Through the U.S. Agency for International Development (USAID,) the United States government has joined the self-declared Somaliland Administration in presenting a wind energy facility project to power the Hargeisa Egal International Airport.
Officiated by Somaliland President Ahmed Mohamed Mohamoud Silanyo, a ceremony was held on June 2 at the Hargeisa Egal International Airport. Other attendees included USAID’s Acting Somalia Office Director Hodan Hassan, various representatives from the private sector and civil society and the Ministers of Civil Aviation, Environment, Information, Interior, Planning and Water.
The Somaliland Ministry of Energy and Mineral Resources has been charged with the responsibility of controlling and overseeing the new wind energy facility project, which will also be managed by the government via a public-private partnership.
The facility is set up to serve as an alternative to expensive diesel fuel by powering some of the surrounding communities as well as the airport. Golis Energy, a local engineering company supported by USAID, has been credited for constructing the major wind farm.
At over $1.25 per kilowatt, the cost of electricity in Somaliland is one of the highest rates in the world. The high energy rates in Somaliland are a result of a disorganized network of independent providers that use different grids and unreliable equipment.
The state loses nearly 40 percent of its electricity due to various technical problems that arise from the dilapidated equipment. Minister of Energy Hussein Abdi Dualeh has stated that theft and illegal connections further cause power providers to barely break even. “We need a legal framework to govern the sector — we need an electricity law.”
Dualeh believes that renewable energy needed to be considered because Somaliland has more than 340 days of sun and “some of the fastest wind in the world.” Since 2011, USAID’s Partnership for Economic Growth program has been working with officials and the private sector in Somaliland to bring renewable energy to the area.
Additionally, Somaliland officials and USAID have ensured a competitive market for the new energy services and drafted a series of necessary laws and regulations to “regulate and standardize the sector.”
Since 2010, USAID has invested almost $50 million in Somaliland for a number of sectors, including community stabilization, governance, education, health and economic growth. An additional $14 million was allocated to fund USAID’s Partnership for Economic Growth program, which has financed efforts to develop renewable energy in Somaliland, invested in the livestock and agriculture sectors, and promoted economic stability through private sector development.
The issues with Somaliland’s energy sector have had an enormous impact on private business and investment climate. A 2011 assessment carried out by USAID’s Partnership for Economic Growth showed that most business owners cited electricity rates and services as a “constraint to growth.”
For small-scale and local industries especially, the high overhead costs equate to difficulties in competing with imports, resulting in fewer products being produced in Somaliland. Citing Somaliland’s “inefficient, unreliable and prohibitively expensive power supply,” Chief of Party Suleiman Mohamed asked, “how can you expect businesses that require a reliable electricity supply to succeed?”
— Kristy Liao