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The Financing of Energy Transition in Senegal: Green promises, unequal gains?
Haag, Steffen Diop, Mohamadou Fadel Faye, Thialy
Haag, Steffen
Diop, Mohamadou Fadel
Faye, Thialy
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Publication date
2025-08-18
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Research report
Pages
68
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<p>Senegal's energy transition is at a critical juncture. While the country has made significant progress in terms of access to electricity and the integration of renewable energies, its energy financing model remains heavily dependent on foreign private investment and favors the latter. This implies debt-based financing and risk mitigation mechanisms that protect investors while risking increased fiscal pressure on the state.</p>
<p>The dominant model of independent power producers (IPPs) shows how heavily these projects depend on sovereign guarantees and international financial institutions (IFIs) to attract capital. While these projects increase electricity production, they also reinforce financial dependence, can lead to local socioeconomic inequalities, and create an energy system that primarily serves the interests of investors rather than reducing inequalities.</p>
<p>This study examines the financial mechanisms underlying Senegal's energy transition, highlighting their implications for national sovereignty, a just transition, transparency, and accountability. It also explores alternative financing models, such as community initiatives like the “Progrès Lait” project and the “Programme d'accès aux énergies renouvelables” (PAER), which integrate renewable energy into local economies and strengthen energy sovereignty.</p>
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English
French
French