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IDinsight Partners with Millennium Challenge Account Senegal (MCA) for Electricity Initiative

14 May 2024

IDinsight partners with Millennium Challenge Account Senegal to design and implement a learning agenda for Compact Electricity Senegal.

©Brett Sayles/Pexels

May, SenegalIDinsight is partnering with Millenium Challenge Account Senegal 2 (MCA-Senegal II) to design and implement a learning agenda for Senegal’s Electricity Compact. The Compact is a $600 million investment into Senegal’s electric grid: $550 million from the US Government – through the Millenium Challenge Corporation (MCC) – and $50 million from the Government of Senegal. Its long term objective is to strengthen the electricity sector and reduce poverty through economic growth. IDinsight will play a key role in generating evidence-based learnings throughout the project cycle, thus  supporting and informing MCA-Senegal II efforts  towards  enhanced business and household productivity through increased electricity access, improved electricity service and optimized energy costs.

This investment forms part of a larger national initiative, the Plan Sénégal Emergent, in which the Government of Senegal has aimed for universal access to electrification by 2025. The most up-to-date numbers from 2022 illustrate that rural electrification stood at 55%, compared to over 95% in Dakar.

This project aims to tackle two critical challenges in Senegal’s electricity sector. The first challenge is the high cost of energy, where grid-connected firms and households face exorbitant electricity prices, limited access to electricity outside Dakar, and an unreliable power supply. These challenges undermine firms’ cost-effectiveness, inflate expenses, and introduce production uncertainties. The second challenge involves complex administrative, regulatory, and legal barriers preventing investment from the private sector in electricity-related projects that could result in improved infrastructure and reduced consumer prices. Under the status quo, the national electricity company is financially vulnerable and the Government of Senegal allocates a significant portion of its budget to subsidize the electricity sector. 

As part of this strategic partnership, IDinsight will design and implement a learning agenda over a 30-month commitment period. The learning agenda will support three complementary projects, namely: 1) Transmission – modernizing and strengthening of the national electricity company transmission network 2) Access – improving electricity access in rural areas, and particularly within agriculture value chains and 3) Reform – power sector enabling environment and capacity development . 

IDinsight will focus on strengthening MCA-Senegal II learning agenda so it is able to optimize the $600 million investment while also generating a knowledge base for donors and the government on how to improve electrification in the future. 

This partnership with MCA-Senegal II marks  a significant step towards enhancing Senegal’s electricity sector and amplifies IDinsight’s footprint in infrastructure-related projects. Together, we aim to drive economic growth through improved access to vital infrastructure, therefore maximizing social impact in Senegal.

“Our partnership with MCA marks a significant stride towards shaping Senegal’s energy landscape. Together, we aim to drive meaningful change and create lasting impact in communities across the nation,” states Essaid Azzouzi, Morocco Country Director, IDinsight.

About MCA Senegal II

Created on January 07, 2020, MCA-Sénégal II is responsible for implementing the Senegal Power Compact, an agreement between the Government of Senegal and the Government of the United States of America, through the Millennium Challenge Corporation. The Senegal Power Compact aims to generate inclusive economic growth and reduce poverty.

The Senegal Power Compact is a grant agreement between Senegal and the United States of America. It comprises an investment grant of 550 million US dollars from the United States of America and an additional contribution of 50 million US dollars from the Government of Senegal, for a total investment of 600 million US dollars. The aim of this Compact is to reduce poverty in Senegal by strengthening the electricity sector, improving reliability, expanding access to electricity, and supporting the Government of Senegal in establishing a solid, modern foundation on which the country’s electricity system can develop.

About IDinsight

IDinsight is a global advisory, data analytics, and research organization that helps global development leaders maximize their social impact. We tailor a wide range of data and evidence tools, including randomized evaluations and machine learning, to help decision-makers design effective programs and rigorously test what works to support communities. We work with governments, multilateral agencies, foundations, and innovative non-profit organizations in Asia and Africa. We work across a wide range of sectors, including agriculture, education, health, governance, sanitation, and financial inclusion. We have team members who are remote and have offices in Dakar, Lusaka, Manila, Nairobi, New Delhi, and Rabat.