Power policy

Mali has a small basket of clean energy policies in place. As part of its National Action Plan for Renewable Energy, it aims to increase the share of renewable installed capacity, including medium- and large-scale hydro, to 58.3% by 2030. Clean energy currently accounts for 29% of the country’s total installed capacity, so it has a way to go to achieve its target. Mali offers exemptions on import duties and VAT for solar equipment. A stand-alone feature in the region, the rural electrification fund subsidizes investments in off-grid projects by up to 80% for projects valued at a maximum of $500,000, which is a key factor in boosting Mali’s vibrant off-grid market. The subsidies should theoretically incentivize the development of capital-intensive technologies such as solar, but most operators have so far been relying on diesel. Solar-diesel hybrid projects are becoming increasingly popular.

Power prices and costs

Power prices are subsidized and have remained relatively stable for the past decade yet are steadily increasing. State utility EDM operates at a loss, despite being supported by the Malian government. In contrast, the tariffs offered by independent power producers are cost-reflective, at around triple the price offered by EDM, leading to discontent and limited uptake by customers.

Clean energy investment has slowly been picking up in Mali since 2017, reaching a record year of $83 million in 2019. Most clean energy investments in Mali are international and concessional in nature, with a focus on off-grid projects. For example, the World Bank’s hybridization program from 2014 to 2020 has a budget of $44 million, and a $19 million hybridization project by the Abu Dhabi Fund has been launched from 2015 to 2021. The Islamic Development Bank, in conjunction with Morocco’s l’Office National de l’Electricité et de l’Eau Potable, is building two solar plants with a capacity of 1.3 megawatts and 1.5 megawatts respectively. In early 2019, the Green Climate Fund and West African Development Bank announced a 4.83-megawatt solar mini-grid project, which they are supporting with $38.9 million of investment. In the case of Akuo’s 50-megawatt Kita solar project, a domestic commercial bank, Banque Nationale de Developpment Agricole du Mali, was involved in its financing, but this is the only case of commercial finance to date.

Power market

Just under half of Mali’s power generation runs on fossil fuels and the remainder is supplied by hydropower. All segments of the power market have been liberalized since 2000, yet EDM dominates generation, transmission, distribution and retail. In rural areas, authorized mini-grid operators can sell power. Most of this capacity is dominated by fossil fuels, although there are an increasing number of hybrid projects. Tendering processes are yet to be standardized, yet the first clean energy projects have been awarded successfully. In 2015, the government issued two PV tenders for the development of a 25-megawatt project in Koutiala and a 50-megawatt project in Sikasso. In August 2019, the rural electrification agency announced a tender for two solar PV plants totaling 1.3 megawatts, in addition to a 1.5-megawatt energy storage system.

Doing business and barriers

Power demand increased annually by 10% on average between 2015 and 2019 in Mali. Electrification has slowly but surely been improving over past years. In 2015, only 36% of the national and 17% of the rural population had access to power, but rates reached 48% and 15.26% respectively in 2020. Opportunities for mini-grid developers remain high. Solar/diesel hybrid plants are also growing in popularity due to the country’s high potential for solar irradiation and its rural electrification fund. The rural electrification agency is responsible for authorizing such operators, making the process of setting up a mini-grid more efficient than in neighboring countries.

Developing clean energy projects in Mali is inhibited mostly by the fragile security situation with multiple ongoing conflicts. The country’s clean energy incentives are also not always consistently applied, even if they offer comparatively more than neighboring countries. The regulatory framework more clearly sets out the roles of the state utility and rural electrification agency than in most other parts of the region, but a lack of transparency remains. For example, there have been instances in which privately developed mini grids were ad hoc appropriated by the state, leading to sunk costs and frustration for investors.

EV market

The government has yet to implement any substantive policy support in this sector and the EV market remains at an early stage.

EV policy

The government has yet to implement any substantive policy support in this sector and the EV market remains at an early stage.

Buildings market

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.

Buildings policy

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.