In a transformative move for Somalia—one of the world’s most expensive countries for electricity—a significant step has been taken to overhaul the energy sector. The World Bank-backed Somalia Electricity Sector Recovery Project (SESRP) reached a critical milestone this month, with reports indicating that electricity tariffs for households and businesses in major commercial hubs are nearing a 50% reduction.
For decades, Somali consumers have endured some of the highest electricity costs in Africa, primarily due to a fragmented power supply system and a total reliance on expensive imported diesel. This high overhead has long stifled industrial growth and placed a heavy burden on low-income citizens.
However, data as of March 2026 confirms that the deployment of “hybrid” power systems—integrating existing diesel power with solar energy and battery storage—is significantly lowering electricity prices.
Initiated with an initial funding of $150 million, this project is designed to modernize the nation’s energy infrastructure by focusing on four strategic areas. Key priorities include interconnecting independent power providers in Mogadishu and Hargeisa to reduce resource waste, and retrofitting aging diesel engines with solar power and Battery Energy Storage Systems (BESS) to cut fuel consumption.
Furthermore, the strategy involves providing independent solar power to over 200 health facilities and 380 schools to ensure essential services are not disrupted by volatile fuel prices. A primary strategic goal of the new project is also to reduce technical energy losses during transmission from 35% down to 20%.
Government officials emphasized that this tariff reduction is a core component of Somalia’s national strategy to generate 50% of its energy from renewable sources by 2028.
A representative from the Ministry of Energy and Water Resources stated: “This is not just about reducing bills; it is about ensuring national economic sovereignty.
By cutting costs in half, we are enabling every Somali business to increase its competitive and growth capacity by 50%.” With approximately 1.1 million households expected to benefit, the impact is profound.
Manufacturers in Mogadishu noted that lower energy costs will allow them to add work shifts and hire more staff, while rural clinics can now operate life-saving equipment 24/7 without the fear of fuel shortages.
Despite challenges such as the need to attract private investment and establish a robust legal framework, the World Bank’s latest report confirms that the project is on track for its scheduled completion in 2026.
