Power policy

Togo passed its first renewable energy development law in July 2018, which aims to reach 50% renewables in the national energy mix by 2030. The government also published a roadmap to reach 100% electrification by the same year, thanks to the addition of 108MW of renewable energy projects, including solar PV (50MW), hydro, 315 mini-grids and the distribution of 550,000 solar kits. The country is launching an open, transparent and easy-to-navigate regulatory framework. The renewable energy law, published in August 2018, came one year after the launch of the AT2ER (Agence Togolaise d’Electrification Rurale et des Energies Renouvelables), and was followed by a series of decrees detailing the rules that renewable energy project developers should follow. In 2019, Togo joined a global solar initiative where it will jointly develop several solar parks with the International Finance Corporation (IFC) totaling 90MW. A year later, the country introduced its first tender for two solar projects with capacities between 60MW and 80MW.

Power prices and costs

Togo’s challenge is to expand power generation in a cost‐efficient manner. The country relies heavily upon relatively unreliable imports from the West Africa Power Pool, which provided almost 75% of consumption in 2018. The price of imported hydropower and gas‐fired power generation ranges from $80 to $120/MWh. In terms of existing, national generation, Togo’s second-largest power plant – the 65MW Nangbeto large-hydro plant – was built in 1988. Germany-based Voith Hydro was recently selected to update the power plant by 2022, an effort that is estimated to require $25 million of investment. To increase its energy security, Togo signed a 25-year PPA with U.S.-based Contour Global in 2010 for a 100MW Heavy Fuel Oil (HFO) plant, at offtake prices as high as $170/MWh. Such high offtake prices provide an opportunity for large-scale renewables to be built at a considerably lower cost of generation. On October 31, 2018, Siemens, Eranove and TSK signed a memorandum to work together on the framework for the 65MW Kékéli gas-fired electricity power station, which will supply 30% of the country's electricity needs for 25 years.

There has been no clean energy utility-scale project in Togo yet, but existing rural electrification programs have received both international concessional finance and domestic commercial finance. The government is partnering with off-grid companies to offer solar-home systems to rural customers, such as an agreement signed with BBOXX to deliver more than 500,000 PV systems to the rural population over the next five years under the so-called Cizo electrification program. Furthermore, under Cizo, select small-scale solar companies receive fixed, monthly subsidies for each system they install, allowing them to reduce costs and increase access to systems. Greenlight Planet, a U.S. company, signed an agreement to deliver more than 300,000 solar home systems under the same scheme, which has the support of local bank Union Togolaise de Banque (UTB). In 2018, the government signed an agreement with German Corporation GIZ, to accelerate rural electrification through training programs.

Power market

Togo’s generation is mainly thermal. The country relies on a 100MW Contour Global fossil fuel power plant and a 65MW large-hydro plant, and it imports significant gas generation from Ghana and Nigeria. The country aims to reach electricity independence and 100% electrification by 2030. There has been no large-scale renewable project fully developed in Togo to date, although the national electrification and energy independence plan relies heavily on renewable energy build. Under the new renewable energy sector law, renewables benefit from priority dispatch and purchase obligation from the offtaker. Officially, the power sector is open to all players, however, the CEB (Communauté Electrique du Bénin) still owns most generation capacity in the country, as well as transmission assets. The CEET (Compagnie Energie Electrique du Togo) is responsible for retail.

Doing business and barriers

Togo has a low electrification rate of just 23.62% in rural areas and 91.83% nationally. The country has developed a roadmap for electrification to reach 100% of the population by 2030. The program combines the distribution of 550,000 solar kits, notably with partners such as BBOXX, developing 315 microgrids, and extending the distribution grid to remote areas. The level of demand for electricity largely exceeds supply and has increased at a compound annual growth rate of 6.1% from 2013 to 2017. The construction of a utility-scale PV project (5MW by Eiffage and Neoen) has been proposed several times since 2015. It has been held back by the government wishing to benefit from the steep cost reductions of PV, and the required engineering, procurement and construction (EPC) price renegotiations. In 2019, U.A.E.-based Amea signed the first solar PPA with CEET (Compagnie Energie Electrique du Togo) as it announced the development of its subsidiary Amea Togo Solar, which will finance, build and operate a 50MW solar plant in Togo.

The country has limited energy value chain infrastructure, seeing as no projects of scale have been fully developed so far. The new energy law has reduced import duties and tariffs and encourages foreign capital to invest in Togo. The national effort and emphasis on energy sector development, carried by renewables, suggests that bureaucracy should be transparent and in favor of project developers. One major source of concern is represented by Togo’s two power utilities, which have experienced financial distress due to a combination of tariffs that are not cost reflective yet remain unaffordable. Poor revenue collection and operational inefficiencies are at the root of the problem. At the end of 2016, the CEET had accumulated arrears of 44 billion West African francs ($75 million) and arrears from CEET to CEB amounted to 29 billion West African francs ($50 million). Togo’s current grid infrastructure is also unreliable, even when energy is available, as the system suffers from ongoing voltage drops and system losses.

EV market

GFEI is supporting Togo to develop policy proposals that promote the import of cleaner and more fuel-efficient vehicles. The outcomes of the workshop included ambitious yet feasible proposals for improving vehicle fuel efficiency in the country.

EV policy

There are new proposals for improving vehicle fuel efficiency in the country. One major recommendation was a ban on conventional two and three (2 & 3) wheelers in favor of electric motorcycles.

Buildings market

The ECOWAS Commission has developed the ECOWAS Energy Efficiency Policy (PEEC) which includes energy efficiency (EE) targets, measures, standards and labeling, and incentives, to be implemented at regional and national levels.

Buildings policy

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