The Sheedi are a community of African-Pakistanis whose history to the region is not known for certain. Many were brought over by Arab traders ... as slaves as far back as the 8th century, while others claim a strong Islamic connection through the Prophet Mohammed. Centuries later the thriving community of over 250,000, are still not accepted as locals in their native Pakistan.
For more than two decades, Djibouti has been in an energy race against time. The stakes are high for this small country with a subsoil devoid of any fossil fuels, and for which electricity coverage is as much a question of economic and social development as it is of national sovereignty.
“We are developing a strategy,” says Yonis Ali Guedi, minister for the sector. Developing this sector would enable the country to have the energy resources required to set in motion the impressive urban, port, and in the not-too-distant future, industrial infrastructures that have been emerging over the past 10 years, in a highly unstable sub-regional context.
Aware of the difficulty of this equation, Ismaïl Omar Guelleh (IOG) took up the issue in 1999. Only a few months after coming to power, the Djiboutian President secured the electricity interconnection project with his Ethiopian neighbour, which had been under discussion for several years between the two countries. It materialised in 2011 with the construction of a 283-km high-voltage line linking the Ethiopian town of Dire Dawa to the suburbs of Djibouti City.
“It represents 60 to 65% of the country’s electricity consumption,” says the minister. A second one is currently being completed to inject an additional 60 MW per day into the Djibouti network before the end of the year.
Electricity needs multiplied eight-fold by 2030
Despite this increase in available power, Djibouti has only have gained a short respite as electricity consumption continues to increase.
“Household demand alone is increasing at a rate of 10% each year,” says Guedi, without mentioning the connection of major facilities delivered in recent years and to be delivered in the future. “Today, the country’s daily needs are of the order of 120 MW, and could be 500 MW by 2025 and 1,000 MW by 2030,” says the minister, describing a problem that has yet to be resolved.
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“Now that the infrastructures exist, they must be supplied with electricity in order to go into production and, if possible, at competitive rates,” says a World Bank executive. If not, the country’s entire development model may need to be reviewed.
The presidency is therefore keeping a very close eye on the energy issue, not hesitating to indicate – on occasion – the direction to be followed. For instance, IOG stated at the 2012 World Energy Forum in Doha that his country’s objective “is to provide energy to all Djiboutians and to become the first country in Africa to be entirely reliant on green energy by 2025.”
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Everyone knows that the deadlines are unattainable, but a course has been set. This course is certainly not a random one, but one that takes into account the country’s own energy potential which, although it has no oil, does not lack resources, especially renewable ones.
And after having taken advantage of its geographical position to establish itself in the maritime and port world, Djibouti is now relying on its climate in the hopes of providing itself with abundant, cheap and, if possible, completely sovereign energy.
Prestigious partners and massive investments
Djibouti’s first step towards achieving its goal of 100% renewable energy is the Goubet wind power plant, which is expected to start its first full-scale tests in a few months. Built for $160m by the Spanish company Siemens-Gamesa, which is very active in Morocco, this installation should supply 60 MW to the national electricity network from the beginning of 2022.
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It is operated by Red Sea Power on behalf of the Nigerian-based pan-African investor Africa Finance Corporation (AFC), which has been joined by the Great Horn Investment Holding (GHIH), owned by the Port of Djibouti, for a 20% stake.
Djibouti’s other financial arm, the newly created Fonds Souverain de Djibouti (FSD), launched in mid-2020, has also taken a 20% stake in the solar project developed by France’s Engie in the Grand Bara desert. For an investment of $40m, this photovoltaic farm will have a capacity of 30 MW, which will be increased to 100 MW once production estimates are confirmed.
Djibouti is also exploring biomass opportunities. The government signed a contract in August 2020 with US investors CREC Energy to start production from the capital’s waste. For $150m, the project plans to reach between 35 and 40 MW of power from its future Damerjog plant within two years.
Huge geothermal potential
But the most advanced renewable energy projects are not necessarily the oldest. Ever since the Bureau de Recherches Géologiques et Minières (BRGM) completed the mapping of the country’s soils in the early 1970s, Djibouti’s geothermal potential, balanced along the great East African Rift, has continued to attract attention.
French, Italian, American, Icelandic, Turkish and Japanese experts have been drilling the salt crusts between Lake Abbé and Lake Assal for several decades, without success. This was before IOG took matters into his own hands. Impressed by a test he had witnessed in the 1980s, he came to the presidency convinced that the country’s energy future lay beneath its soil.
In 2013, the President founded the Office Djiboutien de Développement de l’Energie Géothermique (Oddeg), which is responsible for managing all projects related to this energy source. Three years later, faced with a lack of enthusiasm from international donors, he also allocated $2m to start research on the Gala’le Kôma site, which had long ago been identified by the BRGM.
The first drilling campaigns carried out on-site by Kenya’s KenGen confirmed the presence of an exploitable resource, as did the Fiale project, developed with help from Iceland, and the Hanle-Garrabayis project, supported by Japanese expertise.
According to Oddeg, Djibouti has between 500 and 1000 MW of geothermal reserves. This is the equivalent of what Kenya, the African champion of geothermal energy and an example closely followed by Djibouti, injects into its network each year. Like Kenya, Oddeg first set about reducing the costs of drilling, estimated at between $8 and $14m, by acquiring its own equipment and training its engineers.
Hydrogen, a serious possibility
“We bought a drilling rig from Turkey in 2017 for $12m, and about 100 engineers are being trained in China,” says Kayad Moussa Ahmed, director-general of the public body. To guarantee its operational independence, Oddeg launched the Red Sea Drilling Company (RSDC) in February. This company was “intended to develop the resource, at the best price,” says Ahmed, who hopes to bring the price of a kilowatt down to 17 Djibouti francs (Fdj), compared to 50 Fdj today.
“The next step will be to designate the operators of the various sites through calls for tender,” continues the head of Oddeg, who hopes that the first megawatts will be ready “in 2022.”
In the meantime, another issue may have raised its interest: the vast pocket of pure hydrogen identified in the bowels of the country. The subject is being closely followed in Djibouti, as well as in Paris, and was discussed during Presidents Macron and Guelleh’s meeting in February.
France invests more than $5bn each year in developing this alternative energy. A first delegation from the University of Paris already made the trip to Djibouti in 2019. A second one is expected to make another trip before the end of June, “to put in place a real strategy for the development of this resource which has yet to be quantified,” says minister Guedi, more than ever convinced that his country “has a role as an energy hub to play in the region.”
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