Power policy

Togo passed its first renewable energy development law in July 2018, which aims for renewables to make up 50% of 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 108 megawatts of renewable energy projects, including 50 megawatts of solar photovoltaic (PV), 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 (Togolese Agency for Rural Electrification and Renewable Energy), which aims to provide electricity to some of the poorest and most rural communities in the country. The law 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 90 megawatts. In January 2021, Togo floated its first tender for two solar PV projects with an estimated capacity ranging from 60 megawatts to 80 megawatts. AT2ER also holds tenders to train pay-as-you-go (PAYGO) solar kit installers (for free), to install solar water pumps and refrigeration systems.

Power prices and costs

Togo’s challenge is to expand power generation in a cost‐efficient manner. The country is heavily dependent on relatively unreliable imports from the West Africa Power Pool, which provided almost 75% of power consumed in 2018. The price of imported hydropower and gas‐fired power generation ranges from $80 to $120 a megawatt-hour.

In terms of existing national generation, Togo’s second-largest power plant – the 65-megawatt Nangbeto large-hydro plant – was built in 1988. The Benin Electric Council (BEC), an international organization jointly owned by the governments of Benin and Togo, in 2019 selected German company Voith Hydro to rehabilitate the power plant by 2022, an effort that is estimated to require $25 million of investment.

To increase its energy security, Togo in 2010 signed a 25-year power purchase agreement (PPA) with US-based Contour Global for a 100-megawatt heavy fuel oil (HFO) plant, at offtake prices as high as $170 a megawatt-hour. 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 AG, Eranove SA and TSK Electronica y Electricidad SA signed a memorandum to work together on the framework for the 65-megawatt Kekeli gas-fired electricity power station, which will supply 30% of the country’s electricity needs for 25 years.

No utility-scale clean energy project has been built in Togo yet, but existing rural electrification programs have received both international concessional finance and domestic commercial financing. The government is partnering with off-grid companies to offer solar-home systems to rural customers, such as an agreement signed in 2018 with UK-based off-grid solar solutions provider BBOXX to deliver more than 500,000 PV systems to the rural population over the next five years under a rural electrification program called “Cizo” (meaning sun in Togolese), which was launched in 2017.

Further, 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. US company Greenlight Planet in June 2018 won a tender to deliver more than 300,000 solar home systems in three years 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, and continues to work with the organization in other initiatives.

Power market

Most of Togo’s generation capacity is thermal, mainly from the Contour Global HFO power plant and a 65-megawatt large-hydro plant, and it imports most of its electricity from Ghana and Nigeria. The country aims to reach electricity independence and 100% electrification by 2030.

No large-scale renewable project has been 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 BEC still owns most generation capacity in the country, as well as transmission assets. Compagnie Energie Electrique du Togo (CEET) is responsible for retail.

Doing business and barriers

Togo has a low electrification rate of just 24% in rural areas and 94.10% in urban areas. The country has developed a roadmap for electrification to reach 100% of the population by 2030. The Cizo 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 demand for electricity largely exceeds supply and has increased at a compound growth rate of 32.55% from 2015 to 2021. The construction of a utility-scale PV project (5 megawatts 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, UAE-based Amea Power signed the first solar PPA with CEET (Compagnie Energie Electrique du Togo) as it announced the development of its subsidiary . The plant was commissioned in June 2021 and is one of the largest under the independent power producer (IPP) model in West Africa. The country has limited energy value chain infrastructure, seeing as no utility-scale projects have been fully developed so far. The energy law, passed in 2018, has reduced import duties and tariffs and encourages foreign investment in Togo. The national effort and emphasis on energy sector development, carried by renewables, suggest 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. 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

There are no fiscal incentives, specific laws or other policy instruments to regulate the electric vehicle sector.

EV policy

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

Buildings market

There are no fiscal incentives or other policy instruments regarding energy efficiency.

Buildings policy

The Economic Community of West African States (ECOWAS) Commission developed the ECOWAS Energy Efficiency Policy (PEEC), which includes energy efficiency targets, measures, standards and labeling, and incentives, to be implemented at regional and national levels. This policy has been in place since 2015.