Macroeconomic performance⁸

Real GDP growth was an estimated 5.2% in 2018, up from 4.9% in 2017, reflecting stronger performance of the agricultural sector. On the demand side, final consumption grew by 4.5% in 2018, and investment, by 11.7% (compared with 2.4% in 2017). The GDP structure remains relatively stable, with agriculture dominating (43.4% of GDP in 2018), followed by services (35%), and industry (14.9%). Despite public finance consolidation, the fiscal deficit stood at an estimated 5.9% of GDP in 2018. Consumer price index inflation was an estimated 4.2% in 2018, reflecting an expansion in credit and money supply in the context of a contraction in net foreign assets. The economic outlook is favorable, with real GDP growth projected at 5.3% in 2019 and 5.7% in 2020. Economic activity should continue to benefit from strong performance in the agricultural sector, underpinned by the expansion of irrigated land and the development of mini-dams. The 2017–2020 Economic and Social Development Plan provides for numerous infrastructure projects, notably the Cotonou–Niamey–Ouagadougou–Abidjan rail loop, a pipeline for exporting crude oil, the Salkadamna power project, and the Kandadji combined hydro and irrigation dam. Recovery in Nigeria should also be profitable for Niger. The effectiveness of these prospects is also subject to risks related to climate shocks, a decline in the export price of crude oil, possible delays in the pipeline construction project, and the terrorist threat in the Sahel.

⁸Source: African Economic Outlook, 2019, African Development Bank. Accessible here: https://www.afdb.org/en/knowledge/publications/african-economic-outlook/

Business environment and private sector development⁹

Niger’s economy has been traditionally largely based on subsistence crops and livestock. Niger is at the same time a land of opportunities with various assets: Niger has vast land areas suitable for the development of more intensive agro- and pastoral-business. Niger’s basement is rich in mineral resources as uranium, oil and gas, gold, iron, phosphates, coal, limestone, gypsum, cassiterite, etc. This requires a significant diversification of the economy with the development of a national and international dynamic private sector within clear and favourable regulatory and institutional framework. Niger is today a changing country and offers significant opportunities to both consultants and service providers, contractors and suppliers as well as investors. Such a development contributes getting young people into the labour market and to overall wealth and stability. Niger has undertaken major reforms to provide an attractive institutional, tax and legal framework for investments and to improve business climate. Among the provisions and measures taken, following can be highlighted:

1. The Investment Code has been revised to stimulate investments and job creation by providing tax benefits for investors as well as several other benefits including among others:

• Facilities for the acquisition of the right to exercise and property,
• Possibility of using the International Centre for the Settlement of Investment Disputes (ICSID),
• Unlimited opportunities to transfer profits and revenues,
• Speedy approval procedures:

2. The One-Stop Shop for business start-ups which has made it possible to combine in one place all forms of business creation services. This made it possible to reduce all formalities for starting a business to 3 days. Among other initiatives to promote development of formal business activities, the minimum capital for the creation of a limited liability company has also been reduced from 1.000.000 CFA Francs to 100.000 CFA francs.
3. The Mining Code and the Oil and Gas Code defines simplified procedures for granting prospecting, research and exploitation permits and which provide specific advantages to investors, including the tax conditions as well as the right to export the production as well as the free transfer of funds.
4. The Public Procurement Code which grant access to public tenders and establish clear and transparent procedures for awarding public contracts
5. The law governing public-private partnerships (PPP), which enables the country to benefit from an attractive framework for the funding of large-scale projects in the infrastructure, agricultural and social housing sectors. A support Unit for the Public and Private Partnerships (Cellule d’Appui au PPP: CAPPP) has been established at the Prime Minister’s Office. As well as Special Commission for PPP Contracts.
6. The Reviewed Code of Labour provides several benefits to investors including freedom of employment and easy access to work visas for foreigners.
7. The National Customs Code which offers several advantages to both national and foreign investors through a range of economic, suspensive and special regimes.
8. Institutional measures:

• Establishment of the High Council for Investment in Niger (Conseil National des Investisseurs Privés: CNIP) as a framework for dialogue between the State and national and foreign investors to improve the business environment and promote investments.
• The creation of a Permanent Consultative Committee (Conseil Consultatif Permanent: CCP) between the Ministry of Trade and Promotion of the Private Sector and the Niger Chamber of Commerce and Industry to find solutions to the concerns of economic operators.
• The creation of the Mediation and Arbitration Centre in Niamey (Centre de Médiation et d’Arbitrage du Niger: CMAN) offering simple and fast alternative to commercial disputes.
• The creation of the Niger Commercial Court in Niamey, which will speed up the treatment of commercial disputes

⁹https://niger.dk/business-and-investment-opportunities/

Key takeaways on the electricity sector

Electricity Access¹⁰

Electricity demand in Niger grew faster (16%) than the GDP growth (average 4%) over the period 2001–2015. This very high growth rates for electricity demand is partially explained by the high rate of population growth and low baseline. The table below reports on the electricity installed generation capacity and the electricity supply and use as well as access rate.¹¹:

Table 1¹² - Electricity Access

Table 2¹³ - Power indicators, benchmarked against select country groups

Tariffs¹⁴

Table 3:Tariffs¹⁴

Installed capacity¹⁵

In 2018 the total installed capacity was 421.93MW. This consisted of 358.33 MW made of 358.33MW of thermal power plants, 7MW of Solar (Solar plant Malbaza) and 4MW of standalone, mini-grids (include households, community installations, telecom towers, etc).

Production¹⁶

Electricity production shows reliance on thermal energy. In Niger, the electricity is mainly generated from fossil fuel (coal) and covers only a small part of the country's energy consumption. The electricity sector is characterized by:
(i) a low rate of access nationwide (about 12%);
(ii) a disparity in access rates between urban areas (where around 70% of the population have access) and rural areas (where less than 5% of the population have access whilst 80% of the population lives in rural areas);
(iii) outdated and saturated transport and distribution network causing a low quality of service and resulting in significant technical losses and high volume of undistributed energy;
(iv) fragmented grid composed of six unconnected systems which does not allow to efficiently manage the available capacity.
(v) Key players capacity issues to plan and implement complex electrification programs.
(vi) growing demand from population and SMEs / SMIs for quality electrical services: on average, 100% of electricity is produced by thermal power plants.

Table 4 - Breakdown of Energy supply and use and type of technology, in GWh¹⁷

Table 5 - Detailed breakdown of electricity generation capacity in MW per site¹⁸

Production costs¹⁹

NIGELEC’s cost of production per kilowatt-hour is among the highest in West Africa on average, it costs $0.16 to produce power in Niger, of which only $0.06 is attributable to generation (NIGELEC 2009). The generation cost is composed of the cost of power that is imported from Nigeria (around 87 percent of all power produced, at $0.03 per kWh), power produced using diesel (around 8 percent of all power produced, at an astronomical $0.30 per kWh), and power supplied domestically from SONICHAR (around 4.3 percent of all power produced, at $0.12 per kWh). The other non-generation costs, at $0.10, can be attributed to expenditures related to labor and new investments in transmission, among others. The high costs of domestic thermal power are related to high diesel prices. As noted, domestically generated power is particularly expensive, at $0.30 per kWh. Between 2004 and 2008, prices of diesel in Niger were high relative to some of its neighbors, ranging from $0.94 to $1.11 per liter.

Maintenance

[To be completed]

Table 6 - Downtime and efficiency

[To be completed]

Tariffs²⁰

At $0.17 per kilowatt-hour (kWh), Niger’s consumers pay approximately $0.07 more for power than the average African country that derives its power from thermal-based resources. With this level of tariff, NIGELEC’s revenues were enough to recover costs of production in 2009. Thus, at 100 percent cost recovery, NIGELEC performs better than utilities in other low- and middle-income countries.

¹⁰African Development Bank report - Desert to Power Implementation Strategy for Niger
¹²African Development Bank report - Desert to Power Implementation Strategy for Niger
¹³Niger’s Infrastructure: A Continental Perspective - 2011 The International Bank for Reconstruction and Development / The World Bank
¹⁴Niger’s Infrastructure: A Continental Perspective - 2011 The International Bank for Reconstruction and Development / The World Bank
¹⁵African Development Bank report - Desert to Power Implementation Strategy for Niger
¹⁶African Development Bank report - Desert to Power Implementation Strategy for Niger
¹⁷African Development Bank report - Desert to Power Implementation Strategy for Niger
¹⁸African Development Bank report - Desert to Power Implementation Strategy for Niger
¹⁹Niger’s Infrastructure: A Continental Perspective - 2011 The International Bank for Reconstruction and Development / The World Bank
²⁰Niger’s Infrastructure: A Continental Perspective - 2011 The International Bank for Reconstruction and Development / The World Bank

Country strategy on the environment and climate change

Policy, planning and budgeting²⁵

The long-term goals informing Niger´s adaptation efforts are outlined in the country´s Nationally Determined Contribution (NDC), submitted in 2016, as shown in the table overleaf. These goals are reflected in existing national frameworks, strategies and plans including: Sustainable Development and Inclusive Growth Strategy or ‘2035 Vision”: Adopted in 2016, it lays out a medium-term development strategy for Niger. Nigeriens Nourish the Nigerian Initiative: Launched in 2011 and adopted in 2012, this aims to build national capacity for food production and supply, and strengthen food security and disaster resilience. National Policy on Climate Change: Initiated in 2012, this seeks to contribute to the sustainable development of Niger by reducing the adverse impacts of climate change. National Strategy and Plan of Action for Climate and Variability (SNPA-CVC): Adopted in 2003 and revised in 2014, this aims to expand options for Niger´s development and preserve these options for future generations. National Plan on Environment for Sustainable Development: Adopted by decree in April 2000. 2014-2023 Plan on Sustainable Consumption and Production: Formulated in June 2013, this supports an enabling environment for balanced and inclusive development. The Strategic Framework for Sustainable Land Management (2015-2029): Adopted in 2014, the overall objective is threefold; to improve synergy across interventions, avoid duplication of actions, and make judicious use of financial resources.

Adaptation Planning²⁶

Current and future climate assessments were conducted in preparation for the First National Communication (2000) and through the African Adaptation Programme (AAP). These assessments informed the National Strategy and Plan of Action for Climate and Variability, the National Policy on Climate Change and the NAPA. Additional assessments were made in 2012 with the support of the World Bank. Since then, two other National Communications have been developed and submitted to the UNFCCC (2009, 2016). The impacts of climate change, including changes in temperature, rainfall patterns and droughts, was assessed for the following sectors; agriculture, livestock, forestry, health and water resources. There is a need to strengthen climate observation and monitoring systems in all sectors, to reduce uncertainties and provide more robust information to decisionmakers.

²⁵https://www.undp.org/content/dam/undp/library/Climate%20and%20Disaster%20Resilience/Climate%20Change/Niger_NAP_country_briefing.pdf
²⁶Https://www.undp.org/content/dam/undp/library/Climate%20and%20Disaster%20Resilience/Climate%20Change/Niger_NAP_country_briefing.pdf

Regional Integration with the West African Power Pool (WAPP)²⁷

2018 Highlights

In 2018, the supply of electrical energy for export was marked by the following elements:

• Commissioning of the Ghana-Burkina interconnection in June 2018 via the 225 kV Bolgatanga (Ghana) - Zagtouli (Burkina) line;
• Improvement of the voltage withstand at the 225 kV Ferké substation following the commissioning of the 225 kV Laboa-Boundiali-Ferké line in December 2018. This line will also be used to decongest the 225 kV Taabo-Kossou-Bouaké artery which handles transport to Burkina Faso and Mali 
• Since September 2018, energy exported to Burkina has fallen considerably compared to the targeted supply programme. This is due to the fact that the power system of Burkina Faso encounters difficulties to maintain the average transit beyond 60 MW, when 90 MW were targeted.

Integration challenges

According to Sédiko Douka, energy commissioner of the Economic Community of West African States (ECOWAS), West African nations face an energy crisis and individual state energy sectors are disadvantaged by local circumstances such as limited access to energy, poorly performing electricity companies, expensive tariffs, while challenges include the need to overcome a reliance on hydrocarbons and the development of renewable sources of energy. More will need to be done if regional progress towards electricity integration (via projects such as the recent commissioning of the Bolgatanga-Ouagadougou interconnection linking ECOWAS members Burkina Faso and Ghana) is to continue in the medium and long term. With access to electricity hovering between 40% and 52% of the population, and brownouts and blackouts averaging about 80 hours a month, the 15 ECOWAS member states need to confront a chronic lack of access to electricity across the region and persistently high prices. A lack of historical infrastructure planning and poor implementation contribute to enduring poverty and have led to an engrained reliance on emergency rental plants, which inflates power costs even more. Complicating the challenge of extending power supply infrastructure is the fact that several of the group's landlocked states, including Niger, Chad, Mali and Burkina Faso, are located in the Sahel region—an arid zone that will experience significant desertification as global temperatures rise over the course of the 21st century, according to forecasts by climate scientists. ECOWAS estimates that more than 75% of the population of member states are already affected at least once every two years by natural phenomena whose effects are becoming increasingly damaging because of climate change.

Clashing imperatives

Besides supporting the mandate for immediate power demand, the role of the West African Power Pool (WAPP) extends to driving long-term climate-proofing strategies recommended under the framework of the Paris Agreement on climate change, which is due to be implemented by 2020. This regional body is mandated to translate overarching public policy guidelines into sectoral investment schemes that favor relatively new green technologies. The schemes include encouraging the installation of diversified sources of renewable energy, creating off-grid generation and storage technologies and nurturing regional power networks and new trading mechanisms. Although these initiatives are complex, require close co-operation between member states and are expensive to implement, they will secure long-term electricity supply security for West Africa if they succeed.
Domestic power utilities are at the forefront of electrification efforts, and their mandates to increase nationwide electricity production frequently lead to conflicts with the WAPP over the type of power generation used. The WAPP is concerned that regional pressure on states to increase electrification could lead to an oversupply of inefficient, fossil fuel-intensive or environmentally damaging generation that relies on coal or hydropower, which would be counterproductive to the WAPP's climate-proofing aims. Indeed, new research by the US National Academy of Sciences suggests that similar large-scale electrification projects in Western countries in the past have had a disastrous long-term effect on the environment²⁸ . At present, domestic demand in West African countries is often too low to attract investment in such large-scale projects, but this is changing. Several countries are set to increase their reliance on hydrocarbons as a result of developments in the West African basin, especially in Senegal, Ghana, Côte d'Ivoire and Nigeria (the last being an established oil producer). But the countries involved argue that the resulting power generation from these developments will mostly be gas-fired, which would provide significant low-emission generation gains to the power market.

Figure 4: West Africa’s energy situation

Network integration

If the installation of new power generation capacity remains largely a domestic state-based prerogative, the integration of existing networks is firmly in the WAPP's remit. The continued involvement of third-party donors and financial institutions such as the African Development Bank and the World Bank is likely to ensure that the focus on regional integration remains at the forefront of electricity stakeholders' concerns. In 2016, with the African Development Bank’s help, the WAPP accelerated the construction of a 330 kV double circuit high voltage transmission line from Erukan (Nigeria) to Sakete (Benin) and help meet the needs of the ECOWAS region in suppling reliable electricity supply at affordable cost. The Project, a WAPP key priority, will ensure stable integration of the national electricity networks in the ECOWAS Region and facilitate the accessibility to economic energy resources to all member states of the region. The realisation of this 330 kV WAPP Nigeria–Benin Project will facilitate optimal power exchanges and trading between the Member States. It seeks to establish a robust transmission link from Côte d’Ivoire to Nigeria passing through Prestea, Aboadze, Volta in Ghana, Lomé in Togo, and Sakete in Benin. In 2017, with the World Bank's help, the WAPP launched a regional off-grid electrification project which aims to increase access to electricity in rural areas through innovative solar power solutions, and a regional electricity trading market, which was launched in July 2018. A number of transmission interconnections have already been completed or are under way, such as the 225-kV exchange line between Burkina Faso and Ghana, a 225-kV transmission project linking Côte d'Ivoire, Liberia, Sierra Leone and Guinea and the OMVG interconnector, which will link Senegal, Gambia, Guinea-Bissau and Guinea. It is estimated that the entire region will be connected by the start of the next decade.

Regional electricity market

Assuming that regional states can overcome the obstacles identified earlier, the integration of West Africa's growing power-generating capabilities could create the region's first true power market. Currently, only about 7% of the electricity produced in West Africa is traded. However, in July 2018 the WAPP launched a trading market (with its headquarters in Cotonou, Benin) that will allow ECOWAS member states to trade their surplus electricity. The World Bank estimates that an integrated power-trading system in the region could bring operational and power-generation cost savings of USD 5bn-8bn a year by allowing countries to import cheaper and more cleanly generated electricity.
However, the potential new market throws up several complex political and technical challenges, which will require close cooperation and determination among policymakers, regulators and utilities if they are to work. Throughout much of the region, local power utilities are expected to hinder the conclusion of trading agreements, and low capitalization, ongoing supply problems, poor domestic collection capacity and corruption are likely to result in poor collection of payments, making it difficult to enforce international contracts. Such problems have already been reported in pre-existing projects operating on a smaller scale, such as the West African gas pipeline system linking Nigeria, Benin, Togo and Ghana. After force majeure was declared on the supply of gas by Nigeria at the start of the project in 2011, the pipeline underperformed and the Ghanaian authorities consequently underpaid for supply. The WAPP will need to instigate measures to improve the power sector's creditworthiness, provide guarantees and involve regional institutions, if it is to take the lead in ensuring that the region's electricity infrastructure stands a chance of succeeding, once it is built.

²⁷Source : African Development Bank Analysis; The Economist Intelligence Unit, December 2018
²⁸Source: Electricity from renewable resources – Status, Prospects and Impediments, The National Academies of Sciences, Engineering and Medicine, 2010. Accessible here: https://www.nap.edu/catalog/12619/electricity-from-renewable-resources-status-prospects-and-impediments

Regulatory assessment

[To Be Completed]

Recommendations

[To Be Completed]

National utility

General profile³²

Niger imports most of its energy from Nigeria (about 74%) at very low and stable rates. These tariffs have given a great financial flexibility to NIGELEC, thereby allowing the GoN to maintain relatively low tariffs without having to pass on the cost increases and even reduce the rates charged to the end user for irrigation and for consumers of the social tranche.

NIGELEC also has other sources of revenues from its investments in SONIBANK (a Nigerien Bank) and Mainstream Energy Solutions Limited (a Nigerian independent power producer). However, given the high growth rate for electricity access demand (8% per year) pushed by population rapid’s growth (3.9%) , there is a dire need for additional generation capacity. The implementation of the Goroubanda thermal plant and other planned projects (Kandadji hydro, new capacity for Soinichar, etc) will result in an increase in the cost of supply. Therefore without an appropriate cost reflective tariffs, and improvement in operational performance, the situation of NIGELEC would have probably deteriorated.

In October 2017, the GoN approved the first tariff adjustment since 1994 that became effective in January 2018. The new tariff methodology is based on a cost-coverage approach, and allowed an overall increase of 20% with a social tranche and a multiannual electricity tariff adjustment covering 2018–2020 and 2021–2022. This tariff increase provided NIGELEC with the ability to invest in generation, transmission, and distribution assets to increase access. The company has also started a debt-restructuring plan.

However the company still need to improve its operational performance by addressing a low bill collection rate (<80%), as well as high transmission and distribution losses (c. 21%), while facing the electricity demand growth. The Electricity Act also clarifies the relationships between the GoN and NIGELEC on the one hand, and the relationship between NIGELEC and its customers through (i) a concession contract between the GoN and NIGELEC; (ii) a new service contract between NIGELEC and its customers including service quality requirements; and (iii) a performance contract between the GoN and NIGELEC.

General profile³³

- Declaration de Politique Energétique 2004. This was adopted by Decree no. 2004-338/PRN/MME on 28 October 2004. It stipulates the need to ensure a reliable and adequate energy supply at affordable prices as an important component of the country’s social and economic development. DPE highlights that Niger is endowed with its own significant energy resources and needs to mobilise internal and external resources to harness them.

- Electricity reform 2003-2004. The electricity sector was reformed in 2003-4 and the Electricity Code was enshrined into law through Decree no. 2003-2004. This was intended to govern the production, transmission, distribution, import and export for power. The terms of the code created the conditions for IPPs to play a role in the future development of the power sector. To this effect, the code asserts that ‘the State may authorise one or more natural persons or corporate entities to build and to operate, to the satisfaction of their own needs, private electrical installations

- Stratégie Nationale sur les Énergies Renouvelables (SNER, National Renewable Energies Strategy). National Strategy for Renewable Energy. This was designed to increase the renewable energy contribution to the national energy balance from less than 0.1% in 2003 to 10% by 2020.

- Stratégie Nationale d'Accès aux Services Energétiques Modernes (SNASEM, National Strategy for Access to Modern Energy Services). National Strategy for Access to Modernised Energy Services. This was designed to increase the proportion of the population with access to modernised energy services by 2015. This was to be done through i) access to modern cooking fuels ii) access to motive power for villages with 1,000–2,000 inhabitants iii) access to electricity for 66% of rural and semi-urban populations

- Stratégie Nationale des Energies Domestiques (SNED, National Strategy for Domestic Energies). National Strategy for Household Energy. This was prepared to create a coherent framework for the domestic energy subsector.

Table 13: African Development Bank DtP Niger Report - Production – operating generation capacity:

Transport networks:³⁴

• Zone 1: Zone River supplied by the 132 kV interconnection line Birnin Kebbi (Nigeria) - Niamey (Niger), with a contract capacity of 120 MW but currently limited to 80 MW;
• Zone 2: Niger Central East Zone (NCE), which includes the regions of Zinder, Maradi and Tahoua and is supplied by the interconnection line 132 kV Katsina (Nigeria) - Gazaoua (Niger) with a contractual power of 60 MW currently limited 40 MW;
• Zone 3: The North Zone, which supplies the towns of Agadez, Tchirozérine, Arlit, as well as mining companies with a 132 kV transmission line;
• Zone 4: the East Zone of the Diffa region supplied by the network with 33 kV at Damasak in Nigeria;
• Zone 5: Zone Gaya / Malanville supplied by a 33 kV interconnection transmission line at Kamba in Nigeria

Figure 5 - Tariff, comparison for selected west African countries³⁵

³²Desert to Power Implementation Strategy for Niger – African Development Bank paper
³³http://www.euei-pdf.org/sites/default/files/field_publication_file/RECP_Higher_Education_Country_Mapping_Niger_May2015.pdf
³⁴https://energycharter.org/fileadmin/DocumentsMedia/Occasional/Niger_Energy_Sector.pdf
³⁵World Bank Report

Mapping of ongoing programmes and projects³⁶

Donors interventions:

• India Exim Bank Solar

  Electrification of 30 rural villages (number enhanced to 50 villages) using photovoltaic solar home systems (at an estimated cost of US$ 9.84 million) (Completed in October 2018)

  Setting up of an on grid Solar Photovoltaic Plant of 5 MW (enhanced to 7 MW) capacity (US$ 24.70 million) covering 20 hector areas (completed in December 2018); project owned and operated by NIGELEC.

• ECREEE

  Solar mini-grid for the village of Gorou 1(27.5 KWC) Through the Renewable Energy Promotion Project supported by the ECOWAS Center for Renewable Energy and Energy Efficiency (ECREEE) in collaboration with Plan International Spain.

  Solar PV (stand-alone) electrification of Tondigamey village (0.1 million Euros)

• Banque Ouest Africaine de Développement (BOAD – West African Development Bank)

  Rural electrification by hybrid solar/diesel plants in forty-seven communities in Niger (US$ 20 million), project implemented by ANPER.

  Rural Electrification Emergency program 2015-2016 was designed to implement diesel generator-powered systems (US$ 13.5 million)

• IRENA & Abu Dhabi Fund for Development

  Project focused on rural electrification for over 150,000 people, using 2.1 MW solar PV micro-grids and solar home kits. 100 schools will be electrified, drinking water supplies will be improved

• ECOWAS Investment Bank

  Electrification of 200 villages by Solar Home Systems in seven regions with the support of Eximbank India

• AFD- EU

  Gorou Banda Solar PV Plant 30 MW

  Agadez Solar PV Plant 19 MW

• African Development Bank

  PEPERN Electrification in rural and peri-urban areas Project –UC 59 millions of which Gorou Banda extension 20 MW (thermal), network extension, and technical assistance to strengthen sector capacity

• AfDB-World Bank-AFD- others

  Kandadji hydro

• World Bank

  NESAP – USD 50 million to increase electricity access in rural and peri-urban areas through standalone solar systems; rural electrification through service-based solar hybrid mini-grids implemented by ANPER to add mini-grids for dense localities beyond 30km from the existing and planned grid; solar hybridization of isolated thermal mini-grids and network expansion implemented by NIGELEC.

  NELACEP Niger Electricity Access Expansion Project – USD 70 millions for investments in the expansion, reinforcement, densification, and rehabilitation of medium/low voltage (MV/LV) distribution systems to expand and improve access to electricity in seven major urban areas and technical assistance (TA) to develop a comprehensive long-term road map for electrification and to strengthen the institutions of the energy sector

Table 14 - Mapping of ongoing and planned projects across the power spectrum

³⁶African Development Bank report -DtP Niger report

Investment opportunities for the private sector³⁷

Niger’s energy sector has many opportunities related to its important potential that are only slightly exploited.

A favourable investment climate, in particular:

• The implementation of a policy of promoting Public And Private Partnerships (PPP), consecrated by the Ordinance No. 2011-07 of September 16, 2011 and ratified by law No. 2011-30 of 25 October 2011 and the establishment a Supporting Cell to guide investors. The PPP Supporting Cell, established by Decree No. 2011-560 / PRN / PM of 9 November 2011, was attached to the Prime Minister’s Cabinet, to affirm the commitment of the authorities to the matter;
• The creation of a very incentivized legal and fiscal framework that allows foreign companies to freely conduct business without discrimination;
• The Investment Code and other sectoral laws guaranteeing the transfer of capital and investor profits;
• The creation of a unique window for the implementation of the provisions of the Law (Investment Code) to facilitate business creation or installation of foreign companies in the Republic of Niger;
• The creation of a High Council for Investment in Niger (HCIN), an orientation organ, under the authority of the President of the Republic with a main mission to organize discussion and provide guidance on matters relating to the promotion and development of domestic and foreign investment;
• The ongoing creation of a regulatory organ for the energy sector

In the oil field:

• The development of a market for butane gas (LPG) for domestic use;
• The building of a 910 km pipeline project to export crude oil through Chad and Cameroon. Scheduled to be operational in 2017, the financing of the project is under discussion with Chinese partners. The financing is not yet completed, and therefore may be of interest to investors;
• An oil framework shown in the map below, consisting of 42 blocks. The situation of these blocks is as follows since July 2015:

  - 18 blocks under Search Exclusive authorization;

  - 2 blocks under exploration license;

  - 22 free blocks among which 2 (R5 and R6) have a proven potential following drilling work by the CNPC. The remaining 20 blocks have not yet had sufficient research.

In the electricity field:

• Drafting new policy and a strategy for electricity access in Niger, accompanied by a five-year action plan (with technical assistance funded by the World Bank);
• Ongoing revision of the Law on Electricity Code, to make the framework more transparent. The project is currently at the parliament for adoption in 2015;
• An ongoing master plan for elaboration of power production and transport, with technical assistance funded by the World Bank;
• Increasing energy demand, especially in the industrial sector (the extraction industries: oil, gold, iron, cement materials, uranium mining, etc.);
• The strengthening and development of the electric transmission network inside the country; - The electrical network is already interconnected to other countries in the sub region, so there is the possibility of exporting energy (to Nigeria for example);
• The proposed construction under a PPP contract (BOT) of a 600 MW thermal coal power plant in Salkadamna (the Tahoua region), by “Source California Energy” (US). The project is at the feasibility study stage and has yet to be confirmed;
• The repowering of a coal power plant from 2x18 to 2x25 MW in Agadez by SONICHAR. The project is open to investors and can be realized through a PPP contract;
• Proposed construction of three hydroelectric power plants of 130 MW, 122 MW and 26 MW on the River Niger and its tributaries. The first project of 130 MW began to be realized, with financial support of the ADB and WB, before it was cancelled due to technical failure of the company in charge of the work. It is about to be revived. A Chinese investor has expressed interest for the 122 MW project in Gambou;
• Development projects for Niger’s gas potential are shown by the construction of gas power plants in Zinder (50 MW) and Diffa (50 MW). These projects are open to investors under the PPP;
• The proposed construction of a 330 kV transmission line to connect Niger to other countries in the sub region including Nigeria, Benin, Togo and Burkina Faso as part of the project Exchange of Electric Power in West Africa (WAPP). The project is led by the electricity companies of the involved countries, supported by an intergovernmental agreement to cover the risks. It is at the stage of research and funding, and is open to investors for realization in PPP;
• Niger signed the European Energy Charter (1991) in April 2015 and the International Energy Charter (2015) in May 2015, which represents a strong signal from the authorities of their commitment to ensure better protection of foreign investments in the Republic of Niger. The process of ratification of the Treaty is in progress. The outcome of this process has no doubt because Niger is a member of the Economic Community West African States (ECOWAS). The ECOWAS protocol on energy, which was ratified by Niger in 2005, developed on the basis of principles of the Energy Charter Treaty.

With this opening to investors through the various legal framework reforms and the real opportunities that exist, Niger’s authorities are committed to creating the necessary conditions for the development of the sector to make energy available and affordable throughout the country. The creation of mission structures including the PPP Supporting Cell and the High Council for Investment in Niger (HCIN), respectively attached to the Prime Minister, Head of Government and the Cabinet of the President of the Republic, Head of the State, all supported by the signing of the Energy Charter, is eloquent proof of this commitment. It remains only for investors and project developers to capture these available opportunities and accompany the Niger authorities in the implementation of their development agenda.

Sample sources of concessional funding

• African Development Bank financing solutions: https://www.afdb.org/en/projects-and-operations/financial-products/
• A list of available sources are available here: https://www.get-invest.eu/funding-database/?_search=1
• Africa Renewable Energy Fund (AREF): https://www.gogla.org/africa-renewable-energy-fund-aref
• Africa Power Platform: http://www.africanpowerplatform.org/financing/grants.html
• Seed Capital Assistance Facility (SCAF): https://www.scaf-energy.org/
• Energy access Africa: https://energyaccess-africa.com/2016/10/10/funds-available-for-energy-access-companies-and-projects-in-africa/
• Energy Africa Infrastructure Fund: https://energyaccess-africa.com/2016/10/10/funds-available-for-energy-access-companies-and-projects-in-africa/
• IRENA/ ADFD: https://www.irena.org/ADFD/Project-Facility/Funding-Offer

³⁷https://energycharter.org/fileadmin/DocumentsMedia/Occasional/Niger_Energy_Sector.pdf

Contact information of local donor representations

About opportunities in the country

⁴⁹African Development Bank report -DtP Niger report
⁵⁰African Development Bank report -DtP Niger report
⁵¹http://documents.worldbank.org/curated/en/630161534524243997/pdf/NIGER-ELECTRICITY-PAD-08142018.pdf
⁵²African Development Bank report -DtP Niger report
⁵³African Development Bank report -DtP Niger report
⁵⁴https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2013/RRA_Niger.pdf

About private sector participation

⁵⁵https://fortuneofafrica.com/niger/2014/04/29/investment-incentives-in-niger/