Private Sector Fuels Mauritania's Renewable Growth

In 2023, Mauritania embarked on a transformative journey to revolutionize its energy sector, addressing decades of stagnation and paving the way for sustainable development. Recognizing the need to attract private sector investment, the nation enacted its New Electricity Code, a bold move to foster a conducive environment for bankable renewable energy projects and its development aspirations.

To translate this vision into tangible results, the Government of Mauritania, with collaborative support from PPIAF and ESMAP, initiated a comprehensive co-financed strategy guided by the Sustainable Renewables Risk Mitigation Initiative principles. This initiative focused on overcoming key barriers hindering private investment in Mauritania's nascent renewable energy sector.

A risk analysis identified key concerns for Independent Power Producers (IPPs) across the development and operational phases. This analysis highlighted the necessity for clear contractual agreements, particularly in Mauritania's frontier market. The 2023 Electricity Code effectively ended a two-decade reform freeze, promoting independent power production and addressing the long-standing lack of clear vision and commitments.

However, challenges persisted, notably concerning the creditworthiness of the national power utility, SOMELEC. The 'off-taker risk'—the potential for non-payment or contract termination—remained a significant concern.

Instruments such as guarantees or insurance, leveraging resources like the World Bank Group's Private Sector Window, were recommended to mitigate these risks. At the same time, a robust plan to improve utility performance—including digitalization initiatives and urban distribution network rehabilitation—was deemed crucial to enhancing system efficiency and financial stability.

The analysis identified a substation-based deployment scheme as the most optimal approach for Mauritania. This model offers advantages such as manageable unit power capacities, streamlined land acquisition processes, and the potential for multiple projects.

Developing a 'renewable energy-friendly' national transmission grid was also deemed vital to addressing weak infrastructure and curtailment risks—major barriers to scaling renewable energy. Developing the nascent transmission network would simultaneously address two key challenges: achieving universal access goals and enabling private sector-led renewable energy expansion.

The socio-economic prospects were promising. As more renewable projects come online, significant employment opportunities are expected—not only during the investment phase but also through long-term economic activity over the lifespan of these projects. Projections indicate that approximately 21,500 jobs could be created by 2030 and 50,500 by 2040, underscoring the transformative potential of the renewable energy sector.

The insights from this activity have already informed a new World Bank operation, the Mauritania Transmission Corridor Project (US$129 million), approved in January 2025. Specifically, the findings of the PPIAF activity supported the design of the operation's "Private Capital Enabling" component, which will finance transaction advisory services to support the Government of Mauritania in realizing its renewable energy project pipeline.

This initiative demonstrates how effective policy reforms and collaborative efforts can unlock private-sector investment and accelerate the transition to clean energy.