- A total of US$ 7 million are now to be invested in the power sector of Djibouti, with the aim of diversifying electricity supply and increasing the access of underserved populations to electricity services. With more use of renewable energy sources, the government also hopes to improve stability of supply.
The ambitious government programme in the energy sector yesterday obtained a US$ 7 million credit from the World Bank on favourable conditions. The project is seen as a necessary investment in basic infrastructure for the small and poor country.
Djibouti is characterised by having neither fossil resources (oil and gas) nor hydroelectric potential. The country therefore currently has a strong dependency on imported oil products - mostly imported from nearby Saudi Arabia and Dubai - which leads to a high cost of energy.
These factors make access to modern energy particularly challenging, especially in rural areas and for the poor, according to the Djibouti government. Additionally, the power sector in Djibouti faces numerous and complex challenges many that are of structural and macro-economic nature, including the high wage bill, overstaffing and the high taxation on imported petroleum products.
Electricity access currently is almost non-existent in rural areas, with the exception of a few small towns and of some villages that financed their own generators. A large majority (99.5 percent) of the urban population that has access to electricity uses it as their primary source for lighting. Though expensive, kerosene is commonly used for the other domestic needs such as cooking.
Addressing this hindrance to growth, the government and the World Bank have launched the so-called "Power Access and Diversification Project". The project aims to increase the access of underserved populations to electricity services, through priority investments.
These investments are to increase reliability of electricity services through the development of alternative sources of production and targeted technical assistance. Further, they are to improve efficiency of the electricity utility through technical assistance.
Studies had shown that "Djibouti shows good potential for renewable energy development, especially in geothermal, solar and wind." While some feasibility projects have already been undertaken to various degrees of advancement, however no operational use of these renewable sources has been made possible to this day and no viable short-term application has yet been assessed or presented.
"Poverty studies have shown a strong correlation between electricity access and poverty in Djibouti. 43 percent of urban households do not have access to electricity, and 70 percent of these households are among the poor," said Anna Bjerde of the World Bank. "We hope that this project will serve as a catalyst for additional financing and development support," she added.
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