1. Souleymane OUEDRAOGO Economist and Statistical Engineer souleymane.ouedraogo@sonabel.bf Société Nationale d’Electricité du Burkina (SONABEL) Luanda, le 30/08/2015 18 th Congress of the Association of Power Utilities of Africa (APUA)

2. OUTLINE 1.INTRODUCTION 2.PRESENTATION OF ECOWAS 3.ELECTRICITY OFFER IN THE ECOWAS REGION 4.METHODOLOGY AND ASSUMPTIONS 5.TARIFF BENCHMARKING 6.MUTUALLY BENEFICIAL EXCHANGES 7.TARIFFS & PURCHASE POWER 8.CONCLUSION

3. INTRODUCTION  Power plays a key role in supporting economic growth and in improving households’ living conditions;  Electricity tariffs are a major economic policy instrument whose inadequacy can compromise the development of the power grid and heavily weigh on public finances (subsidy, emergency measures, etc.);  Access to power is influenced by tariff levels and people’s power purchase, two factors that could account for the low rate of electrification in the ECOWAS region (about 20 percent in 2006);  Appropriate solutions are to be found to allow the largest number of households possible to access power at the least cost.

4.  A grouping of 15 States founded in 1975 to promote economic integration;  A GDP per capita of USD 572 in 2011;  A population of 290 million (in 2008) and a target of 60 percent of access to power in 2015; PRESENTATION OF ECOWAS Mali Niger Nigeria Benin Togo Ghana Burkina Côte d’Ivoire Liberia Guinea Sierra Leone Guinea Bissau Gambia Cape Verde Senegal

5. ELECTRICITY OFFER IN THE ECOWAS REGION  Over 42.78 TWh generated in 2008 by oil-fuelled plants (24%), gas-fuelled plants (43%), biomass-fuelled plant (1%) and hydropower plants (32%);  90 percent of the power installed by 4 countries (Nigeria (59%), Ghana (16%), Côte d’Ivoire (9%) and Senegal (6%) for respective consumptions of 52%, 18%, 13% et 5%;  Some countries have a relatively significant and affordable power potential (hydropower, gas) they could harness to improve the energy situation in the ECOWAS region.

6. METHODOLOGY AND ASSUMPTIONS

7. Contract power/Energy consumed Scenarios LowMediumHigh Social LV (kW)0.200.501.00 (kWh)[5.8, 138.2][14.4, 345.6][28.8, 691.2] Single-phase LV (kW)2.004.0010.00 (kWh)[57.6, 1382.4][115.2 – 2764.8][288.0 – 6912.0] Three-phase LV (kW)7.0015,0020.00 (kWh)[201.6, 4838.4][432.0, 10368.0][576.0, 13824.0]  24 monthly consumptions per country for each class of clients and for each scenario, that is 216 typical categories in the 15 ECOWAS countries. Other methodologies: the benchmarking of electricity tariffs applied by power utilities is a complex and delicate exercise: Ex-post average cost (Eurostat); Static benchmarking (former UPDEA). Limitations of the review: Great diversity of tariff schedules; Exchange losses and gains against the US dollar.

8. TARIFF BENCHMARKING Social Tariff (Cents USD/kWh) – Power of 0.5kW Stat.Value (Cent USD) 20.33 12.41 20.16 25.05 12.63 41.51 11.78 58% A family consuming 100 kWh/month in Liberia would reduce their bill by USD 40 with the Nigerian schedule!

9. TARIFF BENCHMARKING Stat.Value (Cent USD) 22,22 13,61 23,44 26,45 12,85 42,11 11,51 52% A family consuming 1000 kWh/month in Cape-Verde would reduce their bill by USD 418 with the Guinea schedule! Tariff for single-phase LV current (Cents USD/kWh) – Power of 4kW

10. TARIFF BENCHMARKING Stat.Value (Cent USD) 23.01 13.32 24.0 28.79 15.47 42.41 11.48 50% A family consuming 2000 kWh/month in Cape Verde would reduce their bill by USD 430 with the Guinea schedule! Three-phase LV current (Cents USD/kWh) – Power of 15kW

11. MUTUALLY BENEFICIAL EXCHANGES  Power exchanges between ECOWAS countries are mutually beneficial (savings for some countries and gains for others): o Savings for Benin, Burkina Faso, Cape Verde, The Gambia, Guinea Bissau, Liberia, Mali, Senegal, Sierra Leone and Togo; o Gains for Côte d’Ivoire, Ghana, Guinea and Nigeria.

12. TARIFFS & PURCHASE POWER Real GDP per capita in 2011 (in USD, at the 2000 price, calculated based on the exchange rate for 2000) Source: IMF Some countries have higher tariffs but if households do have a substantial purchase power, they will be able to afford better services than their counterparts in countries with low tariffs but a lower purchase power. Income Tariffs HIGH (> Tarif CEDEAO)LOW (< CEDEAO Tariff) HIGH (> 400 USD)Cape Verde, Senegal, GambieNigeria, Ghana, Côte d’Ivoire LOW (<400 USD) Liberia, Togo, Sierra Leone, Guinea Bissau, Mali, Burkina, Bénin Niger, Guinea

13. TARIFFS & PURCHASE POWER COUNTRIES THREE-PHASESINGLE PHASESOCIAL With exchange Without exchange With exchange Without exchange With exchange Without exchange Guinea 0.98% 0.85%0.96%0.21% Nigeria 0.98%1.36%0.85% 0.21%0.83% Ghana 1.16%1.59%1.14%1.77%1.37%2.00% Côte d'Ivoire 1.59%2.22%1.77%2.25%2.00%2.21% Cape Verde 2.22%2.31%2.25%2.31%1.06%1.37% ECOWAS 3.96% 3.90% 3.62% Senegal 4.17% 4.18%4.44%3.89%4.23% Gambie 4.42%5.59%4.35%5.33%4.04%4.90% Bénin 6.30%6.49%6.19%6.56%5.75%6.35% Burkina 7.05%7.55%6.92%7.20%6.43%7.74% Niger 7.59%7.91%7.46%7.96%8.27% Serra Leone 7.96%8.69%7.82%8.59%7.04% Mali 8.10%9.13%7.96%8.75%6.93%8.57% Guinea Bissau 9.69%10.19%9.53%10.02%7.27%7.61% Togo 7.91%10.41%7.96%10.22%8.27%10.20% Liberia 14.83%27.45%14.57%27.45%13.54%27.45%

14. CONCLUSION  Domestic electricity tariffs proposed in the ECOWAS region strongly vary across States and provide the community countries a genuine opportunity to develop a regional market for mutually beneficial energy exchanges;  Countries such as Guinea, Nigeria, Ghana and Côte d’Ivoire are genuine energy reservoirs for the subregion and will considerably benefit by interconnections in improving the profitability of investments;  Also, countries such as Benin, Burkina, Cape Verde, The Gambia, Guinea Bissau, Liberia, Mali, Senegal, Sierra Leone and Togo will offer lower tariffs to the consumers by getting cheaper supplies from reservoir countries;  Ensuring interconnections and developing community facilities building on the comparative advantages of countries are necessary for ECOWAS.

15. THANK YOU FOR YOUR ATTENTION