Power policy

Sudan’s geography is well-suited to renewables, with high solar irradiation and strong winds, and this could help curb the country’s reliance on costly imported fossil fuels. However, aside from plans to integrate 20% renewables into its power system by 2030, the government has not explicitly issued any further national objectives. With no utility-scale renewables commissioned to date, Sudan has a long way to go in its deployment of clean energy.

The two major pieces of legislation for Sudan’s energy sector – the Electricity Act of 2001 and National Investment Encouragement (NIE) Act of 2013 – do allow tendering for energy projects. Specific legislation for the renewable energy sector is in the works in preparation for a renewables master plan. A feed-in tariff is under development with the support of the United Nations Development Programme (UNDP).

The country does not offer any clean energy incentives. A public-private partnership (PPP) law and import-duty exemptions for solar components were planned, but they are stuck at various stages along the legislative pipeline.

Power prices and costs

Sudanese consumers benefit from generous electricity subsidies, which accounted for 15% of the government’s expenditure in 2017. This has resulted in some of the world's lowest retail prices at an average $18.52 per megawatt-hour. A reduced ‘social tariff’ benefits those who consume less than 200 kilowatt-hours per month, and this is a higher threshold than elsewhere in the region. These tariffs fall far short of meeting utilities’ production costs, leaving companies financially dependent on the government. Increasing tariffs is a difficult option for the government given the country’s political instability.

Following the breakaway of South Sudan in 2011, Sudan lost the majority of its oil assets, forcing it to import fuel for thermal power generation. Sudan’s runaway inflation and currency devaluation has compounded the challenge, making fossil fuel imports increasingly expensive. However, domestic fuel prices in Sudan have been among the lowest in the world due to heavy subsidies that offered retail prices far below the cost of production. As of June 2021, Sudan has lifted these fuel subsidies in the hope of relieving its foreign debt by implementing International Monetary Fund (IMF) -oriented reforms.

Power market

Sudan is predominantly dependent on oil- and hydro-based power generation, with hydropower accounting for more than half of installed capacity. The country has not added any generating capacity since 2018.

The structure of Sudan’s power sector has evolved in recent years. After the sector unbundled at the turn of the millennium, the Sudanese Electricity Holding Co. was created in 2016. It has an effective monopoly on procurement, with the holding company overseeing two generation utilities – the Sudanese Thermal Power Generating Company and its hydro-focused counterpart – as well as two firms that cover distribution and transmission. These companies remain state-owned, despite the 2001 Electricity Law opening up private participation in the energy sector.

There are no real independent power producers in Sudan. There is one company that owns and operates thermal plants in a handful of regional capitals, although its fuel is supplied by the Sudanese Electricity Holding Co. free of charge.

There is no standardized form power purchase agreements (PPAs) in Sudan, but the government is reportedly finalizing a Public-Private Partnership Act that will increase private participation in developing the country's infrastructure, including the electricity sector. There are a few "semi-PPAs” in place in regional capitals, where Turkish companies own and operate diesel plants. However, as the fuel for those plants is provided by the Sudanese Thermal Company, they can be viewed as a form of leasing agreement rather than a true PPA. A single PPA with an unspecified United Arab Emirates solar company is reported to be under discussion.

Doing business and barriers

Power demand in Sudan has increased by an average of 9% per year since 2015, but 46% of the population remains without access to electricity. Sudan’s government is aiming for universal electrification by 2031. It says that at least 80% of energy-access initiatives will be through grid connections, connecting about 250,000 households per year. In areas where grid connection is not possible, 2.5 million standalone solar home systems (SHSs) will be provided by 2023.

However, electrification responsibilities largely lie with individual states, and while there is some support from the national and utility levels, regions must cover the costs involved. The dire financial situation across the country does not bode well for rapid electrification. The devolution of grid extensions to regional authorities also leads to a lack of coordination at a national level and impedes long-term planning. With little oversight of transmission projects, many are being completed in a haphazard manner.

The UNDP is running a $4.89 million off-grid solar-powered irrigation pump program over the course of five years, which is being funded by the Global Environment Facility. The African Development Bank (AfDB) is reportedly planning to expand its "Desert to Power" program to parts of Sudan, too. Investments have been limited to rural electrification schemes, with the UNDP and Sudan’s government implementing separate initiatives to expand energy access through distributed renewables.

Energy developers entering the Sudanese market face a number of obstacles – primarily the unstable macroeconomic and security situation, aggravated by the current political situation of a transitional government. In addition to high capital expenditure costs due to country risk, the lack of market transparency, very low power tariffs and weak purchasing power pose further challenges to project development.

Developers also face many difficulties securing finance in Sudan. No domestic banks offer loans to developers investing in clean power, and years of international isolation, coupled with crippling debts and a dire security situation, have left international financial institutions reluctant to bankroll renewable energy projects in the country. Trouble attracting donors has translated into a lack of utility-scale renewables build. Several projects have been announced, including 250 megawatts (MW) of solar PV and four utility-scale wind farms totaling 320MW, but all struggled to secure funding and have been canceled or downsized.

EV market

Sudan’s government has yet to implement any substantive policy support for electric vehicles (EVs), and the EV market remains at an early stage.

However, according to the country’s 2021 NDC, in order to help decarbonize road transport.

Sudan will blend fossil fuels for internal combustion engine vehicles with 10% biofuel and also promote fuel efficiency.

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

As part of Sudan’s updated NDC, measures to improve energy efficiency include reducing grid losses in transmission and distribution, and promoting the use of efficient appliances in residences.

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.