MCC approves 2nd compact of $494m for the benefit of Burkina Faso’s electricity sector

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The 2nd compact from the MCC in Burkina Faso has been approved. With a budget of $ 494 million, it will, over five years, improve the national electricity sector by implementing reforms, increasing the availability of electricity and its access at affordable cost by the population.

The Millennium Challenge Corporation (MCC) Board of Directors has just approved the second Compact for Burkina Faso. With a budget of $ 494 million, the program will be implemented over a period of 5 years and will allow the development of the electricity sector. It will be funded up to $ 450 million by the MCC and $ 44 million by the government of Burkina Faso.

Its objective is to lower the cost of energy, improve the quality of the electricity supplied and facilitate its access by the populations. It will specifically support three projects, namely the Electricity Efficiency Enhancement Project (PREDEL), the Less Expensive Electricity Supply Project (PADOEL) and the Project network development and access to electricity (PRAEL).

The PREDEL aims to improve and strengthen the legal, regulatory and institutional framework of the electricity sector by investing in priority sector reforms and in strengthening the capacities of stakeholders. It will benefit from an envelope of $ 47 million from the MCC.

It will also devote $ 99.5 million to PADOEL to install new solar power plants with storage capacities and increase imports of electricity.

The PRAEL will benefit from an envelope of $ 210.6 million contributed by the American side. It will reduce load shedding and increase the availability and consumption of electricity by end users by improving the electricity transmission and distribution network. A section of the project will also be devoted to increasing access to electricity and productive uses of it.

$ 12 million will also be devoted to monitoring and evaluation of the program while $ 81 million will go towards the cost of administration and review of the program.

The MCC has laid down conditions of good governance for the implementation of the program. Among other things, he asked that all projects have an economic rate of return greater than or equal to 10%. The implementation of the compact will start in 2021.


Source: Agence Ecofin

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