Power policy

Guinea has a lack of policies to incentivize clean energy development, partly as a result of its many rivers and the government’s focus on tapping into an estimated 6 gigawatts of hydropower potential. Promising developments include the creation of the rural electrification agency, AGER, in 2017. That was slow off the mark, however, with a board of directors only having been established in June 2019. State utility Electricité de Guinée’s (EDG) mandate must also be more clearly defined. A long-awaited reform of the 1993 Electricity Law has now been drafted, but has yet to be validated. To restructure EDG, Veolia managed the utility from 2015 to 2021.

Tenders are open for bidding by EDG, however there are no tenders for renewable energy sources. Guinea's 2021 NDC includes a target of reaching 80% of hydro-based energy by 2030. Currently, hydro represents around 65% of Guinea's matrix. To reach its newest target, the country has committed to implement 90% of renewables from all new capacities. This objective is aligned with Guinea’s 2030 universal energy access target exclusively by renewable energy. VAT and duty exemptions can be granted to projects but are given on a case-by-case basis.

Power prices and costs

Guinea’s power prices rose in 2021. Commercial, industrial and residential rates went from $162.46, $162.46 and $30.41, in 2020, to $185.5, $185.5 and $39.38 in 2021, respectively. Starting in 2018, prices were increased in order to ensure a better cost recovery, with substantial increases to commercial and industrial rates, though prices are still set below cost rates. Prior to this, tariffs had not been adjusted for more than seven years. The state subsidizes EDG to allow it to remain operational. With regard to power purchasing, EDG agreed to pay China Water and Electric around $85/MWh for energy produced by the 240-megawatt Kaléta dam, which was completed in 2015. Investments in interconnectors aim to facilitate Guinea’s interest in becoming a net exporter in the mid term.

Power market

Around two-thirds of generating capacity is derived from small and large hydropower, with the completion of the aforementioned Kaléta project in 2015 effectively quadrupling the installed large hydro capacity. Hydropower capacity is set to scale up with a series of dams in the pipeline, including the 450-megawatt Souapiti project. The remainder of Guinea’s electricity fleet is oil- and diesel-fired. There are plans to develop offshore gas fields, but reserves remain unproven. Efforts to liberalize the power market are driven by the prospect of trading competitively within the West African Power Pool and the first two of four planned interconnection lines should be completed by 2022.

To date, generation is the only segment of the power market open to private players, with EDG generating 90% of all electricity. Guinean power generation is dominated by few actors, notably EDG alongside a few independent power producers such as AON, GDE and AISI. However, EDG produces around 90% of all power. Consumers have no choice but to purchase from EDG or from what ever microgrid independent power producers have built in their area. Moreover, in rural areas, transmission and distribution are also somewhat liberalized under the auspices of the rural electrification agency, AGER. However, the geographical and operative demarcations between the two are still not clearly established. A large share of international donors' work in the energy sector focuses on the improvement of distribution networks.

All energy investment to date has come from outside of Guinea due to the limitations of domestic finance. There have been no more than a few residential solar panels and mini-hydro plants installed, while capital has been directed instead into large hydro projects. The most notable investments to date are China Exim’s $1.3 billion package for the 450-megawatt Souapiti dam, Sinohydro’s $812 million for the 294-megawatt Kouokutamba dam and Sintram’s $400 million for the 100-megawatt large hydro project. Further investments target electrification efforts, rebuilding the country’s distribution network and investments into four new interconnector lines.

Doing business and barriers

Power demand has been steadily increasing in Guinea; electrification will continue to increase demand, with more than 55% of the population remaining unconnected despite a 24 percentage point increase in national electricity access rates since 2010. While urban electrification rates have been improving quickly, progress in raising the rural population’s access to power has been slow, with less than a third connected to the grid. There is therefore significant potential for off-grid project development given the county’s ample hydro and solar resources. Existing thermal plants have been modernized, and a program funded by the European Investment Bank is doing the same for the country’s large hydro assets.

Access to finance is consistently identified as the biggest issue holding back the implementation of renewable energy projects in Guinea. Moreover, the absence of clear off-grid regulations or clean energy incentives has much to do with the country’s reliance on large hydro, and subsequent disinterest in developing renewables. A lack of experienced personnel within the project development supply chain further increases the upfront costs facing potential developers. Prospective investors must also take import duties and VAT into account, given that exemptions cannot be assured.

Currently, Guinea is facing aggravated political turmoil from a September 2021 coup, as Conde, the first democratically elected president (in 2010, and re-elected in 2015) was deposed by the military. Mamady Doumbouya, the coup leader, was sworn in as interim president for an undetermined term on October 1, 2021, and the scenario remains unstable. Considering the situation previous to the coup, there did not seem to be a lot of red tape, however corruption and lack of transparency were the main barriers in project development. Many interested private actors have entered the market, especially regarding developing solar capacity, with plenty of memoranda of understanding signed - however, few of these projects actually reach the implementation stage.

The sole offtaker, EDG, is heavily indebted, mainly due to tariffs below cost-reflective levels and low collection rates. Challenges extend to general poor financial and managerial performance, meaning that it cannot be described as a credible offtaker. Veolia’s management term of EDG from 2015 to 2021 was the second time the power company had been under private operation, in an attempt at reform. The previous effort was under SOGEL, which lasted until 2001. Improvements have been noted, however, with such encouraging signs as a reduction in the number/duration of power supply interruptions, a reduction of operational expenditures and an increase in generation capacity and rural and secondary cities. The World Bank is also supporting the improvement of EDG's performance.

EV market

There are no electric vehicles in Guinea as of September 2022.

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

There are no buildings-specific policies available in Guinea.