided between Mali (170.6 MW), Mauritania (94.2 MW) and Senegal (135.2 MW).
4
2
a new sub-regional energy hub by supplying electricity to the countries of the sub-region, and to position
itself as a pioneer in the production of green hydrogen. The power transmission network to be built by
PIEMM will be instrumental in achieving this goal.
9. In Mali, the review of the legal and regulatory instruments governing the electricity sub-sector was
launched in 2018 under the Bank-financed Project for Scaling-up Renewable Energy in Mali
(PAPERM). The socio-political situation in the country has delayed the implementation of the
instruments. The adoption of the proposed new instruments is underway and should be finalized by end2024. In addition, the recovery plan aimed at gradually reducing the need for subsidies in the electricity
sub-sector was adopted and implemented in 2019 to reduce the cost of electricity generation by about
50% by 2025 while improving EDM-SA’s performance. A national programme to increase electricity
access in Mali and a related investment plan to achieve universal access by 2030 are being developed.
10. PIEMM will strengthen the interconnection of the power grids of OMVS member countries with
those of the other member countries of the West African Power Pool (WAPP6) for a wider common
energy market. PIEMM perfectly aligns with the region’s interconnection projects under implementation
which are all co-financed by the Bank and other development partners, namely: (i) the 225 kV GuineaMali Electricity Interconnection Project; (ii) the 225 kV OMVG Gambia–Guinea Bissau–Guinea–
Senegal Grid Interconnection Project; and (iii) the 225 kV Côte d’Ivoire-Liberia-Sierra Leone-Guinea
(CLSG) Interconnection Project.
C.
Rationale for Bank Involvement
11. The main reason for the Bank’s involvement in PIEMM financing is that its operation will provide
access to high-quality, affordable and low-carbon electricity to the people of its two regional member
countries. Besides its alignment with the aforementioned Bank policies and strategies, the project is a
priority operation under the Desert to Power (DtP) Initiative which is part of the national roadmaps
approved by the two countries and the Bank in 2020 for the operationalization of the said initiative. The
project will help to develop regional electricity trade in the Sahel. It is perfectly in line with the main
objective of the DtP Initiative of reducing the region’s energy vulnerability by adding at least 10 GW of
solar energy by 2030 to provide electricity to 250 million people in the 11 countries covered by the
initiative.
12. Therefore, the 225 kV power transmission line to be built will be a key link in the regional power
transmission network, also known as the “Trans-Sahelian Backbone” (which is part of the Regional
Sahel Desert to Power Roadmap approved in 2021). Feasibility studies for this project are being carried
out under WAPP. The aim is to connect Chad, a landlocked country, to Mauritania via three other
landlocked countries: Burkina Faso, Niger and Mali. The 225 kV line will also enable the development
of new renewable energy generation plants whose output will be more easily integrated into the subregion’s interconnected grid. The 225 kV transmission line will include optical ground wires that will
be used not only for remote control of electricity network equipment but also for regional
telecommunications development.
13. The operation of the 600 MW high-voltage transmission line will allow Mali to import about 600
GWh of electricity from renewable energy sources from Mauritania each year at a competitive cost
compared to the current high cost of EUR 0.23/kWh, reduce its electricity deficit (estimated at 250 MW
in July 2023) for at least the first five years of operation, improve subsector performance, and
subsequently increase the national electricity access rate. The project will allow Mauritania, among other
things, to increase its national electricity access rate and to improve the performance of the sub-sector
by generating revenue from electricity exports and reducing fuel consumption by shutting down several
generators with very high operating costs (thereby reducing greenhouse gas emissions). In the long run,
6
WAPP: West African Power Pool.
3
the country with a generation capacity which enables it to export to the other country will engage in
energy trade.
14. Lastly, in addition to ADF resources, the Bank’s operation will help to mobilise a Climate Investment
Fund (CIF) grant for Mali to finance the transmission network, a Green Climate Fund (GCF) grant for
both countries to undertake feasibility studies for the development of solar power plants by independent
private producers (IPPs7), and substantial financing from other donors for the project.
D.
Development Partner Coordination
15. PIEMM was presented to the majority of the technical and financial partners (TFPs) involved in the
financing of the electricity subsector in Mauritania and Mali during a round table held in Nouakchott,
Mauritania, in July 2023. Given the project’s regional nature and importance for the electrical
connectivity of the countries of the sub-region, TFPs have expressed strong interest and willingness to
provide financial support. These include the World Bank, the European Union (EU), the European
Investment Bank (EIB), the French Development Agency (AFD), the Japan International Cooperation
Agency (JICA), the West African Development Bank (BOAD), the Islamic Development Bank (IsDB)
and Climate Investment Funds.
16. In addition to the TFP energy thematic groups operating in both countries, of which the Bank is an
active member, a project-specific periodic consultation framework has been established. It brings
together potential donors and representatives from both countries and the OMVS. This framework has
helped to facilitate the harmonisation of TFP views on project structuring, the review of feasibility
studies and environmental and social safeguard assessment reports, as well as project appraisal schedules
for the conduct of joint project appraisal and implementation supervision missions. The Bank is
spearheading this operation and has chaired periodic meetings.
2
PROJECT DESCRIPTION
A.
Project Development Goal
17. The project’s development goal is to increase solar energy production capacity and provide universal
electricity access in Mauritania and Mali by building electricity grids. The specific objectives are to: (i)
build a 1 373-kilometre high voltage (225 kV) electrical connection between the two countries with a
transit capacity of 600 MW; (ii) build and connect a 50 MWp solar power plant in Kiffa (Mauritania) to
the 225 kV interconnection line; (iii) connect 100 000 new households (80 000 of them in Mauritania
and 20 000 in Mali) to the electricity network using smart prepayment meters in the localities crossed
by the 225 kV line in the two countries; (iv) create entrepreneurial opportunities for young people and
women in the agricultural and services sectors; (v) contribute to developing regional electricity trade;
and (vi) prepare feasibility studies for the construction of the Nama solar power plant in Mauritania and
the Yélimané solar power plant in Mali, with a combined capacity of at least 100 MWp.
18. The constant availability of quality electricity at an affordable cost will strengthen the resilience of
people in the beneficiary localities. Electricity can help to make growth more inclusive in countries like
Mauritania and Mali, where there are still multiple fragility factors such as criminal violence, poverty,
and the exclusion of some groups. PIEMM will make it possible to provide rural households with
electricity access, thereby facilitating their access to education and health services and improving their
living conditions through the creation of income-generating activities. Measures have been taken to
adequately mitigate the project’s negative environmental and social impacts.
B.
Theory of Change
19. The electricity sub-sectors in Mauritania and Mali have weaknesses such as: (i) low access rates; (ii)
the predominance of thermal generation (fuel); (iii) poor technical and financial performance of national
power utility companies; and (iv) very high electricity generation costs. PIEMM seeks to address these
7
IPP: independent power producers.
4
shortcomings by constructing a large electricity transmission network between the two countries which
will promote the development and use of renewable energy (particularly solar and wind power) and
strengthen integration between the two countries and those of the sub-region by contributing to the
development of the regional electricity market. A large electricity distribution network will also be built
in the localities crossed by the transmission line to connect thousands of households that will have access
to electricity for the first time.
20. The achievement of the expected project outcomes is based on the following assumptions: (a) the
contracted construction companies are technically efficient and financially viable; (b) there is additional
capacity to generate electricity from renewable sources; (c) an institutional, legal and regulatory
framework conducive to electricity trading is established; and (d) households (including those headed
by women) have the financial resources to sustainably connect to the grid in each of the two countries.
A theory of change diagram is presented in Annex 2-1.
C.
Project Components
21. PIEMM will comprise three components: (A) Construction of Electrical Infrastructure; (B)
Institutional Support; and (C) Project Management. It will be implemented over seven (7) years, from
January 2024 to December 2030. The table below presents a description of project activities and the
estimated cost of each component.
No.
A
Components
Construction of
Electrical
Infrastructure
Table 1: Project Components (amounts in UA million)
Estimated Cost
Component Description
614.26
1.
Construction of the electricity transmission (interconnection) network
▪
Construction of 1 373 kilometres of 225 kV double circuit transmission
network between the two countries (184 kilometres in Mali and 1 189
kilometres in Mauritania);
▪
Construction of 8 HV/MV transformer substations (including 1 in Mali) and
extension of 2 HV/MV substations (including 1 in Mali).
2.
Construction of the Kiffa solar power plant in Mauritania
▪ Construction of a 50 MWp solar power plant with a storage capacity of 35
MW/70 MWh.
3.
B
Institutional
Support
16.79
Extension of distribution networks and connection of households (access to
electricity)
▪
Electrification of 200 localities (150 in Mauritania and 50 in Mali) along
the 225 kV transmission line, including street lighting;
▪
Installation of 100 000 smart prepayment metre connections in the
localities crossed by the transmission line.
1. Sector policy and reform support
▪ Building the capacity of the Mauritanian Electricity Subsector Regulatory
Authority.
2.
▪
▪
▪
▪
▪
3.
▪
▪
4.
▪
▪
Building the capacity of electricity sub-sector actors
Preparation of national energy efficiency action plans;
Drafting of a grid code in Mauritania;
Training of the staff of the Directorate of Electricity and Energy Management
(DEME) and SOMELEC and organisation of trips to neighbouring countries to
share experiences in energy efficiency;
Provision of logistical support to the EDM SA and the National Directorate of
Energy (DNE) in Mali, and to SOMELEC and SOGEM in Mauritania;
Organisation of various training courses for subsector actors in the two countries.
Provision of technical assistance to energy subsectors to prepare for the
development of IPP plants
Recruitment of a business adviser for the development of solar plants by IPPs;
Conduct of feasibility studies and an ESIA for two solar power plants, one in
Néma (Mauritania) and the other in Yélimané (Mali) to be developed by IPPs.
Support for local development and empowerment of women’s and youth groups
Provision of logistical support to women’s organisations operating in the project
area in each country (construction of 7 cold stores, purchase of 98 mills, setting
up of 2 multipurpose platforms, organisation of various training courses, etc.);
Construction of 36 boreholes equipped with solar pumps to supply drinking water
to households and agricultural and pastoral activities in the 26 localities crossed
by the transmission line;
5
No.
Components
Table 1: Project Components (amounts in UA million)
Estimated Cost
Component Description
▪ Recruitment and mentoring of 100 young graduates (60 in Mauritania and 40 in
Mali) during internships.
5.
▪
▪
▪
▪
Conduct of project feasibility studies
Conduct of a feasibility study and an ESIA for the development of 250 green minigrids;
Conduct of the final design study and preparation of bidding documents for the
Kiffa solar power plant.
Environmental and Social Management Plan (ESMP) and Resettlement Action
Plan (RAP) implementation
Compensation of PAPs;
Compensatory reforestation;
Local development support (PADL);
Protection of bird life and safeguarding the RAMSAR site (Lake Magui);
Monitoring of the implementation of ESMPs and RAPs (training of stakeholders,
monitoring of E&S activities, evaluation, etc.);
Implementation of the Livelihood Restoration Programme (PRME);
Implementation and monitoring of the Grievance Redress Mechanism (GRM);
Audit of RAP implementation.
2.
▪
▪
▪
▪
▪
▪
▪
Project operational management
Works supervision and control;
Functioning of PMUs and the Supranational Steering Committee;
Procurement of IT equipment, vehicles and office furniture for PMUs;
Project financial, procurement and environmental and social compliance audits;
Climate compliance audit (including ex-post calculation of net GHS emissions);
Social communication and community ownership;
Organisation of various training courses for PMU staff.
▪
C
Project
Management
36.33
1.
▪
▪
▪
▪
▪
Total Project Cost
667.38
22. The detailed project cost is presented in Technical Annex 2.2.
D.
Project Cost and Financing Arrangements
23. The total project cost, net of taxes and customs duties, is estimated at UA 667.38 million. This cost
includes a 5% provision for physical and technical contingencies, as well as a 5% provision for price
escalation.
24. The detailed project cost by component, source of financing and expenditure category is presented
in the tables below. The exchange rates used are those indicated on page (ii) of the document.
Table 2: Estimated Project Cost by Component
Components
Construction of Electrical Infrastructure
Institutional Support
Project Management
Base Cost
Provision for Physical Contingencies
Provision for Price Escalation
Total Project Cost
Amounts in UA million
Foreign Exchange
Local Currency
502.58
55.84
10.68
4.58
18.85
14.18
532.11
74.61
26.61
3.73
26.61
3.73
585.32
82.07
Total
558.42
15.26
33.03
606.71
30.34
30.34
667.38
% of Total
Project Cost
83.67%
2.29%
4.95%
90.91%
4.55%
4.55%
100.00%
25. The project cost, net of taxes and customs duties, will be financed by ADF loans granted to Mauritania
and Mali totalling UA 227.7 million (UA 215 million from the regional envelope, that is UA 200 million
for Mauritania and UA 15 million for Mali, and UA 2.7 million and UA 10 million from the
Performance-Based Allocation - PBA - for Mauritania and Mali, respectively). The ADF is the main
project financier. The Bank has mobilised a USD 3 million grant from the Desert to Power G5 Sahel
Financing Facility through the Green Climate Fund (GCF) to finance feasibility studies for two solar
power plants (one per country) to be developed by independent private producers (IPPs). It has also
mobilised USD 10 million from the Climate Investment Fund (CIF) for Mali to finance part of the
transmission network. The ADF and the CIF will co-finance some infrastructure in Mali. The remaining
6
ADF resources will be financed in parallel with the other TFPs for the three project components. The
terms and conditions of ADF financing are presented in the Project Information Sheet on page (v).
26. The table below presents the Project Financing Plan.
7
Table 3: Project Sources of Financing
Amounts in UA million
Foreign Exchange
Local Currency
195.95
31.75
6.77
0.75
1.58
0.68
33.64
3.74
44.13
4.90
89.73
9.97
204.58
24.70
4.95
0.55
4.00
5.03
585.32
82.07
Sources of Financing
ADF
CIF
GCF
BOAD
AFD
EIB/EU
Other Donors
Government of Mauritania
SOGEM
Total Project Cost
Total
227.70
7.52
2.26
37.37
49.03
99.70
29.28
5.50
9.03
667.38
% of Total
Project Cost
34.1%
1.1%
0.3%
5.6%
7.3%
14.9%
34.4%
0.8%
1.4%
100%
27. The ADF financing will have a significant leverage effect through the mobilisation of substantial
financing for the project from other technical and financial partners. The other donors plan to present
the project to their boards in the first half of 2024.
28. The table below presents the project cost by expenditure category.
Table 4: Project Cost by Expenditure Category
Expenditure Categories
Works
Goods
Services
Operating Cost and Sundry
Base Cost
Provision for Physical Contingencies
Provision for Price Escalation
Total Project Cost
Amounts in UA million
Foreign
Local
Total
Exchange
Currency
486.39
54.62
541.01
21.14
3.57
24.71
14.92
6.39
21.31
9.66
10.02
19.68
532.11
74.60
606.71
26.61
3.73
30.34
26.61
3.73
30.34
585.32
82.07
667.38
% of Base
Cost
% of Total
Project Cost
89.2%
4.1%
3.5%
3.2%
100.0%
5.0%
5.0%
110.0%
81.1%
3.7%
3.2%
2.9%
90.9%
4.5%
4.5%
100.0%
29. The table below presents the provisional project expenditure schedule by component.
Table 5: Project Expenditure Schedule by Component
Components
Construction
of
Electrical
Infrastructure
Institutional Support
Project Management
Base Cost
Provision for Physical Contingencies
Provision for Price Escalation
Total
% Total
E.
2024
2025
2026
Amounts in UA million
2027
2028
2029
83.76
83.76
83.76
83.76
83.76
83.76
1.53
3.30
88.59
4.43
4.43
97.45
14.6%
3.05
8.26
95.07
4.75
4.75
104.58
15.7%
3.05
6.61
93.42
4.67
4.67
102.76
15.4%
2.29
6.61
92.66
4.63
4.63
101.92
15.3%
1.53
3.30
88.59
4.43
4.43
97.45
14.6%
1.53
3.30
88.59
4.43
4.43
97.45
14.6%
2030
55.84
Total
558.42
2.29
15.26
1.65
33.03
59.78
606.71
2.99
30.34
2.99
30.34
65.76
667.38
9.9% 100.00%
Project Target Area Beneficiaries and Population and Other Stakeholders
30.
The project impact area includes 14 of Mauritania’s 15 administrative regions and Mali’s
Kayes Region. The project will benefit about 2.2 million people in Mauritania, 52% of them women and
help to connect 80 000 new households in 150 agro-pastoral localities. The project will be implemented
in Kayes Region in Mali and will benefit about 500 000 people, including 20 000 households in the 50
localities that will be connected to the network. Public consultations were held with civil society
organisations, local authorities, households and structured youth and women’s groups during the conduct
of studies and preparation of the project. These consultations confirmed the positive response of potential
8
beneficiaries to the project and the expected positive impacts. They will be continued with all
beneficiaries during project implementation to involve them in project activities.
31. In addition to the above-mentioned beneficiaries, the project will directly benefit the two countries’
governments (which will collect taxes from project activities) and the two national power utility
companies which will improve their performance, as well as 60 professional entities (schools, training
centres, health centres, handicraft workshops, women’s professional groups, etc.) in the localities
covered by the project. The execution of project works will provide employment for about 300 people,
25% of them women and girls, and about 50 permanent jobs will be created during the operation phase.
F.
Bank Group Experience and Lessons Reflected in Project Design
32. As of 30 September 2023, 36% of the Bank’s projects portfolio in Mauritania was flagged due mainly
to procurement and disbursement delays. However, the portfolio had no problematic projects. Overall,
portfolio performance was considered satisfactory with an average rating of 3 on a scale of 1 to 4. Despite
the difficulties encountered, the Bank’s portfolio in Mali improved relatively. The rate of instruments
flagged decreased from 93% at the end of September 2022 to 56% at the end of September 2023. It
should be noted that the Bank’s portfolio in Mali has faced serious challenges over the last three years
mainly due to the socio-political situation in the country, viz: (i) long loan effectiveness delays (more
than 18 months); (ii) delays in compensating project-affected persons; (iii) procurement delays; and (iv)
difficulties in mobilising counterpart funds.
33. In addition, the progress and supervision reports of ongoing Bank-financed multinational projects in
the electricity sub-sector have identified many challenges that need to be addressed to improve the
performance of these types of projects. These include (i) the multiplicity of actors; (ii) poor coordination
and harmonisation of project activities; (iii) weak technical and financial capacity of national power
utility companies; (iv) long disbursement delays; and (v) long delays in mobilising counterpart funds
and paying compensation to PAPs.
34. The aforementioned challenges were taken into account in the design of this project. To forestall the
weaknesses identified, there are plans to: (a) sensitise the two countries’ governments and stakeholders
on the impact of these challenges; (b) recruit key PMU staff before project approval; (c) build the
capacity of PMU staff members; (d) establish a supranational steering committee to provide strategic
guidance and harmonise PMU activities; (e) secure in an escrow account the funds allocated for the
compensation of PAPs in respect of works financed by the Bank; (f) use advance procurement actions;
and (g) sign performance contracts with each PMU staff member whose benefits will be paid based only
on proven performance after each annual evaluation. The details of the plans are provided in Technical
Annex 2.4.
3
PROJECT FEASIBILITY
A.
Financial and Economic Analysis
35. The project financial and economic performance was analysed based on the financial internal rate of
return (FIRR) and the economic rate of return (ERR) respectively. The main assumptions underlying the
analysis are: (i) the calculation of the FIRR based on the project financial costs and revenue derived
from the sale of electricity to new subscribers in the two countries; (ii) the calculation of the ERR based
on the economic costs (investment costs adjusted for exchange rate conversion factors) and the expected
project benefits, that is the sale of electricity to new subscribers, carbon savings made from the operation
of the photovoltaic plant and savings made by households on expenditure related to the use of alternative
energy sources. The performance indicators identified confirm the financial and economic viability of
the project.
9
Table 6: Key Economic and Financial Figures (for cost-benefit analysis)
FIRR (baseline scenario)
ERR (baseline scenario)
FNPV (discount rate)
ENPV (discount rate)
12.26%
16.24%
UA 158.78 million (10%)
UA 278.83 million (10%)
36. The total project cost, excluding the cost of the Institutional Support component, and the number of
new customers connected to the electricity network were used to calculate the generation cost per
customer connected in the project cost-effectiveness analysis. The cost-effectiveness ratio so determined
was compared with those of two Bank-financed regional electricity interconnection projects in the subregion, namely the 225 kV Guinea-Mali Electricity Interconnection Project and the 225 kV OMVG
Gambia–Guinea Bissau–Guinea–Senegal Interconnection Project. The table below presents the results
of the calculations. The details of the calculations are presented in Technical Annex 3.1.
Table 7: Key Economic and Financial Figures (for cost-effectiveness analysis)
CEA ratio (project)
•
•
•
UA 6 495.9 for PIEMM
UA 16 203.8 for the Guinea-Mali Interconnection Project
UA 3 547.4 for the OMVG Interconnection Project
LCE ratio (alternative)
Project Financial and Economic Performance Sensitivity
37. Project performance sensitivity is analysed based on the assumption of (i) a 10% increase in
investment costs; (ii) a 10% increase in operating costs; and (iii) a 2-year project start-up delay. The
overall result is that the project is resilient to variations in these various factors, but remains relatively
sensitive to increases in operating costs. While the economic rate of return remains higher than both the
weighted average cost of capital and the opportunity cost of capital in each of the test scenarios, the
financial rate of return is lower than the opportunity cost of capital only in the operating cost increase
scenario.
Other Positive Impacts
38. The project will have significant additional socio-economic impacts in both countries and the subregion. Some of these impacts cannot be quantified. The shutdown of several small diesel generators
and connection to solar and wind power plants in the project area will help avoid a significant amount
of estimated greenhouse gas emissions. There will also be a marked improvement in the living conditions
of the thousands of households that will have access to electricity and drinking water for the first time
(thanks to boreholes equipped with solar pumps to be constructed), not to mention the hundreds of health
centres and training entities whose performance will be improved through access to water and electricity.
In addition, the lighting costs of some households will be reduced in the “project” situation, compared
to the “no project” situation, resulting in an estimated annual saving of about UA 12 per household.
B.
Environmental and Social Safeguards
39. Project category: PIEMM has been classified under Category 1 based on the level of risk (disruption
of areas of high ecological value, especially the RAMSAR site of Lake Magui in Mali, high risk to wild
birds as the project crosses a bird migration zone, land acquisition and physical and/or economic
dispossession of a large number of people) and in keeping with Malian and Mauritanian regulations on
social and environmental assessment (Law No. 2000-045 on the Environmental Code and Decree No.
2004-094 of 24 November 2004, as amended and supplemented by Decree No. 2007-105 of 13 April
2007 for Mauritania and Decree No. 2018-0991/P-RM of 31 December 2018 for Mali). This
classification of environmental and social (E&S) safeguards was approved based on the Integrated
Safeguards Tracking System (ISTS) and included in SAP on 27 January 2023.
10
40. Environmental and social safeguard instruments: the Borrowers (the Governments of Mali and
Mauritania) prepared the 16 required E&S safeguards instruments, that is 9 for Mauritania and 7 for
Mali, namely for Mauritania: 1 Environmental and Social Management Framework (ESMF), 1
Resettlement Policy Framework (RPF), 3 Environmental and Social Impact Assessments (ESIAs), 2
Resettlement Action Plans (RAPs), 1 PAB, 1 Stakeholder Engagement Plan (SEP) including a detailed
project Grievance Redress Mechanism (GRM) and for Mali: 1 ESMF, 1 RPF, 1 ESIA, 1 RAP, 1 PAB,
1 SEP including a detailed project GRM and 1 Ornithological Study. These 16 E&S safeguards
instruments were reviewed and approved by the Bank and published by the Borrowers and the Bank on
the following dates: 14 August 2023 by the Borrowers and 14 August 2023 by the Bank.
41. Public consultations: the Bank made sure that the Borrowers carried out public consultations properly,
especially during the preparation of the 16 E&S safeguards instruments between March 2022 and July
2023. The minutes and summaries of these public consultations and the lists of persons consulted are
included in each of the instruments. A total of 10 formal public consultation meetings and individual
consultation sessions, including negotiations with PAPs and discussions with institutional stakeholders,
were held between 23 March 2022 and 29 July 2023. These involved 725 people, including 582 projectaffected persons (PAPs).
42. Given the nature of the planned activities and the characteristics of the project area, the main risks
and environmental impacts of the project are the disruption of areas of high ecological value in Mali
(134.90 kilometres of the RAMSAR site of Lake Magui, including a 40-metre project works right-ofway) and high risks for wild birds given that the project crosses a bird migration zone (collision with
birds, etc.); electrocution of large wild birds that come to nest or rest on electricity pylons); alteration of
the landscape; loss of 462 fruit trees; disruption and loss of biodiversity due to damage of wildlife
habitats (warthogs and wild birds).
43. The main risks and major social impacts associated with the various facilities and activities envisaged
under the project include the loss of 86 hectares of land in the 70-metre right-of-way of the 1 500kilometre power line and substations (25 hectares at Yélimané in Mali and 40 hectares at Kiffa and
Tintane in Mauritania); loss of grazing land, livestock activities, permanent and temporary buildings,
including 50 houses and 7 sheds; economic losses for a total of 582 project affected persons, including
135 women and 402 vulnerable people; risk of increased prevalence of HIV/AIDS and STDs; risk of
gender-based violence (GBV), sexual harassment (SH) and sexual exploitation and abuse (SEA).
44. Environmental and social risk and impact management measures: all measures for managing the
above-mentioned E&S risks and impacts are included in the 16 approved E&S instruments. The
implementation of these measures will cost USD 7.55 million (that is MRU 290 million, equivalent to
CFAF 4.7 billion), USD 5.75 million of the amount included in the ADF loan and USD 1.8 million the
cost of compensation for PAPs to be provided by SOGEM. These costs include those related to ESMP
and RAP implementation, including the cost of compensation for PAPs (USD 2 085 284), the Grievance
Redress Mechanism at each project management level, annual E&S performance audits, RAP
completion audits, and the cost of implementing additional E&S instruments (MV/LV networks). The
Borrowers will begin implementing sub-project works subject to environmental and social assessment
(ESIA and RAP) only upon receipt of the Bank’s no-objection opinion issued after verification of
compliance with national legislation and ISS requirements.
45. Involuntary resettlement: the construction of the various facilities mentioned above will affect 582
PAPs, including 125 women and 402 vulnerable PAPs due to physical displacement due to the
construction of the HV transmission line and solar power plants. In addition to the loss of land (owing
to the acquisition of 86 hectares of farmland), 8 community facilities and 462 fruit trees will be damaged.
All the 582 PAPs will receive compensation and assistance for resettlement. The total cost of
compensation in both countries is USD 2 085 284.
11
46. ADF loan resources will finance the total PAP compensation costs of USD 285 284 (MRU 10 972
467) for the works under lots 1 and 3. They will also finance the following activities under lots 1, 2 and
3: (i) the implementation of Livelihood Restoration Plans for USD 902 000; (ii) the implementation of
the GRM for USD 133 800; and (iii) the three RAP completion audits to the tune of USD 164 000.
47. SOGEM, which has opened two special accounts (one in Mali and one in Mauritania) into which a
total of USD 1.8 million has been transferred, will provide the funds required to finance the
compensation of people affected by Lot 2 works.
48. Capacity to implement the Borrowers’ E&S measures: regarding the overall institutional
arrangements for ESMP and RAP implementation, two E&S officers/specialists responsible for
monitoring the implementation of E&S safeguards, that is: (i) an environmental monitoring specialist
and (ii) a social safeguards specialist will be recruited on a competitive basis for each PMU (at SOGEM
in Mali and SOMELEC in Mauritania). All costs related to E&S activities will be covered by the Bank’s
financing.
49. Environmental and social compliance: the Borrowers’ monthly E&S implementation reports will
be made available to the Bank and stakeholders no later than the 5th of each month following the month
under review. In addition, annual reports on E&S performance audits conducted by an independent
auditor will be made available to the Bank and stakeholders no later than 31 January of the year following
the audited year. After each of the three RAPs has been implemented, an independent auditor will
prepare a final audit report which will also be submitted to the Bank. In the event of an environmental,
health and safety (EHS) incident at work, the Borrowers will notify the Bank within 48 hours of the
incident, submit the investigation report to the relevant authorities, and prepare and submit a root cause
analysis (RCA) report to the Bank. Considering the foregoing and as reflected in the Financing
Agreement, the project is considered ready for Board consideration, in keeping with the attached
ESCON.
Climate Change and Green Growth
50. The project has been classified under Category 2 in terms of climate risk based on the Bank’s Climate
Safeguards System (CSS). This implies that the project may be vulnerable to climate risks and that
climate change risks and adaptation measures should be reviewed. Risk management and adaptation
strategies should be reflected in project design and implementation plans. The vulnerability profiles of
Mauritania and Mali, as well as a set of relevant adaptation options for each specific climate risk, are
presented in the technical annex on climate change. In this context, the main climate issues for solar
energy production and transmission and distribution lines include (i) higher average temperatures; (ii)
heat waves; and (iii) strong winds and sandstorms.
51. In terms of mitigation, the project will reduce GHG emissions by at least 70 500 tCO2e per year, or
1.76 million tCO2e over the panels’ estimated 25-year lifespan (see technical annex on methods of
calculation). It will also help to reduce greenhouse gas emissions by generating hydroelectric power at
the Manantali, Félou and Gouina dams. In addition, the reduction of greenhouse gas emissions and
improvement of energy efficiency, including the drilling of boreholes equipped with solar pumps, can
help to strengthen the adaptive capacity of vulnerable groups by creating green jobs and improving their
livelihoods.
52. This project was appraised based on the Joint MDB Methodological Principles for Assessment of
Paris Agreement Alignment for mitigation and adaptation and is considered to be aligned as the main
component/activity (renewable energy generation and transmission) is consistent with the climate
change mitigation and resilience objectives of the Paris Agreement. A brief Paris Alignment Note on the
project is also attached as an annex.
53. The project is also supported by the Africa Adaptation Acceleration Program (AAAP), a joint
initiative of the African Development Bank and the Global Centre on Adaptation (GCA) which aims to
12
systematically integrate climate change adaptation into investment projects to improve their resilience
to climate hazards. The GCA will provide technical support to (1) analyse the impact of climate change
on facilities and their operation and performance over time; and (2) identify and assess possible green
and grey solutions for climate change adaptation and resilience, particularly during the operation and
maintenance phases. This analysis will be used to justify investment in adaptation and resilience
solutions, and to develop standards and technical specifications to enable project promoters to
proactively consider climate risk in the design and management of their infrastructure. Support will also
include the participation of project actors in the Masterclass on Climate-Resilient Infrastructure.
C.
Other Cross-cutting Priorities
Poverty Reduction, Inclusion and Job Creation
54. Increasing electrification rates in project beneficiary communities is a way of developing production
units to create decent jobs, especially for young people, women and isolated communities in the
beneficiary regions of both countries. The project impact areas are ideal for solar power generation and
the availability of electricity could make the regions more economically attractive, attract people to settle
in the areas and encourage private investment. Hence, the project will help to reduce poverty and regional
disparities and contribute to enhancing social cohesion through a more inclusive society that is more
resilient to shocks.
55. The connection of social facilities such as schools, vocational training centres and health centres to
the electrical grid and the drilling of boreholes equipped with solar pumps in the municipalities covered
by the project will help to improve access to public services, raise the level of human capital and improve
the living conditions of the most disadvantaged segments of the population. Public lighting will reduce
insecurity in neighbourhoods. In addition to connecting social facilities to the grid, the use of digital
technology through smart meters, the introduction of social tariffs or the provision of subsidised
connections will increase the impact of the project on the most vulnerable segments of the population.
Opportunities to Build Resilience
56. According to Mauritania's 2021 Country Resilience and Fragility Assessment (CRFA), the paradigm
shift in economic policy following the political transition in 2019 has provided a positive impetus for
resilience and economic recovery. However, the COVID-19 pandemic and recent global conflicts have
had a negative impact on the economies of Mauritania and Mali, as they have had on the economies of
many other countries. Natural disasters and climate change are another challenge for both countries,
leading to food insecurity and malnutrition, especially among rural dwellers. In addition, poverty and
lack of social cohesion remain major challenges for both countries. Increased fragility, conflicts and
violence are having a knock-on effect on economic performance, making communities even more
vulnerable than before.
57. In this respect, the project is of strategic importance, as it provides an opportunity to strengthen the
common interests of Mauritania and Mali, thereby promoting peace and regional cohesion. The project
will also help to prevent insecurity in the sub-region. As it will be implemented in the Sahel, the
economic opportunities and prospects it offers can act as a preventive measure by helping to address the
root causes of insecurity and the likelihood of young people turning to violence. The project will promote
integration and the development of a regional electricity market by increasing energy trade between the
two countries. This will build resilience through sustainable revenue generation, strengthen the energy
sectors in Mauritania and Mali, and generate positive effects beyond the countries directly concerned by
the project. In addition, the involvement of OMVS will contribute to building the capacity of regional
institutions in the energy sector (see details in Technical Annex 3.2).
Promoting Gender Equality and Women’s Empowerment
58. PIEMM has been classified under Category 2 of the Bank’s Gender Marker System (GMS) because
it will promote gender equality and women’s empowerment through its key outputs and outcomes.
13
Specifically, the project will help to ensure that men and women have access to energy for domestic and
economic use by connecting localities close to the power line. Access to electricity will reduce women’s
workload and reinforce their economic autonomy, as well as improve the quality of basic social services.
59. The main gender gaps identified are lack of economic opportunities for women in rural areas with a
predominantly female population and high rates of female-headed households; women’s limited access
to education, health, land ownership, finance/credit and technology, which affects their productivity and
workload; high fertility rates and the burden of domestic chores; sociocultural constraints that limit
women’s participation and decision-making power; and the prevalence and social acceptability of
various forms of GBV; low participation in technical training and the energy sector workforce; and
limited gender mainstreaming in the energy sector. Against this backdrop, PIEMM intends to (i) target
access to electricity for women-headed households in like manner as for other households; (ii) promote
women’s access to training, internships and employment; (iii) implement a capacity-building
programme for women’s organisations (organisational, entrepreneurial, technical and social skills leadership, GBV, health, functional literacy, construction of cold stores and acquisition of production
equipment for organized women’s groups); (iv) develop a gender and energy module (SOGEM/ISME);
and (v) mainstream gender issues in technical assistance operations and studies (energy efficiency action
plans, legal and regulatory framework for electricity trade). Each PMU will have a gender specialist (see
details in Technical Annex 3.3).
4
PROJECT IMPLEMENTATION
A.
Institutional and Implementation Arrangements
60. The energy ministries of the two countries will be responsible for project implementation. This
responsibility will be delegated to the Mauritanian Electricity Company (SOMELEC), (EDM-SA) and
the Manantali Energy Management Company (SOGEM), to which the two governments will transfer
financial resources. The two governments have decided to entrust SOGEM with the construction and
management of part of the power transmission network, which will be considered a joint facility under
the Senegal River Basin Development Organization (OMVS), in like manner as the Manantali, Félou
and Gouina power plants. SOGEM will use its operational arm, the Manantali and Félou Management
Company (SEMAF-SA)8, of which it is the sole shareholder, to operate the facilities under an agreement.
The other project facilities in the two countries will be built and operated by national electricity
companies.
61. Therefore, the project will be implemented by three project management units (PMUs):
▪
PMU/SOGEM: it will be responsible for the construction of the 225 kV power
transmission network, known as Lot 2, on both sides of the border between the two
countries, from the Kayes substation in Mali to the Kiffa substation in Mauritania, via the
Yelimané and Tintane substations, and then from the Tintane substation to the Aioun
substation (in Mauritania). The PMU/SOGEM, which has already successfully managed
225 kV transmission network construction projects in Mali, Mauritania and Senegal, has
the necessary experience and staff to manage this part of the infrastructure entrusted to
SOGEM. The PMU/SOGEM team will consist of a coordinator, an administrative and
financial officer, an accountant, a procurement specialist, an environmental safeguards
and climate change specialist, a social safeguards specialist, an electrical engineer, a
monitoring and evaluation expert, a communication expert, and support staff. The
Environmental Safeguards and Climate Change Specialist will be assisted by health,
safety, environment (HSE) and climate assistants and the Social Safeguards Specialist by
a social affairs and gender assistant. Regarding procurement, the PMU will receive
8
SEMAF is a subsidiary of SOGEM responsible for the operation and maintenance of the Manantali (200 MW), Félou (60 MW) and Gouina (140 MW)
dams. The total generation capacity made available by the regional organisation to the three countries (Mali, Mauritania and Senegal) is 400 MW (42.65%
in Mali, 23.55% in Mauritania and 33.80% in Senegal), or nearly 1 800 gigawatt-hours of clean energy per year, for the benefit of 3 national electricity
companies: EDM-SA, SOMELEC and SENELEC.
14
technical assistance from a senior international expert with experience in technical and
financial partner procedures. The PMU/SOGEM will be backed in each country by
OMVS national units and local coordination committees (LCCs) to monitor the
implementation of environmental and social safeguards measures (ESMPs and RAPs).
Each LCC will be chaired by the Prefect and will include representatives of local technical
services, the mayors of the municipalities concerned and local and civil society
representatives. There will be 2 LCCs in Mali and 4 in Mauritania.
▪
PMU/SOMELEC: it will be responsible for the construction of facilities on Mauritanian
territory, excluding the part of the 225 kV power line entrusted to SOGEM. The facilities
concerned include (i) sections of the 225 kV power line between the Nouakchott and
Kiffa substations (Lot 1) and between the Aioun and Néma substations (Lot 3); (ii) the
Kiffa solar power plant; and (iii) the MV/LV distribution networks in Mauritanian
localities crossed by the 225 kV line. The PMU/SOMELEC team will comprise a
coordinator, an administrative and financial officer, an accountant, a procurement
specialist, a gender expert, an environmental safeguards and climate change specialist, a
social safeguards specialist, eight electrical engineers, two civil engineers, a
telecommunications engineer, a monitoring and evaluation expert and support staff. There
are plans to recruit all PMU staff, except for the coordinator and support staff who will
be appointed by the national party after the validation of their CVs by the Bank. The
management procedures manual to be prepared for the Bank-financed Rural Investment
and Sustainable Development Programme (RIMDIR) will be used for this operation,
except for the institutional procedures specific to the operation to be described. An
accounting and budget management software package will be procured and configured to
ensure the reliability of financial information. The format of financial reports will be
agreed upon with the Bank at the operation’s inception workshop. The assessed fiduciary
risk is deemed high.
▪
PMU/EDM-SA: it will be responsible for the construction of the HV/LV distribution
network infrastructure in Malian localities crossed by the 225 kV power line, as the entire
transmission network under the project in Mali has been entrusted to SOGEM. This is the
PMU of the Mini Hydropower Plants and Related Distribution Networks Development
Project (PDM HYDRO) which is being implemented with Bank financing. The
procurement activities of PDM HYDRO will soon be completed and the PMU has the
necessary experience and sufficient and competent staff to manage this activity. The PMU
will comprise a coordinator, an administrative and financial officer, an accountant, a
procurement specialist, an environmental and social safeguards specialist, an electrical
engineer, an electromechanical engineer, a monitoring and evaluation expert and support
staff.
62. These PMUs will be supported by consulting engineering firms responsible for works control and
supervision. The Monitoring Committee established at SOGEM will serve as the Supranational Steering
Committee of the project and provide strategic guidance and coordination of the construction of the 225
kV power line. The Committee will be composed of representatives of OMVS member countries, the
OMVS High Commission, SOGEM, SEMAF, SOMELEC and EDM-SA.
B.
Procurement
63. Procurement Arrangements
(i)
The procurement of works, goods and services, including consultancy services, financed
with Bank resources will be per the Procurement Policy for Bank Group-funded
Operations (“AfDB Procurement Policy”) dated October 2015, and the provisions of
Financing Agreements.
15
(ii)
In keeping with the Bank’s policy and following the various assessments carried out (at
the national and sector levels, market analysis, project complexity, transactions, and
capacity of executing agencies), it was agreed that all procurement for both countries and
those to be carried out in Mali will be in line with the Bank’s procurement methods and
procedures, using its bidding documents. The procurement of simple goods and works of
low value, available in large quantities on the local market and to be carried out in
Mauritania, could be done per the national procurement system.
(iii) The Governments of Mauritania and Mali have requested the Bank’s approval in principle
for the use of advance contracting procedures (ACPs) for the construction of the 225 kV
transmission line and substations, as well as for the supervision and monitoring of the
construction of the transmission line and the study and supervision of the Kiffa solar
power plant.
The Bank has approved the use of these ACPs9, in accordance with the provisions of Section 11.2 of the
Procurement Policy for Bank Group-funded Operations.
64. Procurement risk and capacity assessment (PRCA): to factor in project specificities, the Bank assessed: (i)
country, sector and project risks; and (ii) the capacity of executing agencies. Details of the procurement
arrangements are presented in Technical Annex 4.5.
C.
Financial Management, Disbursement and Auditing
65. Financial management: SOGEM, EDM SA and SOMELEC will be responsible for the financial
management of the project. All these entities have administrative and financial autonomy and
management bodies capable of ensuring beyond doubt the traceability of financial transactions, the
judicious, effective and efficient use of project resources for the intended purposes, the security of
project assets and the proper presentation of project accounts. In addition, the public finance
management systems of Mali and Mauritania will not be used for this operation.
66. Financial management arrangements: (i) the Manantali 2 Project Management Unit (PMU)
established by SOGEM will be responsible for the financial management of the regional component of
the project. It has extensive experience in administrative and accounting management and financial
monitoring of donor-funded operations. Its fiduciary team consists of a regional coordinator, a financial
management expert, a monitoring and evaluation expert, an accountant and support staff. The PMU has
a set of administrative, financial and accounting procedures in line with relevant best practices which
will be supplemented by the operation’s institutional procedures. Financial and accounting transactions
will be recorded using SOGEM’s SAARI accounting system, and quarterly financial reports and annual
project financial statements will be prepared using data provided by SOGEM. SOGEM’s fiduciary risk
is deemed moderate; (ii) PMU/EDM-SA, which is the PMU of the Bank-financed PDM HYDRO, will
be responsible for the fiduciary management of the electrification of the localities crossed by the
transmission line on Malian territory. The latest assessment of this PMU revealed accounting and
internal control weaknesses which are being addressed through an action plan that is being implemented.
The TOM2PRO software purchased by the PMU will be configured to produce quarterly interim and
annual financial reports and statements. The assessed fiduciary risk is deemed substantial; (iii) the
PMU/SOMELEC will comprise a fiduciary team to be recruited on a competitive basis. The management
procedures manual to be developed under the Bank-financed RIMDIR project will be used for this
operation, except for the institutional procedures specific to the operation to be described. An accounting
and budget management software package will be purchased and configured to ensure the reliability of
9
The Procurement Policy for Bank Group-funded Operations (Section 11.2) authorises the use of advance contracting procedures. The Borrower may
consider, for the timely implementation of a project and in certain circumstances, to proceed with the initial steps of the procurement of goods, works, nonconsulting and consulting services before signing the related Financing Agreement (FA). The procurement which is referred to as advance contracting
procedures and methods to be used shall be in accordance with the Bank’s Procurement Framework for the eventual contracts to be eligible for Bank
financing, and the Bank shall review the process used by the Borrower. A Borrower undertakes such advance contracting at its own risk, and any “no
objection” given by the Bank prior to the approval of the financing by the Board does not commit the Bank to provide financing for the project in question.
If the contract is signed, reimbursement by the Bank of any payments made by the Borrower under the contract prior to signing of the FA is referred to as
Retroactive Financing and is only permitted within the limits specified in the FA.
16
financial information. The format of financial reports will be agreed upon with the Bank during the
project inception workshop. The assessed fiduciary risk is considered substantial.
67. In addition to these provisions, the management control and internal audit departments of these three
entities will include the project in their annual work programmes and submit their mission reports to the
Bank.
68. Disbursement: ADF, CIF and GCF resources will be disbursed through the methods set out in the
Disbursement Manual, namely (i) the special account method; (ii) the direct payment method; and (iii)
the reimbursement guarantee method, where applicable. The disbursement letter of each financing
agreement will provide details of the disbursement methods and rules:
▪
▪
▪
▪
the EDM-SA will open two special accounts (one to receive the operating funds of the
PMU and the other funds for the compensation of persons affected by the construction of
the distribution network);
SOMELEC will open two special accounts (one will receive the operating funds of the
PMU and the other funds for the compensation of project-affected persons – PAPs).
under the on-lending agreements between SOGEM and Mali and Mauritania, SOGEM
will open two special accounts, one to receive part of the ADF loan resources on-lent to
it by Mali to finance regional activities eligible under the special account, and the other
to receive part of the ADF loan resources on-lent to it by Mauritania to finance regional
activities eligible under the special account.
the replenishment of these accounts will be subject to the fulfilment of the standard
conditions for use of the special account. It is understood that the balance of the funds onlent to SOGEM by Mali and Mauritania to finance the construction of the transmission
network will be disbursed through direct payment.
69. Auditing: the project's annual financial statements will be audited by an independent auditor in
accordance with the terms of reference for the audit of Bank Group-funded investment operations. In
Mali, SOGEM will recruit, on a competitive basis, an auditor to audit its activities and those carried out
by the EDM-SA. In Mauritania, SOMELEC will recruit, on a competitive basis, an auditor to audit the
activities carried out under its responsibility. The audit reports will be submitted to the Bank within six
months of the end of the financial year audited.
D.
Monitoring and Evaluation
70. SOMELEC, EDM-SA and SOGEM will monitor the implementation of the project and keep statistics
on outcomes achieved by the monitoring-evaluation experts who will be members of the PMU staff.
Each of these monitoring-evaluation experts will keep a record of all project outcomes based on genderdisaggregated data and will prepare quarterly project progress reports after establishing the baseline
situation, also based on gender-disaggregated data, at the commencement of the project. There are plans
to recruit consulting engineers (CEs) to assist the PMUs in monitoring and supervising works execution.
The CEs will also keep statistics on project outcomes. Joint donor supervision missions will also be
fielded periodically and a joint project midterm review mission will be fielded, as well as a completion
mission at the end of the project. Details of project monitoring and evaluation are provided in Technical
Annex 4.1.
E.
Governance
71. In such a large multi-donor-financed project, governance issues, including fraud and corruption, could
arise in the procurement process. Following an assessment of the national procurement systems, it was
agreed that the Bank’s procurement rules and procedures will be used for major works contracts, subject
to the Bank’s prior no-objection opinion at each stage of the process.
17
72. Concerning administrative and financial management, there are plans to prepare administrative,
accounting and financial procedures manuals, keep separate project accounts, use appropriate
management software and recruit independent external auditors to conduct project financial and
operational audits. In addition, project management units are established in the entities responsible for
delegated project management, namely SOGEM, SOMELEC and EDM-SA. These three companies
have appropriate management and internal control bodies. They each have a functional Board of
Directors which reviews and approves their annual work programmes and budgets (AWPBs) and
financial statements, which are regularly audited by independent external auditors. The PMUs will be
subject to the same management and control principles.
73. Furthermore, in 2022, the Electricity Regulatory Index (ERI)10 scores for Mauritania and Mali were
2.2 and 4.5 respectively, ranking the two countries 39th and 30th out of 43 African countries. These
indices will improve with the ongoing new reforms which will ensure efficient project implementation
and operation.
F.
Sustainability
74. The project is listed as a top sector priority in both countries’ documents. The countries have prepared
all environmental and social safeguards instruments, which have been published on various national
websites and the Bank’s website. Both countries have undertaken to ensure safety on construction sites
and during the operation of the facilities to be built. The sustainability of the project will also depend on
the quality of the facilities to be built and the operational and financial capacity of SOGEM, SOMELEC
and EDM-SA to ensure their proper operation and maintenance. These entities have the technical knowhow to fully assume their responsibilities and will be given appropriate resources. The revenue to be
generated from the operation of the facilities will beef up the maintenance and upkeep budgets allocated
annually to these entities. In addition, the gradual reduction in thermal generation in favour of imports
of renewable energy will improve the EDM- SA’s financial situation and allow for maintenance to be
carried out more effectively.
75. Hence, the civil society organisations and potential beneficiaries consulted during project preparation
and appraisal are enthusiastic about the future project and have promised to support the national
electricity companies in both countries by protecting the facilities from any acts of vandalism and paying
their electricity bills.
G.
Risk Management
76. The main project risks include (A) security, political and governance risks (substantial): security
crises and political instability in the sub-region could hamper the successful implementation of the
project. These threats have been factored into project design and implementation through (i) the
commitment of the governments of both countries to take the necessary security measures at construction
sites; (ii) the efforts made by Mali, Mauritania and other Sahelian countries to improve overall security
in the region, with the support of the international community; (iii) the establishment of a supranational
security committee between the two countries, with a national subcommittee in each country, to ensure
the security of the sites at all times during the construction phase; and (iv) the flexibility offered to the
electricity distribution network construction contractors to carry out similar works in other localities in
the country in the event of a continuous deterioration of security in a given locality. (B) macroeconomic
risks (moderate): rising world prices of construction equipment due to the international situation
characterised by conflicts in several regions of the world. This risk was taken into account by: (i)
estimating unit costs based on recent studies and the most recent competitive bid calls; (ii) making a
significant provision of 10% of the project base cost (5% for physical contingencies and 5% for price
escalation); and (iii) carrying out procurement through competitive bidding to obtain the best possible
10
The ERI is a composite index of the three indices, namely the Regulatory Governance Index (RGI), the Regulatory Substance Index (RSI) and the
Regulatory Outcome Index (ROI). From questionnaires distributed to regulators and electricity utility companies of each participating country by the African
Development Bank, scores are assigned to each question.
18
cost. (C) Engineering design risk (moderate): insufficient electricity supply to meet the additional
demand generated by the project. This risk will be mitigated by connecting the existing 100 MWp wind
farm in Mauritania to the transmission network to be constructed, commissioning6 the power plants
under construction in Mali and Mauritania in the near future, and the possibility offered Mauritania to
use its full share of the electricity generated by the OMVS plants (Manantali, Gouina and Félou),
estimated at 94 MW. (D) technical implementation risks: ineffective coordination of all works and delays
in implementation due to the weak capacity of contractors to complete works on time. These risks will
be mitigated by recruiting contractors through a rigorous competitive bidding process, relying on the
Supranational Steering Committee of the project for strategic guidance, and enlisting the assistance of
consulting engineering firms to monitor and supervise works. Details of risks and mitigation measures
are presented in Technical Annex 4-2.
H.
Knowledge Building
77. The type of knowledge to be generated through the implementation of this project is based on the
wide range of technical, economic, financial and legal expertise involved in the development and
operation of electrical infrastructure. This expertise will be reflected in the studies conducted, as well as
the support and specific training to be provided to actors in the electricity sub-sector in both countries.
The support of engineering firms will provide an additional guarantee for the transfer of know-how and
will facilitate the dissemination of knowledge on the Bank’s and stakeholders’ websites, as well as in
the project newsletter. The joint missions of TFPs fielded during project implementation (supervision
and midterm review) and related press conferences will provide opportunities not only to share
knowledge but also to increase the visibility of the activities of the Bank and the Desert to Power
Initiative.
5
LEGAL INSTRUMENTS AND AUTHORITY
A.
Legal Instruments
78. The selected financial instruments include (i) an ADF Loan Agreement between the African
Development Fund (the “Fund”) and the Islamic Republic of Mauritania (the “Borrower”) for a loan
equivalent to UA 202.7 million; (ii) an ADF Loan Agreement between the African Development Fund
(the “Fund”) and the Republic of Mali (the “Borrower”) for a loan equivalent to UA 25 million; (iii) a
CIF Grant Protocol of Agreement between the Fund (on behalf of the Climate Investment Funds) and
the Republic of Mali for a grant equivalent to USD 10 million; (iv) a GCF Grant Protocol of Agreement
between the Fund (on behalf of the Green Climate Fund) and the Islamic Republic of Mauritania for a
grant equivalent to USD 1.5 million; and (v) a GCF Grant Protocol of Agreement between the Fund (on
behalf of the Green Climate Fund) and the Republic of Mali for a grant equivalent to USD 1.5 million.
B.
Conditions for Bank Intervention
B.1.
Conditions Precedent to Effectiveness of ADF Loan Agreements
79. Effectiveness of the ADF Loan Agreements shall be subject to fulfilment by the Borrowers, to the
Fund’s satisfaction, of the conditions set out in Section 12.01 of the General Conditions Applicable to
Loan, Guarantee and Grant Agreements of the African Development Bank and the African Development
Fund.
B.2. Conditions Precedent to Effectiveness of CIF and GCF Grant Protocols of Agreement
80. The effectiveness of the CIF and GCF Grant Protocols of Agreement shall be subject to their signing
by the Recipients and the Fund.
B.3.
Conditions Precedent to First Disbursement of ADF, CIF and GCF Resources
81. In addition to the effectiveness of the relevant agreements, first disbursements of ADF loan and CIF
and GCF grant resources shall be subject to fulfilment by the Borrowers/Recipients, to the Fund’s
satisfaction, of the following conditions:
19
(i)
Regarding loans, provide the Fund with evidence of the signature of ADF Loan on-lending
agreements by the Borrowers and each of the executing agencies, in form and substance
satisfactory to the Fund;
(ii)
Regarding grants, provide the Fund with evidence of the signature of a CIF Grant and/or
GCF Grant on-lending agreement between the Donors and each of the executing agencies,
in form and substance satisfactory to the Fund; and
(iii) Provide the Fund with evidence of establishing each PMU and recruiting its key staff,
including a coordinator, an administrative and financial officer, a procurement specialist,
an environmental safeguards and climate change specialist and a social safeguards
specialist.
20
B.4.
Conditions Precedent to Disbursements for Works Involving Resettlement
82. Subject to the provisions of Sections B.1 (Effectiveness) and B.3 (Conditions Precedent to First
Disbursement) above, the obligation of the Fund to disburse Loan resources for works involving the use
of the Environmental and Social Management Framework (ESMF) and the Resettlement Policy
Framework (RPF) shall be subject to fulfilment by the Borrower of the following additional conditions:
(a)
Submission of a works and compensation schedule prepared in line with the Resettlement
Action Plan (RAP) and the Bank’s environmental and social safeguards requirements, in
form and substance satisfactory to the Bank detailing: (i) each lot of works under the
project, and (ii) the timeframe for compensation and/or resettlement of all project-affected
persons (PAPs) in respect of each lot;
(b)
Submission of satisfactory evidence that all project-affected persons (PAPs) in respect of
the works under the project have been compensated and/or resettled in accordance with
the Environmental and Social Management Plan (ESMP), the Resettlement Action Plan
(RAP), including the Grievance Redress Mechanism (GRM), the Stakeholder
Engagement Plan, and/or the agreed works and compensation schedule and the Bank’s
requirements, before the commencement of such works and, in any case, before the actual
relocation and/or possession of the land and related assets of PAPs; or
(c)
In lieu of paragraph (b) above, provide satisfactory evidence that the resources allocated
for the compensation and/or resettlement of PAPs have been deposited in a dedicated
account in a bank acceptable to the Bank, or remitted to a trusted third party acceptable
to the Bank, where the Borrower can prove, to the satisfaction of the Bank, that the
compensation and /or resettlement of PAPs, per paragraph (b) above, could not be
undertaken in full or in part, because of the following reasons:
(i)
the identification of the PAPs by the Borrower is not feasible or possible;
(ii)
ongoing litigation involving the PAPs and/or affecting the compensation and/or
resettlement exercise; or
(iii) any other reason beyond the control of the Recipient, as discussed and agreed with
the Bank.
B.5.
Environmental and Social Safeguards Commitments
83. The Borrower shall undertake and oblige the Project Executing Agencies and all their contractors,
subcontractors and agents to:
(i)
Implement the project in keeping with the site-specific Environmental and Social
Management Plan (ESMP) and, where applicable, the site-specific Resettlement Action
Plan (RAP) and/or approved works and compensation schedule, the Bank’s requirements
and the applicable national legislation, in a form and substance satisfactory to the Bank;
(ii)
Prepare and submit to the Bank monthly reports on the implementation of ESMPs and
RAPs, including any shortcomings identified and the related corrective actions taken, no
later than the 5th of the month following the end of the month under review;
(iii) Prepare and submit to the Bank, no later than 31 January of each year, the annual
environmental and social performance audit report of the previous year prepared by an
independent third party;
(iv) Establish the Grievance Redress Mechanism (GRM) and an operational stakeholder
engagement plan upon commencement of the project, before the start-up of project
activities; and
21
(v)
Refrain from taking any action that would prevent or hinder the implementation of the
ESMF, RPF, ESMP, RAP, GRM and Stakeholder Engagement Plan, including any
modification, suspension, waiver and/or cancellation of any provision thereof, in full or
in part, without the Bank’s prior written consent.
84. The Borrower shall undertake and obligate all its contractors, subcontractors and agents not to begin
work on any area affected by the implementation of the project unless all PAPs in such area have been
compensated and/or resettled in keeping with the specific RAP and/or approved works and compensation
schedule.
B.6.
Other Commitments
85. The Borrowers/Recipients undertake to:
(i)
Provide the Fund with evidence of recruiting, no later than 3 months after signing the
Financing Agreements with the Fund: (a) a gender expert; (b) an environmental
safeguards and climate change specialist; (c) a social safeguards specialist; (d) two
electrical engineers; (e) a monitoring and evaluation expert; and (f) a communication
expert and support staff whose qualifications and experience are deemed satisfactory to
the Bank;
(ii)
Provide to the Fund, no later than 12 months after signing the Financing Agreements,
evidence that the other donors have approved their share of project financing;
(iii) Provide the Fund with evidence of procuring and configuring the project accounting
software;
(iv) Prepare and submit to the Bank for approval, no later than six months after first
disbursement, the project administrative and accounting procedures manual;
(v)
C.
Provide the Fund with evidence that the Islamic Republic of Mauritania has provided to
the project, no later than six months after the signing of the Agreement, or such later date
as may be acceptable to the Bank, the national counterpart contribution amounting to
MRU 277.2 million.
Compliance with Bank Policies
☒ This project complies with all applicable Bank policies.
☐ There are exceptions to Bank policies.
The Independent Review Mechanism of the African Development Bank Group
86. Communities and individuals who believe that they are adversely affected by a project supported by
the African Development Bank Group (AfDB) may submit complaints to existing project-level
grievance redress mechanisms or to AfDB’s Independent Recourse Mechanism (IRM). The IRM ensures
that project-affected communities and individuals may submit their complaints to the Bank’s
Independent Review Mechanism which determines whether harm occurred or may occur because of
AfDB non-compliance with its policies and procedures. To submit a complaint or request further
information, please contact: IRM@afdb.org or visit the IRM website (www.irm.afdb.org). Complaints
may be submitted at any time after concerns have been brought directly to AfDB’s attention, and Bank
Management has been given an opportunity to respond before reaching out to the IRM.
22
6
RECOMMENDATION
87. Management recommends that the Board of Directors approve:
▪
(i) the proposed UA 202.7 million ADF loan and (ii) the proposed USD 1.5 million GCF
grant to the Islamic Republic of Mauritania for the purpose and under the conditions
outlined in this report.
▪
(iii) the proposed UA 25 million ADF loan; (iv) the proposed USD 1.5 million GCF grant;
and (v) the proposed USD 10 million CIF grant to the Republic of Mali for the purpose
and under the conditions outlined in this report.
23
7 RESULTS FRAMEWORK
R E S U L T S
A
F R A M E W O R K
PROJECT INFORMATION
❚ PROJECT NAME AND SAP CODE: MULTINATIONAL – DESERT TO POWER
❚ COUNTRY/REGION: MULTINATIONAL (MAURITANIA & MALI)
INITIATIVE – 225 KV MAURITANIA-MALI POWER INTERCONNECTION AND
NORTH AND WEST AFRICA
RELATED SOLAR POWER PLANT DEVELOPMENT PROJECT (P-ZI-FAO-214)
❚ PROJECT DEVELOPMENT GOAL: Stimulate the increase in solar power generation capacity and universal access to electricity in Mauritania and Mali through the
development of electrical power grids.
❚ ALIGNMENT INDICATOR(S): (1) Power transmission lines in Mauritania and Mali; (2) Electricity access rate in each of the two countries.
B
RESULTS MATRIX
RESULTS CHAIN AND INDICATOR
RMF/ADOA
UNIT OF
BASELINE
TARGET (2030)
MEANS OF VERIFICATION
DESCRIPTION
INDICATOR
MEASUREMENT
(2023)
❚ OUTCOME 1: THE REGIONAL CLEAN ENERGY TRADE CAPACITY IS INCREASED AND CO 2 EMISSIONS ARE AVOIDED.
OUTCOME INDICATOR 1.1: Annual quantity of
SOMELEC and EDM-SA annual
☒
GWh
0
600
energy traded between the two countries
progress reports
OUTCOME INDICATOR 1.2: Annual quantity of
☒
GWh
0
88.5
SOMELEC annual progress reports
renewable energy produced
OUTCOME INDICATOR 1.3: Annual amount of
☒
MT(Eq-CO2)
0
70.5
SOMELEC annual progress reports
CO2 avoided
❚ OUTCOME 2: THE ACCESS OF THE POPULATION TO ELECTRICITY HAS INCREASED.
OUTCOME INDICATOR 2.1: People with access
480 000 (52% of
SOMELEC OMVS / SOGEM annual
Number
0
☒
to electricity through the project in Mauritania
them women)
reports
OUTCOME INDICATOR 2.2: People with access
140 000 (52% of
EDM-SA/OMVS/SOGEM
annual
☒
Number
0
to electricity through the project in Mali
them women)
reports
❚ OUTCOME 3: THE NUMBER OF EMPLOYED PEOPLE HAS INCREASED.
- Mali: 75 (25% of
them women)
OUTCOME INDICATOR 3.1: People with casual
SOMELEC/EDM-SA/
☒
Number
0
- Mauritania:
225
jobs as a result of the project (including women)
OMVS/SOGEM annual reports
(25%
of
them
women)
- Mali: 15 (30% of
OUTCOME INDICATOR 3.2: People with
them women)
EDMSA/SOMELEC
☒
permanent jobs as a result of the project (including
Number
0
- Mauritania:
35
OMVS/SOGEM annual reports
women)
(30%
of
them
women)
❚ OUTPUT 1: THE INSTALLED RENEWABLE ENERGY CAPACITY HAS INCREASED.
OUTPUT INDICATOR 1.1: Installed
photovoltaic (PV) power in Mauritania
solar
☒
MWp
❚ OUTPUT 2: THE ACCESS OF HOUSEHOLDS TO ELECTRICITY HAS INCREASED.
OUTPUT INDICATOR 2.1: Number of meters
installed in newly connected households in
Number
☒
Mauritania
0
50
SOMELEC/OMVS/ SOGEM annual
reports
80 000 (30% of them
OMVS/SOGEM/SOMELEC annual
women-headed
reports
households)
20 000 (15% of them
OUTPUT INDICATOR 2.2: Number of meters
OMVS/SOGEM/EDM-SA
annual
Number
0
women-headed
☒
installed in newly connected households in Mali
reports
households)
❚ OUTPUT 3: THE LENGTH OF 225 kV TRANSMISSION AND DISTRIBUTION NETWORK LINES IN BOTH COUNTRIES HAS INCREASED.
OUTPUT INDICATOR 3.1: Length of 225 kV
1 373 (184 km of it in
OMVS/SOGEM/ SOMELEC/EDMtransmission line with a transit capacity of 600 MW
km
0
Mali and 1 189 km in
☒
SA annual reports
built
Mauritania)
8 built (1 of them in
OUTPUT INDICATOR 3.2: Number of 225 kV/30
Mali)
and
2
OMVS/SOGEM/
☒
Number
0
kV substations built or extended
extended (1 of them
SOMELEC/EDMS-A annual reports
in Mali)
500 (100 km of it in
OUTPUT INDICATOR 3.3: Length of medium
OMVS/SOGEM/
km
0
Mali and 400 km in
☒
voltage (MV) networks built
SOMELEC/EDM-SA annual reports
Mauritania)
1 525 (325 km of it
OUTPUT INDICATOR 3.4: Length of low voltage
OMVS/SOGEM/
km
0
in Mali and 1 200
☒
(LV) networks built
SOMELEC/EDM-SA annual reports
km in Mauritania)
❚ OUTPUT 4: LOCAL DEVELOPMENT AND EMPOWERMENT OF WOMEN’S AND YOUTH GROUPS ARE STRENGTHENED.
36 (13 of them in
OUTPUT INDICATOR 4.1: Number of boreholes
OMVS/SOGEM/
☒
Number
0
Mali and 23 in
built and equipped with solar pumps
SOMELEC/EDM-SA annual reports
Mauritania)
OUTPUT INDICATOR 4.2: Number of cold stores
7 (2 of them in Mali
OMVS/SOGEM/
☒
Number
0
built
and 5 in Mauritania)
SOMELEC/EDM-SA annual reports
OUTPUT INDICATOR 4.3: Number of mills
98 (20 of them in
OMVS/SOGEM/
☒
procured and made available to women’s and youth
Number
0
Mali and 78 in
SOMELEC/EDM-SA annual reports
groups
Mauritania)
OUTPUT INDICATOR 4.4: Number of
OMVS/SOGEM/SOMELEC/EDM☒
Number
0
2 (1 in each country)
multipurpose platforms set up
SA annual reports
24
0
8 ENVIRONMENTAL AND SOCIAL COMPLIANCE NOTE (ESCON)
A.
Basic Information 11
Project Name: Multinational – Desert to Power Initiative – 225 kV Mauritania-Mali Power Project SAP Code: P-Z1-FA0-214
Interconnection and Related Solar Power Plant Development Project
Country: Mauritania & Mali
Financing Instrument12: DI
FI
BS
CL
GU
RPA
EF
RBF
Project Sector: Energy (PERN)
Project Officer: Pierre DJAIGBE
Ex-ante appraisal mission date: 26/9/2023 to 4/10/2023
Estimated Board Presentation Date: 15/12/2023
Environmental Safeguards Specialist: Gratien BONI / Abdoul’Ganyi BACHABI ALIDOU
Social Safeguards Specialist: LAKPO Kossi Doumegno/ Mohamed Fadel A. CHEIKH MOHAMED FADEL
Environmental and social category: 1
Date: 27/1/2023
Operation Type: SO
NSO
PBO
Is this project processed under rapid responses to crises and emergencies?
Yes
No
Is this project processed under a waiver to the Integrated Safeguards System?
Yes
No
B. Disclosure and Compliance Monitoring
B.1. Mandatory Disclosure
Environmental Assessment/Audit/System/Others (specify: 4 ESIAs, 2 ESMFs, 1 ornithological study and 2 PABs)
Was/were the document (s) disclosed prior to appraisal?
Yes
No
NA
Date of "in-country" disclosure by the borrower/client
14/8/2023
Date of receipt, by the Bank, of the authorisation to disclose
14/8/2023
Date of disclosure by the Bank
14/8/2023
Resettlement Action Plan/Framework/Others (specify: 3 ARP, 2 RPF and 2 SEP.
Was/were the document (s) disclosed prior to appraisal?
Yes
No
NA
Date of “in-country” disclosure by the borrower/client
14/8/2023
Date of receipt, by the Bank, of the authorisation to disclose
14/8/2023
Date of disclosure by the Bank
14/8/2023
Vulnerable Peoples Plan/Framework/Others (specify: NA.)
Was/were the document(s) disclosed prior to appraisal?
Yes
No
NA
Date of "in-country" disclosure by the borrower/client
[Date]
Date of receipt, by the Bank, of the authorisation to disclose
[Date]
Date of disclosure by the Bank
[Date]
If in-country disclosure of any of the above documents is not expected, please explain why: N/A
B.2 Compliance monitoring indicators
Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the
implementation of measures related to safeguard policies?
Yes
No
NA
Have costs related to environmental and social measures, including for the running of the grievance
redress mechanism, been included in the project cost?
Yes
No
NA
Is the total amount for the full resettlement of affected people, as integrated in the total project cost,
effectively been mobilised and secured?
Yes
No
NA
Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts
and measures related to safeguard policies?
Yes
No
NA
Have satisfactory implementation arrangements been agreed with the borrower and the same been
adequately reflected in the project legal documents?
Yes
No
NA
B.
Approbation
Is the project compliant to the Bank’s environmental and social safeguards requirements, and to be submitted to the Board?
Yes
No
Prepared by
Environmental Safeguards Specialist:
Social Safeguards Specialist:
Project Officer:
Name
Abdoul Ganyi BACHABI ALIDOU/Gratien BONI
Mohamed Fadel A. CHEIKH MOHAMED
FADEL/LAKPO Kossi Doumegno
Pierre DJAIGBE
Signature
Date
21/9/2023
21/9/2023
4/10/2023
Submitted by:
Sector Director:
Daniel SCHROTH
16/10/2023
Maman-Sani ISSA
5/11/2023
Approved by:
SNSC Director:
11
Note: This ESCON shall be appended to project appraisal reports/documents before Senior Management and/or Board approvals.
DI=Direct Investment; FI=Financial Intermediary; CL=Corporate Loan; BS=Budget Support; GU=Guarantee; RPA=Risk Purchase
Agreement; EF=Equity Financing; RBF=Results Based Financing.
12
25
Map of the Project Area
The serpentine line in blue-yellow-purple on the map below shows the project area. The project is divided into 3 lots, 2 of them in
Mauritania [Lot 1: Nouakchott-Kiffa (Blue) and Lot 3: Aioun-Néma (Purple)] and 1 mixed lot between Mauritania and Mali [Lot 2: KiffaTintane - Aioun-Yélimané-Khayes (Yellow)].
27
Schéma de l’infrastructure du projet
Diagram of Project Facilities
Poste de Nouakchott
Nouakchott substation
Centrale solaire de Kiffa
Kiffa solar power plant
Centrale solaire de Nema
Nema solar power plant
Poste de Aleg
Aleg substation
Poste de El Ghaira
El Ghaira substation
Poste de Kiffa
Kiffa substation
Poste de Tintane
Tintane substation
Poste de Aioun
Aioun substation
Poste de Aweinatt Zbil
Aweinatt Zbil substation
Sénégal
Senegal
Mali
Mali
Mauritanie
Mauritania
Centrale solaire de Yélimané
Yélimané solar power station
Poste de Yélimané
Yélimané substation
Réseau de distribution
Distribution network
Postes : 154.46 MEUR
Substations: EUR 154.46 million
Tronçons de ligne : 455.29 MEUR
Transmission line sections: EUR 455.29 million
Centrales solaires : 65 MEIR
Solar power stations: EUR 65 million
Réseau de distribution : 77 MEUR
Distribution network: EUR 77 million
Poste de Kayes
Kayes substation
184 km au Mali
184 km in Mali
1 189 km en Mauritanie
1 189 km in Mauritania
1 373 km pour le projet
1 373 km under the project
Linéaire ligne 225kV
Length of 225 kV line
28
BRIEF NOTE ON THE ELECTRICITY SUBSECTOR IN MAURITANIA
Mauritania is located in West Africa and covers a surface area of about 1 million square kilometres, most of which
is desert. With a population of around 4.9 million, 51% of them women, it is one of the least densely populated
countries in Africa (4 inhabitants/km2). The country’s urban population was estimated at 56% of the total
population in 2022.
The country’s economy has grown rapidly in recent years, rising from a 2.4% growth rate in 2021 to 5.2% in
2022. Growth is expected to slow to 4.5% in 2023, but to average 6.2% of GDP during the 2024-2025 period,
particularly with the commencement of gas production in 2024.
The strategic energy sector will play a key role in the country’s economic development. Mauritania has
considerable solar and wind energy potential, with an estimated production capacity of 457.9 GW of solar energy
and 47 GW of wind energy, which is still largely untapped (less than 0.1% of its potential is being tapped). Despite
the potential for renewable energy production, the energy subsector has weaknesses, including (i) a low access
rate of 47.3%, compared with an African average of 54% at the end of 2022, with a wide disparity between urban
(around 90%) and rural (less than 10%) areas; (ii) an installed generation capacity of 512 MW, dominated by
thermal generation (71%); and (iii) the low financial capacity of the national electricity utility company
(SOMELEC). Furthermore, the transmission network, comprising 225 kV and 90 kV lines, is not extensive and
the country has many isolated centres with a distribution network (comprising about 1 400 kilometres of 33 kV,
15 kV and 0.4 kV lines) that is relatively obsolete, making electricity supply unreliable. So far, Mauritania has
not been able to take full advantage of its share of the energy produced by the OMVS 13 hydropower plants
(Manantali, Gouina and Félou) due to the limited capacity of its transmission network, and the 100 MW wind
power plant built in the country a few years ago is underutilised for the same reasons of network saturation.
The Government of Mauritanian has undertaken institutional reforms in recent years to revitalise the sub-sector.
These include (i) the adoption of a new Electricity Code which enshrines private sector participation in power
generation; (ii) the ongoing drafting of a new energy policy document, including a Letter of Energy Sector
Development Policy and Action Plan; (iii) the ongoing design of a new energy strategy to include all new forms
of energy; and (iv) the in-depth restructuring of SOMELEC into three entities (responsible for generation and
transmission, distribution and marketing, and rural electrification) headed by a holding company. All these
reforms are expected to be completed in 2023.
Given the country’s considerable renewable energy production potential, it seeks not only to achieve universal
access by 2030, but also to become a new energy hub in West Africa by supplying electricity to the countries of
the sub-region and to position itself as a pioneer in the production of green hydrogen. The country’s objective is
reflected in the Nour Green Hydrogen Project which could become one of the largest green hydrogen production
projects in the world through the installation of wind and solar power plants covering an area of more than 8
square kilometres, with a production capacity of up to 10 GW. Mauritania has adopted a roadmap for controlled
energy transition and is committed to reducing its greenhouse gas (GHG) emissions by at least 92% by 2030
(compared to a no-action baseline) and to achieving a 60% share of renewable energy in its energy mix by 2030,
up from 29% in 2023.
Under the current project (PIEMM), around 1 400 kilometres of 225 kV transmission network will be built across
the country, making it possible not only to connect many localities that have never had access to electricity but
also to connect several existing and future renewable energy plants and to take possession of its entire share (94
MW) of the output of the OMVS community hydropower plants.
13
OMVS: Senegal River Basin Development Organization.
29
BRIEF NOTE ON THE ELECTRICITY SUBSECTOR IN MALI
Mali is a landlocked country in West Africa. With a surface area of 1 241 238 square kilometres and a
predominantly rural population of about 23 million, the country has a low population density (about 18
inhabitants/km2).
Despite the security crisis, the country’s economy recorded a GDP growth of about 3.1% in 2021, followed,
however, by a slowdown of approximately 1.8% in 2022.
The electricity sub-sector, which accounts for 1.91% of GDP, is a key factor in the country’s economic
development. Mali has a huge energy potential that remains largely untapped. The country is crossed by the Niger
and Senegal rivers and its identified hydropower potential is estimated at 1 150 MW, almost 70% of which is
untapped. The country’s solar power generation potential is estimated at 7 906 TWh/year, with very high levels
of solar radiation (5 to 7 kWh/m2/d) that is well distributed over the country. The country also has a wind energy
potential of 1 923 TWh/year. Despite this enormous potential, the country’s electricity sub-sector is still facing
many structural challenges, including14 (i) low generation capacity (780.7 MW) largely dominated by thermal
energy (79%), which exposes the sector and the country’s overall economy to volatile oil prices; (ii) a low
electricity access rate (53%), with wide disparities between urban (98%) and rural (27%) areas at end-2021; (iii)
an unsuitable regulatory framework that prevents the private sector from fully participating in renewable energy
development; and (iv) poor financial performance of the national electricity utility, EDM-SA, despite substantial
government subsidies.
As a result, power generation is insufficient to meet demand which is estimated to be increasing at around 10%
per year. The power transmission network, which consists of 1 640 kilometres of transmission lines of different
voltage levels (33 kV, 63 kV, 150 kV and 225 kV), is not enough to link production and consumer centres. The
distribution network (13 288 kilometres), which is obsolete, is one of the numerous causes of (i) load shedding,
and (ii) network losses of about 15%-20% in the country.
Aware of the importance of electricity to its economic development, the country launched several initiatives to
transform and make the subsector more efficient and resilient. To implement the measures required to revamp the
sub-sector, a five-year electricity sub-sector recovery plan was adopted in November 2019 and revised in April
2020. The initiatives include (i) putting the EDM-SA on a sustainable economic and financial trajectory; (ii)
transforming the energy mix in favour of renewable energy; and (iii) reducing generation costs by promoting
renewable energy sources and designing and implementing a low-cost production master plan (PDPMC). In
addition, the Government has begun to review the main instruments and documents (the National Energy Policy
and its related strategies and action plans, the Rural Electrification Reference Framework and the Institutional
Framework) governing the electricity sub-sector. The electricity sub-sector will be given a new impetus once the
review is completed.
Building on the Government’s political will and its substantial renewable energy potential, the country has
undertaken not only to achieve universal access by 2030 but also to reduce, as part of its NDC, greenhouse gas
emissions by 31% by 2030, compared to the current situation.
Under this project (PIEMM), about 200 kilometres of the 225 kV high voltage transmission network will be built
across the country, thus helping to strengthen regional interconnection with the OMVS network. The planned
investments will not only significantly improve the supply of electricity to major consumption centres, but also
enable several localities to be connected to the network.
14
Data from the 2021 and 2022 progress reports of the DNE and EDM-SA in Mali.
30
Justification of the Level of Counterpart Contribution – 225 kV Mauritania-Mali Power
Interconnection and Related Solar Power Plants Development Project (PIEMM)
The objective of the 225 kV Mauritania-Mali Electrical Interconnection and Related Solar Power Plants
Development Project (PIEMM) is to promote electricity trade between Mauritania and Mali and to increase solar
power generation capacity to improve access to modern, affordable, low-carbon electricity for the people of both
countries. The constant availability of quality electricity at an affordable cost will strengthen the resilience of
people in the beneficiary localities. PIEMM will enable rural households to access electricity, thereby facilitating
their access to education and health services and improving their living conditions through the creation of incomegenerating activities.
The total project cost, net of taxes and customs duties, is estimated at UA 667.38 million. The Mauritanian
Government’s counterpart contribution is UA 5.5 million, or 0.8% of the total project cost, below the 10%
minimum required by the Policy on Expenditure Eligible for Bank Group Financing for ADF countries. Thus, in
line with the provisions of Section 4.2.2 of the Policy on Expenditure Eligible for Bank Group Financing (revised
version of 19 March 2008), the level of the Government’s counterpart contribution was determined based on the
following three criteria: (i) the country’s commitment to implement its overall development programme; (ii)
financing allocated by the country to the sector targeted by Bank assistance; and (iii) the country’s budget situation
and debt level.
The energy sector constitutes a priority area in the country’s national strategy and the Government has
demonstrated a strong commitment towards financing the sector. However, it should be underscored that
the investment budget allocated to the energy sector, that is 9.8% of the consolidated investment budget
(CIB), is still too low to meet the target of SDG 7: “Ensure access to affordable, reliable, sustainable and
modern energy for all”. About 24% of the investment budget of the energy sector is financed through public
resources and 76% through external resources, mainly loans. In addition, Mauritania’s fiscal and debt
situation remains fragile. The deterioration of the economic situation and an external shock could lead to
an increase in debt and affect the Bank’s eligibility limits for operations and the mobilisation of counterpart
funds. Low resource mobilisation also affects the mobilisation of counterpart funds for project
implementation. Progress and monitoring reports on ongoing Bank-financed multinational projects in the
electricity sub-sector have revealed that the time taken to mobilise counterpart funds constitutes a
challenge to be addressed to improve the performance of these types of projects.
The Mauritanian Government’s counterpart contribution, which represents 0.8% of the total project cost,
is in line with the country financing parameters for Mauritania under the CSP 2023-2028, approved on 13
September 2023. Given its budgetary constraints and continuous fragile debt situation, the country financing
parameters for Mauritania under the CSP 2023-2028, approved on 13 September 2023, recommended that the
Bank should continue to focus on cost sharing, in particular through counterpart contributions and the co-financing
of individual projects, to encourage ownership by the Government. In keeping with the policy, the Bank should
be able to finance more than 90% of the total project costs up to a limit that does not exceed 100%, assessed and
justified on a case-by-case basis according to the following three criteria: (i) the country’s commitment to
implement its overall development programme; (ii) financing allocated by the country to the sector targeted by
Bank assistance; and (iii) the country’s budget situation and debt level.
Under ADF-16, Mauritania benefits from a minimum allocation of UA 27 million. The CSP 2023-208,
approved on 13 September 2023, recommends the mobilisation of resources from the regional envelope and
co-financing to reduce the burden of mobilising national counterpart funds, which are often difficult to
raise given the country’s fragile budget and debt situation. The ADF is the main project financier. Concerning
Mauritania, the project cost, net of taxes and duties, will be financed by an ADF loan of UA 2.7 million under the
performance-based allocation (PBA) and UA 200 million from the regional envelope. The Bank has also
mobilised a EUR 3 million grant from the Desert to Power Initiative Facility through the Green Climate Fund
(GCF). In addition, Mauritania will co-finance the project with the other TFPs, the French Development Agency
(UA 49.03 million), the European Investment Bank/European Union (UA 99.70 million) and other donors (UA
223.54 million).
The main reason for the Bank’s involvement in PIEMM financing is that its operation will provide access to highquality, affordable and low-carbon electricity to people of two of its regional member countries. Besides its
alignment with the aforementioned Bank policies and strategies, the project is a priority operation under the Desert
31
to Power (DtP) Initiative which is part of the national roadmaps approved by the two countries and the Bank in
2020, as part of the operationalization of the said initiative. The project will help to develop regional electricity
trade in the Sahel. It is perfectly in line with the main objective of the DtP Initiative of reducing the region’s
energy vulnerability by increasing the solar power generation capacity by at least 3 GW to provide electricity to
250 million people in the 11 countries covered by the DtP Initiative by 2030.
I.
The country’s commitment to implement its overall development programme
In 2016, the country adopted the Accelerated Growth and Shared Prosperity Strategy (SCAPP) 2016-2030
which aims to promote sustained and sustainable growth, develop human capital and strengthen governance in all
its dimensions. SCAPP is divided into three five-year action plans. The first five-year action plan covered the
period 2016-2020 and cost approximately USD 10.5 billion (MRU 405 billion).
Second Action Plan 2021-2025: SCAPP 2021-2025 Second Action Plan (PA2) focuses on three strategic levers:
(i) promoting strong, sustainable and inclusive growth; (ii) developing human capital and access to basic social
services; and (iii) enhancing governance in all its dimensions. The project portfolio comprises 282 projects for an
estimated budget of USD 13 billion (MRU 496 billion). As regards financing for the PA2 projects, it is estimated
that the public sector will contribute 61% and the private sector 39% (15 PPP projects).
The energy sector remains a priority for the country and under SCAPP through its Strategic Lever 1 “Promoting
strong, sustainable and inclusive growth”, Intervention 3.1 “Energy infrastructure” of Workstream 3 “Strengthen
infrastructure to support economic growth”.
The main challenges in the energy sector in Mauritania identified by SCAPP are: (i) to reduce the burden of the
energy sector on the State budget thanks to the growing involvement of the private sector; (ii) to widen access,
particularly in rural areas, to reliable and modern energy services; (iii) to diversify the energy mix by increasing,
in particular, the share of renewable energy; (iv) to guide the development of the sector with a view to an energy
transition in favour of the decarbonisation of industrial activities; and (v) to position the sector as an engine of
economic growth and an effective avenue for job creation.
To achieve the objectives of energy accessible to all, an engine of growth and job creation, and in line with the
transition to decarbonisation, the strategic guidelines proposed under the SCAPP Second Action Plan are: (i)
establishing a legal and regulatory framework conducive to the development of the electricity sub-sector, the
involvement of the private sector and the clarification of the role of actors, through the in-depth restructuring of
the sector; (ii) increasing the country’s electricity production capacity and improving the energy mix, while
promoting the production of electricity from domestic resources, namely gas, hydro, solar and wind power, and
hydrogen; (iii) strengthening electrification and network extension programmes, particularly in rural areas by
accelerating the implementation of the strategy to connect production zones to the electricity grid and to establish
a modern system for transmitting electricity to the main consumer centres; (iv) reducing electricity production
costs to support economic activity and households; (v) supporting the country’s energy transition by developing
the production and use of hydrogen so that it can become an economic growth, innovation and employment driver.
The Bank is committed to assisting the country in its efforts to develop the energy sector. The Bank’s
activities under Priority Area 2 of the CSP 2023-2028 for Mauritania “Strengthening infrastructure and
economic and financial governance to support the development of productive sectors” will contribute to (i)
improving access to affordable energy, and (ii) strengthening the network and production of renewable energy.
II.
Financing allocated by the country to the sector targeted by Bank assistance
The Government has demonstrated a strong commitment to financing the energy sector. To improve the
performance of the sector and make the country a regional renewable energy hub, the Mauritanian Government
has designed a very ambitious energy production plan and initiated institutional reforms, including (i) the adoption
of a new Electricity Code which enshrines private sector involvement in power generation; (ii) the ongoing
drafting of a new energy policy document, including a Letter of Energy Sector Development Policy and Action
Plan; (iii) the ongoing design of a new energy strategy to include all new forms of energy; and (iv) the restructuring
of SOMELEC into three entities (responsible for generation and transmission, distribution, and marketing and
rural electrification).
The consolidated investment budget (CIB) for 2023 is MRU 51.3 billion. About 9.8% of the CIB, or MRU
5.0 billion, is allocated to the energy sector. Approximately 24% of the investment budget (CIB) in the
energy sector is financed through public resources and 76% through external resources, mostly loans. However,
it should be underscored that the consolidated investment budget devoted to the energy sector is still too small to
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meet the target of SDG 7: “Ensure access to affordable, reliable, sustainable and modern energy for all”. Despite
the efforts made, the electricity access rate in Mauritania remains relatively low at 48%, with wide disparities
between urban and rural areas. In 2021, the total installed generation capacity in the country was 512 MW
(SOMELEC). This national generation capacity remains relatively low and is dominated by thermal generation
(fuel oil) which accounts for 71% of total energy produced. It is difficult for the national power utility company
(SOMELEC) to achieve financial equilibrium with such an energy mix structure, especially in a context of
administered prices where its activities are generally affected by rising global fossil fuel prices. SOMELEC’s
financial situation has been seriously affected in recent years by highly volatile fuel prices, due mainly to the
COVID-19 pandemic and recent global conflicts.
III.
The country’s budget situation and debt level
Mauritania’s budget and debt situation remains fragile. The deterioration of the economic situation and
an exogenous shock could lead to an increase in debt and affect the Bank’s eligibility limits for operations
and the mobilisation of counterpart funds. Before the invasion of Ukraine by Russia, the reforms initiated by
the Government helped to maintain a healthy fiscal position. Despite the negative impact of the COVID-19
pandemic, the budget balance showed a surplus of 2.2% of GDP in 2020 and 2021. However, the fiscal position
deteriorated significantly in 2022 due to an increase in subsidies and capital spending. The increase in
expenditure led to a budget deficit of 1.2% of GDP in 2022, the first since 2017. The increase in expenditure
is due not only to the Government’s investment programme but also to the special context created by the war in
Ukraine and the assumption that the energy subsidy granted to stabilise hydrocarbon prices would be paid. The
mobilisation of revenue to finance public investment projects in the energy sector remains a major
challenge for the country. Tax revenue represented 12.1% of GDP in 2022, down from 12.2% of GDP in 2021.
Weak resource mobilisation also affects the mobilisation of counterpart funds for project implementation.
The country has embarked on reforms to improve domestic resource mobilisation under the Public Finance
Management System Reform Master Plan.
Since 2014, Mauritania has been struggling with high debt levels. However, as part of its efforts to
strengthen debt sustainability, it has continued to negotiate with its bilateral creditors, concluding several
agreements over the past two years. As a result, the risk of the country sinking into debt distress has
diminished in recent years. The total public debt has dropped, from 56% of GDP in 2016 to 43.0% of GDP in
2022. The IMF’s Debt Sustainability Analysis (DSA 2022) indicated that the risk of external and overall debt
distress has shifted from high to moderate, due particularly to the debt restructuring agreement concluded with
Saudi Arabia.
The budget balance is projected to show a deficit of 1.9% of GDP in 2023 and 1.6% of GDP in 2024, due to rising
investment and current expenditure. Offshore gas development at Grand Tortue/Ahmeyim (GTA) is expected to
generate revenue estimated at 0.5% of GDP from 2024. Improving debt management remains a priority for the
country. Projections indicate that the risk of external and overall debt distress would remain “moderate”, with
external debt projected to average 43% of GDP during the 2023-2024 period.
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