West Africa Prepares to Establish a Trust Fund to Secure Cross-Border Energy Transactions
West Africa is set to create a trust fund to secure cross-border energy transactions, a key decision made during the first West Africa Energy Cooperation Summit (WA-ECS) in Lomé.
With an annual electricity demand growth rate of 6% and limited cross-border exchanges accounting for less than 10% of the total supply, this initiative aims to strengthen a regional integrated electricity market.
Supported by the World Bank since 2020, the creation of this fund addresses the recurring payment delays that hinder bilateral exchanges.
According to EcoFin, Nigeria, the region's main electricity supplier, exemplifies this problem: in August 2024, the Nigerian Electricity Regulatory Commission (NERC) denounced arrears of several million dollars owed by countries such as Benin and Niger.
Côte d'Ivoire, another major supplier, faces similar challenges, compromising the maintenance and development of infrastructure.
Beyond resolving these tensions, the trust fund aims to attract private investors to finance the 75 projects outlined in the 2019-2033 Energy Infrastructure Master Plan of the Economic Community of West African States (ECOWAS).
This plan envisions adding 16,000 MW to the grid and constructing 23,000 kilometers of interconnection lines, with 70% of production coming from renewable energy sources such as hydroelectricity and natural gas.
However, significant challenges remain. Nearly 50% of the region's population still lacks access to electricity. Modernizing infrastructure and integrating more renewable energy sources will require an estimated investment of $30 billion by 2030.
The implementation of the trust fund could play a crucial role in turning these ambitions into concrete solutions and ensuring better energy distribution in West Africa.
