The U.S. Government’s Millennium Challenge Corporation (MCC) Board of Directors has approved the new five-year $550 million Senegal Power Compact designed to increase reliability and access to electricity, support economic growth and reduce poverty.
The Government of Senegal will contribute an additional $50 million to the compact to drive economic growth and progress, bringing the total program to $600 million.
MCC and the Government of Senegal developed the compact to strengthen the power sector to meet the growing demand for reliable electricity in one of Africa’s fastest growing economies, and an important strategic partner of the U.S. in West Africa.
“I am pleased to announce the MCC Board of Directors’ approval of the Senegal Power Compact,” MCC Chief Operating Officer and Head of Agency Jonathan Nash said. “MCC is proud to partner with Senegal to tackle the country’s greatest economic challenges. This compact is designed to catalyze private sector investment, spur economic growth and reduce poverty by improving Senegal’s power sector, reducing costs and expanding access to electricity for residents and businesses.”
Pending congressional notification, MCC’s Senegal Power Compact is expected to be signed in the coming weeks.
The Senegal Power Compact consists of three projects:
The Modernizing and Strengthening of Senelec Transmission Network Project aims to strengthen and increase the reliability of Senegal’s high-voltage transmission network in and around Dakar, the country’s capital, and improve service delivery throughout the country.
The compact supports the utility, Senelec, in reducing high production costs, facilitating private sector investment in generation, and increasing the reliability of electricity for consumers.
The Increasing Access to Electricity in Rural and Peri-Urban Areas Project seeks to reinforce the electrical grid in urban areas and extend the grid in selected rural and peri-urban areas in Senegal’s south and center regions, which have high economic potential but low connection rates.
The Power Sector Enabling Environment and Capacity Development Project will work to strengthen laws, policies and regulations governing the power sector as well as the institutions responsible for implementing them.
The Government of Senegal established a project management unit to work with MCC on the development of the compact, the Unite de Formulation et de Coordination du Second Programme MCA-Senegal (UFC).
During the compact development process, MCC and UFC jointly identified Senegal’s greatest barriers to economic growth and developed a program specifically aimed at addressing them.
Coordinated analyses helped to determine compact activities most likely to contribute to sustainable economic growth that reduces poverty. Compact development has included a consultative process, engaging civil society, other government agencies, and the private sector.