Senegal’s transformational wind power project and the potential risks it faces

In line with the global transition from fossil fuels, we are witnessing emerging new markets in renewable energy.

Africa plays a pivotal role in this transition, as electricity plays a fundamental part in Africa’s new energy system, which is increasingly powered by renewables. More specifically, wind power can potentially shape a sustainable future for Africa.

Senegal is a prime example of this. As a result of its commitment to the Paris Agreement, the international treaty on fighting climate change, Senegal has set a target to generate 30% of its electricity from renewable sources by 2030.

Powered by wind

A significant portion of this goal relies on utilising wind power. Senegal’s strategic coastal positioning along the Atlantic Ocean and the prevalence of the Harmattan winds make it an ideal hub for wind energy.

The potential of wind power can not only transform the country's energy landscape and contribute to its sustainable development goals but also has the capability to provide substantial socio-economic advantages.

Parc Eolien Taiba N’Diaye (PETN) is Senegal’s first large-scale wind energy project and a critical part of the government’s Plan for an Emerging Senegal (PES). PES is President Macky Sall's new policy framework, aiming at getting Senegal onto the road to development by 2035.

PES is founded on three key pillars, structural transformation of the economic framework, promotion of human capital, and good governance and rule of law.

PETN commenced operation in 2020, as West Africa’s largest wind farm, providing a 15% increase in electricity generation, and delivering 2 million people in Senegal with renewable wind power.

Designed for a minimum operational span of 20 years, PETN, built with 46 wind turbines, anticipates an investment of up to USD20 million in broader socio-economic initiatives for the community of Taiba N’Diaye. The project is one of several being built by Lekela.

Lekela, is a British renewable energy company, established in 2015 as a joint venture between Actis (60%), and a Mainstream-led consortium called Mainstream Renewable Power Africa Holdings (‘MRPAH’) (40%), committed to delivering clean and reliable energy across Africa.

The PETN project showcases the strong and growing collaboration between the public and private sectors in enhancing the wind sector in both Senegal and the wider continent.

Potential risks

Despite the positive shift towards renewables in Africa, there are still several risks and potential fallouts that could impact communities, businesses, and individuals.

The extensive size of wind farms and their large-scale installations result in considerable expenses, potentially amplifying political risks due to the frequent need for government participation.

The high costs often necessitate loans, and many governments in Sub-Saharan Africa lack the financial credibility to attract private sector investments.

Although there has been some improvement, past instances of corruption have plagued substantial government contracts and investments. The state’s acquisition of assets can further increase the political risks faced by companies venturing into new markets.

Additionally, the existence of ongoing conflict, creates a significant security risk, especially for emerging markets in Africa. Although Senegal is not one of Africa’s most high-risk locations, many African governments cannot guarantee security, heightened by the remote areas that are required for wind power installations.

More specifically, multiple higher-risk countries, such as Sudan, Niger, Chad, and Nigeria, all possess significant wind power potential. However, these regions all suffer from armed conflicts and insurgencies, posing major security challenges for individuals working at the plant, from construction to operation.  

At Another Day, we routinely carry out pre-transactional and post-transactional analysis to help companies enter emerging or other high-risk markets through intelligence, consulting, and crisis response.

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