Written By: Faith Jemosop
Mali’s power grid is on the verge of collapse as a staggering debt of over $94 million (more than 54 billion CFA francs) owed to SOGEM, the regional agency managing the Manantali Dam, threatens to disrupt electricity supply.
In a letter dated April 25, SOGEM’s director general warned that the situation has become a matter of “life or death” for the dam’s operation. Manantali, a crucial hydroelectric plant, supplies electricity to Mali, Senegal, and Mauritania but Mali alone receives more than half of its output. The unpaid debt has become the latest alarm in a worsening crisis marked by blackouts, protests, and financial turmoil.
There are several underlying causes:
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Ailing Energy Institutions and Mismanagement
Mali’s energy problems lies Energie du Mali (EDM), the state utility company riddled with debt, mismanagement, and corruption. EDM’s debt is estimated to be around 600 billion CFA francs (roughly $915 million). Internal audits revealed massive overbilling scandals and theft of fuel intended for power generation. In 2022, for example, two fuel suppliers were paid 19 billion CFA francs more than they should have received. Such malpractices not only drained the company’s finances but also crippled its ability to keep power stations running.
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Dependence on Costly and Aging Infrastructure
Mali’s electricity system still depends heavily on thermal power plants that consume vast amounts of fossil fuel. These plants are outdated and inefficient, making them highly sensitive to global oil prices.
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The war in Ukraine and its impact on fuel costs only worsened the burden. Since the government sells electricity at subsidized rates, EDM makes losses on every unit of power it provides. Over time, this unsustainable pricing model led to the accumulation of massive debts.
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Underperformance of Hydropower Assets
While Mali relies on hydropower for more than 60% of its electricity, this sector is also struggling. Besides the Manantali Dam, other plants like Gouina and Félou have faced technical problems and reduced efficiency.
Poor maintenance, funding gaps, and a lack of regional coordination under the OMVS (Organization for the Development of the Senegal River) have limited their potential. This has left Mali unable to maximize its clean energy capacity at a time when it’s needed most.
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Delayed International Assistance
Mali’s attempts to seek help from international partners have been met with delays. A $60 million package from the World Bank aimed at helping EDM purchase fuel has been held up due to compliance conditions.
These include sourcing fuel from approved suppliers and making difficult reforms like slashing the public wage bill. As these reforms remain politically sensitive, access to emergency funding has been stalled, worsening the crisis.
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Political Instability and Its Consequences
Frequent political upheaval has also hurt Mali’s ability to respond to the crisis. Two coups since 2020 have strained ties with international financial institutions and regional organizations like ECOWAS.
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Sanctions and reduced foreign investment have slowed infrastructure projects and limited access to emergency credit lines. The instability also discourages private sector investment in renewable energy or power distribution.
In response to the crisis, Mali’s transitional authorities have initiated several measures
- Diversifying Energy Sources: Mali is exploring partnerships to develop solar and nuclear energy. Notably, agreements have been signed with Russian entities to advance nuclear energy projects.
- Infrastructure Investments: The African Development Bank has approved a $302.9 million loan to finance the construction of a power line linking Mali to Mauritania and support the development of solar power plants.
- Anti-Corruption Measures: The government has conducted audits and taken legal actions against individuals involved in financial misconduct within EDM. In mid-January 2024, several senior executives and the former Minister of Energy were arrested for their roles in the mismanagement.
