Interview: Yonis Ali Guedi
To what extent is the goal of 100% renewable electrification by 2035 achievable?
YONIS ALI GUEDI: Reaching 100% electrification from renewables by 2035 is achievable, as demonstrated by the upcoming commissioning of the 60-MW Ghoubet wind farm and the construction of the 25-30-MW Gran Bara solar power plant. It is also shown through the upcoming geothermal power plant following the confirmation of geothermal resources, particularly in the Asal-Fialé and Gala‘le Kôma sites. To support such projects, the government has made the energy sector a national priority to ensure energy security and sovereignty. We enacted a law that liberalises Djibouti’s energy production, allowing for the production of electricity by independent power producers. Finally, the Multisectoral Regulatory Authority of Djibouti can mediate matters among stakeholders in the energy field.
What role can the private sector play in securing the future of clean energy in the country?
GUEDI: The involvement of the private sector on the national and international levels is essential to the success of any countrywide project. For Djibouti, the government recognises the critical function of public-private partnerships (PPPs) in diversifying and enhancing the competitiveness of the economy. Nevertheless, the participation of the private sector in the development of Djibouti’s clean energy segment requires a concerted commitment to open dialogue and trust between the public and private sectors. Given the importance of fostering a robust private sector, Djibouti is open to investors interested in the energy sector.
How would you assess the progress being made on key hydrocarbons projects?
GUEDI: The Damerjog liquid bulk port is 78% complete, with the main structure on the working platform now complete. Another project that is garnering significant interest from large multinationals is the development of a second oil storage site in Damerjog for use by domestic and international companies, with an expected capacity of 500,000 cu metres. This project will enhance Djibouti’s capacity to amass a strategic stock representing three months of consumption. Given the volatility of petrochemicals prices, this strategic stock is of paramount importance, enabling Djibouti to overcome global supply constraints while guaranteeing its energy autonomy.
The proposed construction of the first liquefied petroleum gas storage facility, which is planned to have a 5000-cu-metre capacity, will further the energy transition. Ultimately, the objective is to give the International Hydrocarbons Company of Djibouti the ability to meet demand from the rapidly growing domestic market and neighbouring countries.
Which strategies are being used to overcome funding challenges for energy projects?
GUEDI: Access to financing remains the main challenge to major energy projects in Djibouti. This is due to several reasons, including the country’s limited resources for financing and the risk of increasing public debt by borrowing at high rates. This constraint is aggravated by external shocks such as the Covid-19 pandemic-induced recession and the war in Ukraine.
Nevertheless, the government has adopted strategies to ensure financing, particularly for renewable energy projects. Laws on independent power producers and PPPs permit private actors to participate in financing large-scale energy projects. PPPs are ideal because they facilitate efficient capital allocation without adding to the country’s public debt, and private investors provide the requisite financing and appropriate technologies. Electricité de Djibouti buys the energy at a given price, while the government provides the necessary guarantees. This model is supported by development partners, such as the African Development Bank and the UN Development Programme.
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