Senegal to Benefit from Five-Year US $ 550 Million Dollar Subsidy Program to Strengthen Power Sector in a Context of Electricity Access as a Bottleneck for Economic Activity .
The board of directors of the American development agency Millenium Challenge Corporation approved a grant program of 550 millions of dollars (480 million), over a period of five years, in favor of Senegal. This donation is intended to "strengthen the electricity sector to meet the growing demand for reliable electricity in one of Africa's fastest growing economies. an important strategic partner of the United States in West Africa ", Says a statement.
Concluded with the Senegalese government, this agreement, the Senegal Power Compact, "will support three projects aimed at to improve the electricity transmission network in the capital city of Dakar and its environs, to increase access to electricity in the agricultural areas of the southern and central regions and to improve the overall governance of the sector ". The plan also aims to strengthen the participation of the private sector in power generation and distribution, and to ensure that the country makes the most of current and future investments.
Senegalese contribution of 50 millions of dollars
Senegal will contribute up to 50 million euros to this plan, bringing the total program to 600 million. If the Senegalese economy has grown by 7,2% in 2017, access to electricity is a major bottleneck for economic activity. Only 64,5% of the Senegalese population had a connection to the 2016 power grid.
An AfDB report estimates that in the short term, an increase in 1% of access to electricity increases total factor productivity by 12%. Getting a new electrical connection for a business in Senegal requires six procedures, takes 75 days, and costs around 3 400% average revenue, according to the latest Doing Business report.
The Millennium Challenge Corporation is a development agency created by George Bush in 2004, whose goal is to reduce global poverty through economic growth. It provides programs of assistance to poor countries, "which meet stringent rules of good governance, ranging from the fight against corruption to respect for democracy." These countries must also commit to economic policies that "encourage economic freedom".
Senegal had signed a first five-year 540 million dollar deal with Millenium Challenge Corporation in 2009. This grant was intended to improve agricultural productivity and increase market access by investing in road infrastructure and irrigation networks.
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