Country Report Senegal March 2011

Economic policy: Power cuts worsen in February

Since Karim Wade took control of the energy portfolio the frequency and duration of power cuts and load-shedding has actually worsened, according to most local reports. There are both structural and cyclical reasons for this. The electricity utility, Senelec, has struggled to secure sufficient fuel in the past two months to keep all its production units running. One of the triggers of the most recent energy crisis has been a stand-off between Senelec and one of its fuel providers, a local oil trader, International Trading Oil and Commodities (Itoc), which is holding 33,000 tonnes of petrol until an invoice of CFAfr2.8bn (US$5.4m) is paid by Senelec. The trading company demands a guarantee of payment before delivering and, as a result, the tanker is being held at the port of Dakar. Karim Wade and his father, the president, have tried to mediate and appease Itoc but without success, as the government is unable to free cash to allow Senelec to pay its arrears. The chronic cashflow problem facing Senelec is having a greater impact on electricity production now that the company is forced to look for alternative providers, given that, owing to capacity constraints, the recently privatised oil refiner, Société africain de raffinage (SAR), is unable to deliver all the necessary fuel. The structural dependency on petrol-generated electricity is one of the major constraints on power availability in Senegal.

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