Economic Regulation of the Electricity Sector in Ivory Coast
On 1 January 2021, the 12-year agreement signed last October between the Government of Ivory Coast and the country’s integrated electricity utility CIE (Compagnie Ivoirienne d’Electricité) became operational, establishing one of the first incentive-based regulatory regimes in Africa.
FTI Consulting acted as advisor on economic and financial aspects to help achieve the Government’s goals: to improve quality of supply, increase cost efficiency and transparency, prepare for sector liberalisation, and establish a clear and dynamic remuneration mechanism.
In 2019 and 2020, FTI Consulting helped define an entirely new regulatory regime for the Ivorian electricity sector, aiming at improving service quality for the Ivorian population, reducing costs, and increasing accountability.
An Ivorian Electricity Sector Fit for the Future
The Compagnie Ivoirienne d’Electricité (CIE) had been the privately-owned electricity monopolist in charge of most of the electricity sector operations since 1990 in Ivory Coast. After several amendments, the agreement between the Ivorian state and CIE was due to expire in 2020.
To meet the challenges of a growing and more diverse electricity sector, the government wished to go beyond the pre-existing agreement and fundamentally renew its relationship with CIE. In particular, it wished to improve performance, expand electrification, increase cost accountability and transparency, achieve financial sustainability and prepare for the further liberalisation of the sector.
In 2019, Ivory Coast’s Energy Ministry, and its electricity sector supervising agency Côte d’Ivoire Energies, assembled a team of legal, technical and economic advisors, including FTI Consulting, to devise a new agreement between the State and CIE which would support the expected growth of consumption and deliver the framework to achieve the renewed objectives set for the electricity sector.