Relies on fuel wood and charcoal, and imported petroleum to meet its energy needs.
Somalia’s economy is growing and needs affordable energy to continue developing. The National energy deficit in the country is considerable proving an opportunity for potential investment. As a priority enabling sector, investments to offer competitive energy prices and alternatives to current energy sources (generators, charcoal) will prove profitable for both investors and government.
According to AfDB’s assessment, the energy mix is dominated by charcoal and firewood; meeting nearly 80 to 90% of the energy needs of the whole country and undermining manufacturing and forest sustainability. Renewable energy sources are a viable and immediate way to increase affordable energy for Somalis.
Investments in renewable energy are multiplying in Africa as the costs of renewable technologies decrease. Somalia has one of the highest potentials for onshore wind power in Africa and one of the highest rates of daily total solar radiation in the world. The cost of renewable energy options are decreasing and are now often less expensive than diesel options.
Overall, the total installed and operational generating capacity in Somalia is estimated to be 80 to 85 MW and an estimated 250,000 connections. Drops in voltage are frequent and supply is limited to 5 to 6 hours per day.
The low tension (480/220 V) over sometimes long distances leads to tension and technical losses with most small generators reporting 40% to 50% power loss.
Renewable energy potential is abundant. The solar energy potential ranges from 5 to 7 kWh/m2/day with over 310 sunny days in a year or 3,000 hours of sunshine per annum. Somalia is also characterized by strong wind regimes with annual average speeds of 1.5 to 11.4 m/s with potential for small hydro power (around 100 to120 MW) along the Shebelle and Juba rivers.
A number of Public Private Partnership (PPP) agreements are in place, using Power Purchase Agreements (PPA). There is huge investment demand in electricity generation, transmission and distribution across major cities and towns in Somalia so that manufacturing can once again thrive and cost of doing business generally gets lowered.
Grid-scale renewable energy projects, as well as off grid and microgrid installations using renewable energy sources such as solar PV and Solar Home Systems are becoming increasingly prominent in Somalia markets. The cost of technology has come down substantially.
Investment Opportunities in Energy:
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