Press Release

United States’ Millennium Challenge Corporation, Government of Benin Celebrate Closure of Transformative Power Compact

WASHINGTON (June 22, 2023) – The U.S. Government’s Millennium Challenge Corporation (MCC) and the Government of Benin celebrated the completion of the $422.6 million Benin Power Compact, a five-year investment to advance energy accessibility and to strengthen Benin’s power sector. The investment is a $391 million grant from the American people and $31.6 million from the Beninese people. The compact is expected to benefit 11 million people over the next 20 years.

Today, MCC Chief Executive Officer (CEO) Alice Albright alongside the U.S. Ambassador to Benin, Brian Shukan, the Beninese Minister of State for Development, Abdoulaye Bio Tchané, the Minister of Energy, Water and Mines, Samou Seidou Adambi, and the Secretary of State for Energy, Edouard Dahomé, celebrated the end of the compact partnership together in Cotonou and inaugurated the new national electricity dispatch and control center built by the compact.

“MCC and Benin have been partners since the agency’s inception, improving markets and trade through a modernized port and expanding access to capital for small businesses. Today we mark another milestone in our longstanding partnership. Together with the Government of Benin, we have tripled the capacity of the national power grid and modernized Benin’s electric power sector to serve generations to come,” said CEO Albright. “More than 185,000 Beninois and growing now have access to electricity, enabling people and businesses to thrive.”

The Benin Power Compact has holistically improved the country’s power sector, from national policy and strategy, to regulation, to utility operations— creating inclusive economic opportunities and attracting private sector investment into renewable energy generation. The compact is also the largest U.S. government investment in solar off-grid electrification in a single country to date.

“Thanks to the joint efforts of the U.S. government and the Beninese government, disruptions to the power grid have been reduced, providing more reliable access to electrical energy for 11 million people over the next 20 years,” said Gabriel Dégbègni, National Coordinator for MCA-Benin II, the accountable entity for the compact. “This availability of efficient and reliable electrical power is essential to support robust economic growth, improve health services, promote education and strengthen business competitiveness.”

Energy Distribution and Generation The Benin Power Compact increased the country’s capacity to meet the national demand for electric power in a sustainable manner. By improving power infrastructure and prioritizing reforms, the compact:

• Created or rehabilitated 19 substations, serving more than two-thirds of national grid demand.
• Constructed or upgraded 878 kilometers (545 miles) of overhead and underground power lines, enough to stretch from Cotonou to Parakou twice (or from Washington DC to Atlanta).
• Built a national dispatch and control center, a first for Benin, for power distribution to connect 41 substations. This has made electric power service more reliable for utility customers.
• Trained woman entrepreneurs in the energy sector, providing management skills and networking opportunities. All participants in the Women Energy Entrepreneurship program reported positive changes, including rising sales, reduced costs, location expansions, and increased employment for women.

Access to Renewable Power Access to electric power leads to economic growth, as children can study after dark, hospitals can safely store vaccines, and businesses can expand operations. In Benin, MCC:

• Developed the first policy and institutional framework in West Africa for private investment in off-grid electrification. This framework has attracted $30 million in new investments into renewable off-grid power systems.
• Brought power to 185,000 people through support for the sale of nearly 37,000 solar home systems.
• Co-financed the construction of 55 solar mini-grids in rural communities, which is expected to benefit 110,000 additional people.

MCC has also supported Benin to move closer to energy self-sufficiency through a transaction for photovoltaic solar power plants with a total capacity of 50 MW spread across four sites in the country. These plants will further strengthen solar power generation and reduce reliance on fossil fuels.

The Benin Power Compact marks another highlight in the long relationship between MCC and the Government of Benin, which began in 2006. Together MCC and the Government of Benin first partnered through the $307 million Benin Compact, which concluded in 2011. This compact improved access to markets by rehabilitating the Port of Cotonou, increased access to land, provided access to justice in rural communities, and expanded access to financial services for micro, small, and medium enterprises. The partnership will now continue on beyond the Benin Power Compact. In December 2022, MCC signed its first regional compact with the Governments of Benin and Niger. This $202 million grant to Benin will rehabilitate the trade corridor from Niamey, Niger to the Port of Cotonou— allowing goods to flow faster and more efficiently.

The Millennium Challenge Corporation is an independent U.S. government agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants and assistance to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights.