Senegal Expected to Commit to $2.7 Billion Green Transition Plan

(Bloomberg) -- Senegal is expected to recommit to a €2.5 billion ($2.67 billion) program to reduce its reliance on fossil fuels as early as this month’s COP29 international climate conference in Azerbaijan, a key funder said. 

Negotiations over the pact  — a so-called Just Energy Transition Partnership — with some of the world’s richest nations had been slowed by a change of government in Senegal this year. A commitment to the deal, possibly in the form of an investment plan, is now expected, said Remy Rioux, the chief executive officer of France’s state development bank.

While former President Macky Sall had initially announced the program in June 2023, his party lost presidential elections in March and Bassirou Diomaye Faye was appointed as his replacement. That created uncertainty over the deal as well as oil and gas developments worth billions of dollars that companies such as BP Plc and Kosmos Energy Ltd. plan to implement.

A presidency spokesman declined to comment.

Faye is expected to announce support for the project if his party and the prime minister he appointed, Ousmane Sonko, wins parliamentary elections on Nov. 17, Rioux said. Sonko’s Pastef party is widely expected to secure a majority and shore up Faye’s power in parliament.

“It will probably be rapidly after the election if Prime Minister Sonko has a majority,” Rioux, the head of Agence Francaise De Developpement, said in an interview in Johannesburg. The investment plan would detail how the African country plans to boost the share of renewable power in its energy mix. 

The deal, if confirmed, would see the money flow from France, Germany, the European Union, the UK and Canada over the next five years. 

It would add to similar programs with larger developing countries that are reliant on fossil fuels for electricity production. South Africa committed to a program, now worth $9.3 billion, in 2021. It is gearing up to implement its investment plan and has already won €700 million in funding from AFD as well as loans from Germany’s KfW development bank.

Indonesia and Vietnam followed with their own agreements worth $20 billion and $15.5 billion respectively. 

The program is an effort by some of the world’s most industrialized nations, which produce the bulk of the emissions causing climate warming, to help emerging nations invest in renewable energy and reduce their own output of greenhouse gases as they develop.

Senegal currently relies on burning oil and gas to produce most of its electricity. South Africa, Indonesia and Vietnam rely mostly on coal, the dirtiest fossil fuel. 

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