Wednesday, 29 May 2013

Somaliland gets wind in its sails for revamping power sector
15 Apr 2013

In 2009, Hassan Ahmed Hussein brought an industrial bread-making machine from abroad to install in his hotel in downtown Hargeisa, the capital of Somaliland. Hassan's idea was part business, part self-interest. Wholewheat bread is not available in Somaliland, and he envisioned selling it to small-scale vendors.

He baked bread for four months before coming to the unfortunate conclusion that the machine wasn't cost effective. Electricity in Somaliland is too expensive. While the rest of the world pays an average $0.15-$0.30 per kW hour, Hargeisa's residents pay $1 per kW.

He abandoned the bakery and, in 2009, bought a diesel generator, poles, wires and transformers to start his own power company, Iftin, which rapidly gained nearly 2,000 customers in a catchment area of 10,000 residents. He has since merged his power stations with the city's largest provider, KAAH, and now serves more than 4,500 people on the same grid.

Hassan is not the only local power provider. There is little government support for power generation (pdf), and many of Hargeisa's wealthy residents import diesel generators to power homes and businesses. The independent providers depend on the price of diesel and Middle East exporters.

When Somalia collapsed in 1991, wires, poles and generators in Hargeisa were taken over by the emerging Somaliland government. The new government had no money to invest in the power grid, so independent providers began to appear. As a result, a system whereby neighbours pay neighbours for electricity has gone unchecked.

Somaliland rates are high due to a disjointed network of independent providers that have their own grid and use unreliable, dilapidated equipment. Somaliland's minister of energy, Hussein Abdi Dualeh, says the city loses nearly 40% of its electricity due to technical problems and antiquated materials.

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