Somalia opens bids for solar-battery project

From the newsletter

The Somali government has launched a tender for a 12 MW solar photovoltaic (PV) and 36 MWh battery energy storage system (BESS) project in the port city of Berbera. This utility-scale project includes the construction of 13.5 km of 33 kV transmission lines to evacuate the electricity generated to the grid.

• The Somali government has issued two tenders in the last two months. In February, it invited bids for a 55 MW solar and 160 MWh BESS project, with applications running until April 14. It also issued another tender for a 10 MW solar and 20 MWh battery storage system that closed applications in February.

• Somalia has an installed capacity of 300 MW, and only roughly half the population has access to electricity. It plans to increase its installed capacity based on projected demand, which is set to reach 4,600 MW by 2037.

More details

• The initiative is part of the Somali Electricity Sector Recovery Project, which is funded by the World Bank. The project construction timeline is set at 15 months, and interested parties must submit applications by May 5, 2025. The selected contractor will oversee the design, procurement, installation, testing, and commissioning of the facility.

• Somalia's electricity network is old and inefficient and loses 30% of the electricity generated. The country plans to invest in upgrading its infrastructure network to strengthen the current transmission and distribution networks. An estimated $3 billion would be needed throughout the supply chain in the next two decades.

• The government has made progress in adopting renewables. According to data from the International Renewable Energy Agency (IRENA), the country had an installed capacity of 51 MW in 2023, an almost tenfold increase from 2018. 

• The Somali electricity market is mainly controlled through private generation, which contributes about 128 MW and distributes electricity through microgrids. There is no national power grid. This has created a lack of standardisation in the quality of electricity. The government introduced the National Electricity Act 2023, which aims to improve the market by setting standards, streamlining market operations to attract private investment and developing rural electrification programs to bridge the gap between urban and rural communities.

• Somalia's location along the equator positions it to receive longer hours of sun, over 8 hours per day, and its coastline receives good winds of over 7 m/s. Studies suggest Somalia has high potential for onshore wind power and could generate between 30,000 and 45,000 MW.

• The country has shown great success in adopting technologies. It has one of the highest mobile phone adoption rates in Africa and also ranks fourth in Africa's mobile data pricing index. The recent movements in solar energy—three tenders in three months—show how fast the sector is growing and could follow the same trend as mobile technology.

Our take

• Somalia's approach of adopting solar with battery storage is the best strategy to address the intermittency of solar. Given that it doesn't have a national-level grid, this serves best to ensure customers get continuous power supply and reduce reliance on costly diesel generators.

• The grid losses faced by energy companies demand an immediate investment for infrastructure upgrades. The $3 billion required is significant for a government with a GDP of just $11 billion. However, Somalia has allies, particularly the rich Arab nations, who can bankroll large projects, and it can count on them and the private sector for this.

• But the government needs to move fast to create a stable and regulatory environment that can attract private capital. The government and the World Bank can partner to provide de-risking mechanisms to encourage more private sector investment.