Mickael Vogel, director of Strategy at the Centurion Law Group, said that Benin is often overshadowed by its massive neighbour, Nigeria
However, as African countries try to revitalise their energy sector, bring in private capital and develop gas-to-power, it is in West Africa and Benin that observers should look for positive developments, he added.
He revealed that with recent legislative reforms and a strong political will, the small West African nation is strengthening its place as the capital of the West African Power Pool (WAPP) and positioning itself as a big hub for gas and power in the sub-region.
On 24 July, French super-major Total signed a Gas Supply and Host Government Agreement with Benin and its state utility, the Société Béninoise d’Energie Electrique (SBEE). The agreement will see the development of a Floating, Storage and Regasification Unit (FSRU) of 0.5 mtpa, the first in West Africa. LNG supplies from Total’s global portfolio are set to start in 2021 and last for 15 years.
For a region that has repeatedly tried to develop its gas-to-power infrastructure but remained faced with financing, infrastructure and regulatory challenges, this is no small move. According to Power Africa, up to 7,750MW of gas-to-power facilities could be installed between Cote d’Ivoire, Ghana, Nigeria and Senegal by 2030. In practice however, erratic supplies from the West Africa Gas Pipeline, lack of gas and transmission and distribution infrastructure, unattractive pricing structures and outdated master plans mean that such potential might remain under-exploited.
In this context, the recent signing of agreements with Total brings hope to a region hungry for power. Under President Patrice Talon’s leadership, Benin has been implementing a strong Government Action Plan (PAG) since 2016 that places the revitalisation of the country’s energy sector and private sector capital as a pillar of economic development.
The director highlighted that the formula is working: Benin grew by almost seven per cent last year and is expected to grow by 6.5 per cent this year (IMF), placing it in the top 15 of the world’s fastest growing economies.
Benin has been revising its Electricity Code, and its Council of Ministers approved last month the new framework of intervention for the Independent Power Producers (IPPs), improving investment and operating conditions for private investors in the country’s power industry.
As a result, the agreement with Total will not only see the development of West Africa’s first FSRU, it will also revive hopes of seeing clean LNG power future homes and industries across the region. The new gas import project will indeed supply power plants in Benin, such as Maria Gléta’s new 127 MW power station, with Total developing and operating regasification infrastructure, he concluded.
