Benin is a small country with a population of about 8.7 million and a per-person income below Sub-Saharan Africa’s average. Benin's per-capita energy consumption is far less than the world average. Consumption of firewood and charcoal represents about 49.5 percent of total final energy consumption in 2010, petroleum products 48.3 percent and electricity 2.2 percent. The household sector (53 percent) has the largest energy consumption, followed by transport (36 percent) because of the consumption of petroleum products, and services sector (9 percent). In 2012, 90 percent of Benin’s electricity consumption comes from imports. The national electrification rate is of 28.2 percent, with 54.9 percent in urban areas and 4.5 percent in rural environment. The coverage rate was of 41.6 percent in 2013. Benin is 100 percent dependent on petroleum imports, making it vulnerable to dollar exchange rates and fluctuations in oil prices, which further compromises Benin’s domestic capacity to develop its energy services.
Benin has huge and untapped renewable energy potential. Benin’s existing energy infrastructure remains extremely vulnerable to climate change impacts. While Benin’s National Adaptation Plan of Action mentions the necessity of an emergency response plan to deal with the impacts of meteorological extreme events, this plan has yet to be developed. Benin faces significant challenges in developing renewable energy, including the absence of a legal incentive framework for IPPs or a specific tariff policy for renewable energies, as well as the high initial investment cost. SREP funding will help accelerate the infrastructure development of renewable energies electricity generation.
The Beninese economy growth was slow (3.8%) to meet the social demand caused by rapid population growth. This imbalance between population growth and economic growth increases the level of poverty.
Based on the potential recoverable renewable energy sources in Benin, the minimum target of 25% of renewable energy in the national energy mix by 2025 is achievable by the development of potential bioenergy, hydro, solar and wind energy. Working with the AfDB, IFC and the World Bank, SREP intervention will help the implementation of the equipment plan for electricity production from renewable energy sources. This plan is developed based on the demand forecasts, the renewable energy potential available for the projects in the pipeline and the considered facilitations to be granted to private developers within the implemented legal framework.