Power policy

Mali has a small basket of clean energy policies in place. As part of its National Action Plan for Renewable Energy, it aims to increase the share of renewable installed capacity, including medium- and large-scale hydro, to 58.3% by 2030. As of 2021, clean energy accounted for 47% of the country’s total installed capacity, so the country is close to the target but relies heavily on existing hydropower plants. The government aims for the installed capacity of renewables, including large hydroelectric plants, to reach 1,416 megawatts by 2030, compared with 405 megawatts as of 2021. For off-grid renewable energy, Mali wants to increase the installed capacity to more than 600 megawatts by 2030, from about 20 megawatts in 2010.

Mali offers exemptions on import duties and value-added tax for solar equipment. A stand-alone feature in the region, the rural electrification fund subsidizes investments in off-grid projects by up to 80% for projects valued at a maximum of $500,000, which is a key factor in boosting Mali’s vibrant off-grid market. The subsidies should incentivize the development of capital-intensive technologies such as solar, but most operators have so far been relying on diesel. Solar-diesel hybrid projects are becoming increasingly popular.

Power prices and costs

Power prices are subsidized and have remained relatively stable for the past decade but are steadily increasing. In 2021, power rates for residential customers rose by 22% and about 7% for commercial customers. State-owned utility Energie de Mali (EDM) operates at a loss due to the heavily subsidized power prices. In contrast, the tariffs offered by independent power producers are cost-reflective, at around triple the price offered by EDM, leading to discontent and limited uptake by customers.

Power market

Most clean energy investments in Mali are international and concessional in nature, with a focus on off-grid projects. For example, the World Bank’s hybridization program from 2014 to 2020 had a budget of $44 million, and a $19 million hybridization project by the Abu Dhabi Fund ran from from 2015 to 2021. The Islamic Development Bank, in conjunction with Morocco’s National Office of Electricity and Drinking Water, is building two solar plants with a capacity of 1.3 megawatts and 1.5 megawatts respectively. In early 2019, the Green Climate Fund and West African Development Bank announced a 4.83-megawatt solar mini-grid project, which they are supporting with an investment of $38.9 million. In the case of Akuo’s 50 megawatts Kita solar project, a domestic commercial bank, Banque Nationale de Developpement Agricole du Mali, was involved in its financing, but this is the only case of commercial finance to date.

About 40% Mali’s power generation in 2021 ran on fossil fuels, with most of the remainder being hydro. All segments of the power market have been liberalized since 2000, but EDM still dominates generation, transmission, distribution, and retail. In rural areas, authorized mini-grid operators can sell power. Fossil fuels make up most of this capacity, although there are an increasing number of PV-diesel hybrid projects.

Tendering processes are yet to be standardized, but the first clean energy projects have been awarded successfully. In 2015, the government issued two PV tenders for the development of a 25-megawatt project in Koutiala and a 50-megawatt project in Sikasso. In August 2019, the rural electrification agency announced a tender for two solar PV plants totaling 1.3 megawatts, in addition to a 1.5-megawatt energy storage system.

Power demand increased annually by 10% on average between 2015 and 2019 in Mali, according to the country’s NDC. Electrification has been improving slowly but surely over the past few years. In 2015, only 36% of the national and 17% of the rural population had access to power, but in 2021 these rates reached 50.6% and 25%, respectively.

Opportunities for mini-grid developers remain abundant. Solar-diesel hybrid plants are also growing in popularity due to the country’s high solar potential and its rural electrification fund. The rural electrification agency is responsible for authorizing such operators, making the process of setting up a mini grid more efficient than in neighboring countries.

Doing business and barriers

The country’s fragile security situation with increasingly acute conflicts have inhibited the development of clean energy projects in Mali. The country’s clean energy incentives are also not always consistently applied, even if they offer comparatively more than neighboring countries. The regulatory framework more clearly sets out the roles of the state utility and rural electrification agency than in most other parts of the region, but a lack of transparency remains. For example, there have been instances in which privately developed mini grids were appropriated by the state, leading to irrecoverable losses and frustration for investors.

EV market

The government has yet to implement any substantive policy support in the electric vehicle sector and the market remains at an early stage.

EV policy

The government has yet to implement any substantive policy support in this sector.

Buildings market

The tropical climate of Mali means the focus is on cooling rather than heating buildings. There is a lack of substantive policy support to improve the energy efficiency and carbon intensity of such efforts.

Buildings policy

The government has yet to implement any substantive policy support in this sector.