The development of Senegal’s energy sector is at the heart of the country’s strategy for sustainable and economic development and aspiration to become an emerging economy by 2035 under the Plan Sénégal Émergent (PSE). With strong institutions and a clearly articulated vision to pursue sustainable development goals, Senegal is well positioned to fulfil these ambitions and continue its pathway towards economic growth and development.

Since the launch of the PSE, Senegal has adopted reforms designed to attract foreign direct investment (FDI) and encourage higher levels of private sector participation, leveraging significant support by the development finance institutions (DFIs), such as the Scaling Solar Programme of the World Bank. The stability of the country’s institutions has enabled the energy sector to attract FDI for its development, although more would be needed to meet Senegal’s ambitions. In order to achieve universal access to modern energy, to spur industrialisation and consolidate a low-carbon, resilient and sustainable energy system, Senegal has recently joined the ranks of countries (South Africa, Indonesia, Viet Nam) having entered a Just Energy Transition Partnership (JETP). Signed with partners from France, Germany, the European Union, the United Kingdom and Canada, the JETP agrees to mobilise up to EUR 2.5 billion over a three to five year-period to support Senegal in achieving its ambitions.

Senegal is a strong supporter of the UNFCCC Conference of the Parties (COP) process, with a focus mostly on developing clean power, reducing methane emissions, enabling climate resilience and just and implementing equitable energy transitions, notably for developing economies. It chaired the group of climate negotiators from the least developed countries (LDCs), and is a strong advocate for increased mobilisation of climate finance. In 2020, the government presented a comprehensive and ambitious Nationally Determined Contribution (NDC) which contains concrete clean energy targets for the coming decade, including for renewables, energy efficiency and clean energy technology deployment. In 2023, Senegal has already met the unconditional renewable targets under the NDC. The government is working on a long-term low-carbon development strategy with international partners.

Over the past four years, the government’s energy strategy, the Lettre de politique de développement du secteur énergétique (LPDSE 2019-2023) has focused on securing low‑cost energy supply, access to more reliable, sustainable and lower cost electricity, access to modern cooking fuels and stronger rules for financing, governance and regulation in the sector.

The IEA energy policy review comes at a time when Senegal is taking stock of progress made within the framework of its LPDSE 2019-2023 and designing the energy strategy for the next five years. A new LPDSE is under preparation for 2024-2028 with a consultation launched in July 2023.

The IEA confirms that Senegal has taken significant steps towards its objectives. In 2022, 75% of Senegal’s population had access to electricity (urban 97%, rural 55%)1, one of the highest rates in sub-Saharan Africa (SSA). In 2022, almost 30% (5 million) of the population had access to clean cooking fuels and equipment, although this was mostly in urban areas, where over 50% have access and where LPG (liquefied petroleum gas) is primarily used, while only 7% had access in rural settlements.

Due to strong demographic growth, the number of people still relying on traditional biomass for cooking has increased faster than the total population, doubling from 6.5 million in 2000 to 12.5 million today. To cope with these demographic trends, it will be critical in the next LPDSE to prioritise clean cooking programmes overall and electricity access in rural areas, in particular. Noteworthy experience for Senegal comes from success stories from Indonesia and India in Asia and in Africa, from South Africa, Nigeria, Sudan, and Kenya, where new clean cooking strategies have been implemented over the past five years. The significant progress in providing clean cooking in these countries has largely been driven by the adoption of LPG.

The power sector is the key enabler for Senegal’s sustainable development. The country’s electricity mix is dominated by heavy fuel oil (HFO), which accounted for 70%2 of total electricity generation in 2022. In recent years, renewable energy has overtaken coal, with wind and solar power accounting for 21% of generation in 2022. Senegal already has 0.4 GW of total renewable energy installed capacity and has recently pledged to increase the share to 40% by 2030 within the framework of the JETP, whose funding to be mobilised can be a key enabler for Senegal to also meet its conditional targets under the NDC. The JETP also recognised the importance of Senegal’s gas production opportunities and the role of gas in the country’s economic development and energy transition.

Senegal is currently working on a ten-year Integrated Low-Cost Plan (Plan Intégré à Moindre Coût PIMC). The government has already set out a gas-to-power strategy to switch from HFO to natural gas use in power generation. The retirement of old HFO plants would significantly reduce the cost of electricity and the country’s energy-related emissions. Since most of the HFO is imported today, this switch will also reduce the import bill and increase energy security.

A comprehensive clean power strategy is needed to synchronise the closure of the oldest HFO plants with the construction of gas-fired power plants to support power system flexibility, while adding renewable energy to the system. This strategy should be based on the outcome of the PIMC, using international best practices. Senegal’s power sector transition needs a clear strategy, which includes the full implementation of the power sector reforms, the expansion of the electricity network, the creation of renewable energy zones and auctions, as well as increased balancing power at the domestic and regional levels within the West African Power Pool. Such a strategy will be critical to provide a long-term policy signal to investors.

While public finance will continue to play an important role, Senegal’s energy sector will also need to mobilise more private sector investment. Access to finance for renewable projects is available, mostly from international banks and development finance institutions (DFI). Gas-related projects are currently more difficult to finance, since most DFIs no longer support such projects and commercial investors may not find attractive risk-adjusted returns for regulated assets like pipeline gas.

The natural resource sector is at the heart of Senegal’s development strategy. The country is set to become an oil and gas producer in 2024, leveraging its significant offshore reserves. In 2020, the African continent for nearly 3% of cumulative global emissions, with Senegal representing only 0.03% of global energy-related emissions. IEA analysis has shown that the impact on global emissions from development of natural gas resources on the continent would be negligible and only raise cumulative emissions to 3.5% by 2030.

At the COP26 in Glasgow, Senegal joined the Global Methane Pledge to act on methane emissions. The Petroleum Code requires companies to take necessary measures to prevent and combat environmental pollution, in accordance with international industry practice and applicable national legislation. The development of a National Methane Roadmap is envisaged, with the support of the Climate and Clean Air Coalition. Reducing operational emissions from oil and gas production is a cost-effective measure. It will not only increase government revenues, but support ambitions to use gas to boost domestic energy access and reduce health and environmental impacts on local communities.

To ensure the distribution of revenues from the development of these resources, the government has set up a Stabilisation Fund and an Intergenerational Fund. The funds will enable Senegal to leverage hydrocarbon revenues to finance sustainable economic growth, mitigate the impact of international price volatility on the Senegal’s State Budget and prepare for a low-carbon and resilient energy system.

Energy efficiency is a critical topic for a country that highly values energy access and is making great progress in achieving universal access to electricity. Strong policies fostering energy efficiency can contribute to important savings, which are particularly relevant for the segments of the population that face affordability issues. Given the country’s current energy mix, efficiency can also critically contribute to lower greenhouse gas emissions, which is why the Government of Senegal included energy efficiency ambitions in the NDC of 2020.

Progress has been achieved thanks to Senegal’s energy efficiency agency AEME, which was set up in 2011. AEME’s strategy identified important savings potential in hydrocarbons, electricity and domestic fuel sectors (18%, 36% and 40%, respectively). It develops and implements several programmes and actions, including sensitisation campaigns to incentivise the population to adopt energy-efficient measures. To fully implement the work underway and achieve greater savings results, the government needs to bolster the financial and human resources of AEME and create a strong governance to support synergies across the energy agencies.

One positive step is the establishment of a super ESCO with FONSIS and AEME, building on the results of the World Bank study on strategies for financing energy efficiency in the public sector (lighting, universities, hospitals). Using economies of scale, Senegal will be able to improve the efficiency in the residential and services sectors, which have seen a decline in energy efficiency improvements in the past decade. The Ecofridges programme is another leading example of how the public sector can support upgrades in domestic appliances and equipment. However, the current loan programme only offers support to the households that can afford to do so. Most of the vulnerable consumers would benefit from a grant programme. Work on implementing existing and strengthening energy efficiency standards under the UEMOA Directives should be prioritised.

Energy efficiency also includes efficiency of fossil fuel subsidies. In the future, domestic oil and gas prices are expected to decrease with the start-up of oil and gas production. The design of the Stabilisation Fund is important in this context to avoid overcompensation (subsidising all citizens rather than the vulnerable ones) and driving up government debt during very high oil prices. Senegal needs to carefully manage its exposure to today’s high oil price volatility by reducing fossil fuel subsidies and focusing on risk management. In 2022, Senegal spent almost 4% of its gross domestic product (GDP) on energy subsidies. The government pledge to reduce this share to 1% by 2025 is a major and welcome reform commitment. The roadmap in place guides the implementation in the coming years.

The IEA applauds Senegal’s energy policy approach and the active work and plan under way. As input to the LPDSE 2024-2028, the IEA offers a few key actionable recommendations. First, the government needs to prioritise actions to complete universal access to energy, support system integration of higher shares of variable renewables through a clean power strategy and the development of a natural gas market and related infrastructure. The governance of the agencies entrusted with the energy sector implementation and their funding is going to be an important lever to complete the reforms and create more efficiency and synergies.

For the LDPSE 2024-2028 the government of Senegal should focus on actions to:

Strategy

• Close the gap and achieve universal access to electricity through better co-ordination of players, focusing on the last mile and enhancing the quality of supply. Prioritise the roll-out of clean cooking programmes, using LPG and renewables technologies and fuels to make faster progress.
• Accelerate renewable development for a more low-emission, affordable and reliable supply and design a power sector strategy for the substitution of heavy fuel oil in electricity production based on integrated system planning, investment in gas peaking plants and a high degree of collaboration among all electricity sector stakeholders.
• Ensure the effective application of the new electricity and gas codes with a view to promoting investment in the energy sector, particularly in renewable energies.
• Intensify efforts to attract a diversified set of financial resources, working with donors and the private sector, by developing a plan for long-term energy investments. As part of the plan, quantify investment in the necessary oil and gas infrastructure that is adequate to underpin the country’s development and supports the greater penetration of renewable energy across the energy sector.

Institutional framework

• Ensure better co-ordination of the actions taken in the energy sector by the various stakeholders around the MEP.
• Bring together the agencies responsible for energy management and renewable energies and possibly the rural electrification agency within a single agency, with a view to strengthening the synergy of their actions, pooling their means of intervention and increasing their impact, particularly in rural areas.

Regional co-operation

• Intensify regional co-operation, particularly in the field of electricity grid interconnections, energy efficiency and renewable energy standards, strategies for access to electricity and clean cooking technologies.
• Scale up energy efficiency programmes that have been successful in the appliances/lighting/cooling sectors and can be leveraged in industry and transport sectors.
• Develop and implement Minimum Energy Performance Standards (MEPS) for appliances that are aligned with major exporting countries, drawing on examples of standards and labelling programmes in Ghana and other countries in the subregion.

Training, skills and employment

• Continue and strengthen the energy data collection and use and the national training and skills development effort, particularly at the level of technicians and engineers, in the field of renewable energies and energy efficiency.