18 May 2012 – In line with Mauritania’s move towards economic liberalisation, the country has been reviewing its electricity sector’s policy and regulatory laws. The state will focus on policy making, investment programming and supervisory functions, while a regulatory authority is to be established to provide the framework for operational activities. The control of these operational activities will be done by the private sector.
Currently electricity generation and distribution are the monopoly of the state owned Mauritanian electricity company Somelec. Electricity production is mostly based around oil and diesel fired power stations, with 22% of electricity being imported from the Manantali hydroelectric power station in Mali, which belongs to the Senegal River Development Organisation.
Somelec was created in 2000 when the country’s water and electricity sector activities were separated for better management. It employs some 1,000 people and manages a network consisting of individual production units supplying some 40 towns and areas throughout the country.
The utility is aware of the need to adapt to a liberalised economic environment. “We must adjust our tariffs, improve production management and billing services, and increase recovery rates. We must therefore also lower our production costs to maintain our financial viability,” Somelec managing director Mohamed Ali Ould Sidi Mohamed said.
A program of house-to-house visits by meter-reading agents will help to reduce fraudulent access to the grid, one of the problems the company faces, while at the same time providing the utility with a more accurate ability to predict demand.
The Mauritanian government completed all the regulatory law preparatory work and the bidding procedures to privatise Somelec during 2002, but the sale was not completed. Four of the five multinational companies that qualified to bid on the firm during 2001 had withdrawn by spring of 2002. This was linked to a generally unfavourable international energy market – the collapse of energy giant Enron in the USA at the end of 2001 caused severe disruptions in the financial status of many of the leading multinational electricity companies. However, the privatisation process was not cancelled, merely postponed until global market conditions improved.
“Somelec’s need for investment and funding is enormous because it must respond to the increasing demand for electricity while improving quality of service standards,” Ould Sidi Mohamed said. The state has decided to open Somelec’s capital requirements to private partners to bring in technological know-how and fresh investment. The country’s growing energy needs are becoming harder and harder to predict. “All our projections are rapidly overtaken because of the constant creation of new development projects that do not figure in our original plans.”
Last year the French development agency AFD granted Mauritania €20 million, in part to reform the electricity sector. The objective set by Mauritania is to reach electricity coverage of 50% to 80% by 2015. The production of renewable energy sources will be increased to 15% in 2015 and 20% by 2020.