Djibouti (2012)

Source: REEEP Policy Database (contributed by SERN for REEEP)

This policy & regulatory overview is not updated anymore since 2015. We decided to keep it online due to high demand but would like to make you aware of the fact that it might be outdated.

Energy sources

Total installed electricity capacity (2009): 118 MW
Diesel/Heavy Fuel Oils: 100%

Total primary energy supply (2008): 266.7 ktoe 
Oil and oil products: 68%
Biomass: 32%
Traditional biomass fuels, petroleum products and electricity have a significant share in the country’s energy mix. Total electricity production in 2009 was 335.0 GWh, solely from petroleum sources.
Peak production capacity is substantially lower than the installed capacity, as power generation is provided by ageing diesel and HFO engines. The city of Djibouti is the principal power market.  Over the long term, electricity demand has been increasing at a rate of three to five percent per year. The maximum energy demand for 2025 has been forecasted to be 810 GWh/yr. Electricity consumption per capita in 2009 was 394 kWh.
Close Energy sources


Djibouti has no indigenous sources of oil, natural gas, hydropower or coal. Energy self-sufficiency is estimated at 32.3%.

Oil consumption and imports were estimated to be 11,230 barrels per day in 2009. The majority of imported oil and oil products comes from Saudi Arabia. Construction of the country’s first oil refinery was completed in 2011. The refinery's five major products are LPG (2%), bitumen (18%), kerosene (22%), gas oil (23%) and naphtha (35%). The products of the refinery are sold locally, as well as in Ethiopia and Sudan. The refinery is also planning to export its products to Kenya and Uganda.
Close Reliance

Extend network

The national electrification rate in 2003 was 49.5%, and the electrification rate in urban areas was estimated to be 57% in 2006. The government expects 60% of the entire population to have access to electricity in 2015. No major developments to the indigenous transmission network have occurred since the colonial era, and its extent still limited, although power interconnections with neighbouring countries, particularly Ethiopia, have been developed in recent years. Close Extend network

Capacity concerns

Electricity production in Djibouti comes at a high cost, but service delivery is poor. Despite energy tariffs amongst the highest in Africa, and four times higher than in neighbouring Ethiopia, the national utility runs net operating losses, which have increased with the recent surge in oil prices. At the root of these problems is the dependence on imported oil, aggravated by large arrears from the public sector, and obsolete equipment. 40% of the electricity consumption in the country is represented by the public sector and remuneration for the national utility has traditionally been low. Cost recovery is also hampered by large technical and non-technical losses (for example illegal connections), respectively estimated at 10% and 6% of production. The financial situation of the company has resulted in insufficient maintenance and investment, and inadequate service, with frequent power cuts at peak times. The unreliability and shortage of supply means that businesses have to invest in high cost private generation. The Free Zone, a deregulated trading enclave in the country, has invested in its own diesel generator plant with associated separate infrastructure, which adds to costs. However, excess generation is not allowed to be sold back to the national grid and no power-purchase agreement frameworks exist.
70% of the population live in the capital Djibouti-Ville, and another 13% in secondary towns. Kerosene is in high demand for household needs such as cooking, but the volatility in petroleum products prices makes it very expensive. Electricity demand has been increasing at three to five percent per year. 
Close Capacity concerns

Renewable energy

Solar energy
Djibouti's location on the Horn of Africa is ideal for solar energy. Average daily insolation is 5.5-6.5 kWh/m2 over the whole country. The Japanese government has recently extended a grant for the installation of solar panels at the Djibouti Centre for Research and Studies, the state scientific institution. Djibouti has set a target of achieving electrification of 30% of the rural population by solar photovoltaics, by 2017. In addition, the government sees solar power as a key tool in electrification and development, and has set several technical and economic targets for the technology by 2017.

Wind energy
Studies conducted in the 1980s indicated that average wind speeds across Djibouti peak at 4 m/s, indicating a moderate potential for wind energy. Government studies in 2002 concluded that Goubet, at the entrance to the Gulf of Tadjourah, has the potential for a 50 MW wind farm, and that Gali Maab Wein and Bada also have significant wind potential. 
Biomass energy
With the majority of the country being semidesert, the potential for large-scale power production from biomass is expected to be of limited feasibility. However, no formal assessment has yet been made into the country's biomass potential. 
Geothermal energy
In 2001, an American firm, Geothermal Development Associates (GDA), completed a feasibility study for a 30 MW geothermal power plant in the Lake Assal region, west of the capital. EDD aimed to execute the $115 million plant using a Build-Own-Operate (BOO) model. With financing for the project finally put in place in 2008, Reykjavik Energy Invest (REI), an Icelandic company, is now poised to implement it, and the plant is expected to begin production in 2012, replacing some of the electricity currently generated using diesel. Drilling identification of other potential resources is also underway, with a great deal of interest from potential Indian and Chinese investors.
Djibouti has no hydroelectric potential.
Close Renewable energy

Energy efficiency

With distribution and transmission losses in the region of 16%, the potential for efficiency improvements in the electrical power sector are evident. The promotion of energy efficiency in the residential sector has also been identified as a key factor. Predominant use of traditional biomass resources for domestic purposes is regarded as inefficient and potentially harmful, particularly the predominant use of charcoal and kerosene for home lighting and cooking. The World Bank has made recommendations to the government of Djibouti to promote the use of bottled LPG as an alternative, as well as improved home energy efficiency.
Close Energy efficiency


Electricity market
Electricité de Djibouti (EDD,, a state-owned enterprise, has the monopoly on the generation, distribution and marketing of electricity in the departments of Ali-Sabieh, Arta, Dikhil, Djibouti, Obock and Tadjourah, while the rest of the country is covered by private firms. In 2008, a total of 39,246 subscribers were connected to the grid. EDD is unable to satisfy all domestic demand and the supply of power is frequently interrupted.

Liquid fuels market
The public limited company, Société Internationale des Hydrocarbures de Djibouti (Djibouti International Hydrocarbons Company, SIHD), a state-owned enterprise, and two other companies (Shell and Total) share the import market and, where applicable, the export, exploitation, processing, storage and marketing of hydrocarbons and their by-products. The Djibouti Oil Refinery is the only refining facility in the country and is currently 75% owned by the Al Brooge Security Company of the UAE.
Close Ownership


EDD is a vertically-integrated, state-owned company, responsible for the generation, transmission, distribution and sale of electricity in Djibouti, and has the primary responsibility for the development of geothermal resources for power generation.

SIHD is responsible for the import, export, processing and operation of hydrocarbon resources and products in Djibouti. SIHD is state-owned, and fully integrated in its operations. Co-operation between SIHD and public/private sector partners is encouraged in the establishing law No 65/AN/99.
Close Competition

Energy framework

The government’s goals are to:
(i) improve efficiency and financial performance of the electricity utility through loss reduction measures;
(ii) address key service delivery constraints through rehabilitation and extension of networks, and administrative improvements;
(iii) explore new resources for power generation (for example, renewable energy and interconnection with Ethiopia).

The government is also in the process of engaging in a comprehensive solar energy development plan, with various targets for dissemination of the technology, including:
(i) equipping 70 rural boreholes and 100 other wells with solar pumps,
(ii) equipping all rural health centres and 100 rural schools with solar arrays,
(iii) the electrification of 5,000 households with solar PV by 2017, increasing rural electrification to 30%.
Close Energy framework

Energy debates

In May 2010, Djibouti received a US$30 million loan for its 75 MW thermal electricity plant with the option to later expand to 300 MW.  The loan was provided by the Kuwait Fund and the Saudi Fund, with an additional $80 million being provided by the Islamic Development Bank and OPEC.

The government is in the process of replacing the majority of rural diesel water-pumps with sustainably-powered equivalents.
The Al Brooge Security Company, which currently holds a majority stake in the Djibouti Oil Refinery, is set to invest US$ 150 million in the refinery, in order to increase production volume from 40,000 bbl/day to approximately 100,000 bbl/day. The expansion is expected to start in early 2012.
Close Energy debates

Energy studies

Ethiopia-Djibouti Power Interconnection Project

Ethiopia’s power system is predominantly hydroelectric based and production costs are low. However, Djibouti’s power system depends on oil, whose cost depends mainly on the price of imported petroleum. As a result, the unit cost of power production in Djibouti is about four times higher than in Ethiopia. In the spirit of regional cooperation, and given the huge advantage for Djibouti in using hydropower from Ethiopia rather than indigenous, high cost thermal power, in November 2002, the countries signed an agreement to implement the interconnection project. 
In 2005, the African Development Fund (ADF) approved loans of US$30.4 million and US$25.6 million to Ethiopia and Djibouti respectively. The memorandum of understanding between the two countries for the power purchase agreement was signed in 2008, but the 25-year agreement took a further two years to finalise. In October 2011, the interconnection was finally completed and the two countries are currently developing a second phase of interconnection, also financed by the AfDB, for a 350 km, 230 kV line connecting the Koka and Dire Dawa substations.
Djibouti is also a member of the League of Arab States, and the African Union. In addition, the country is a member of the Common Market for Eastern and Southern Africa, and is a potential member of the East African Power Pool.
Close Energy studies

Role of government

EDD is the state-owned electric utility and is under the jurisdiction of the Ministry of Energy and Natural Resources, which is in charge of developing and implementing sectoral policies for energy, water and mineral resources. SIHD is also under the jurisdiction of the ministry. Close Role of government

Government agencies

Centre des Etudes et de Recherche de Djibouti (CERD)
The Centre de Recherché Scientifique de Djibouti (CERD) is the national institute responsible for monitoring and carrying out scientific and technical work in Djibouti. It is a semi-autonomous government agency that reports directly to the Office of the President. CERD provides technical support to EDD for geothermal exploration and the development of renewable resources.

In addition, the Social Development Agency of Djibouti (ADDS) has recently begun to equip schools, drilling wells and homes with solar photovoltaic panels.
Close Government agencies

Energy procedure

In 2009, UNEP in conjunction with the Global Environmental Facility (GEF) and the World Bank, launched the proposal for: Regional (Djibouti, Eritrea, Ethiopia, Kenya, Tanzania, Uganda); African Rift Geothermal Development Facility (ARgeo) which is a program of financial, policy and technical instruments for the promotion of geothermal energy development in these six countries.

Djibouti - Power Access and Diversification (2005-2013)
Funded by the World Bank, the project’s original objectives (PDOs) were to:
(i) increase access of under-served populations to electricity services, through investments in distribution, and electricity connections in Balbala (an area of the capital, Djibouti-Ville);
(ii) increase reliability of electricity services by introducing a pilot wind farm of an estimated capacity of 3.5 to 4.5 MW near Arta, West of Djibouti-Ville; and
(iii) improve the efficiency of the electric utility, through technical assistance, including an electricity tariff study, an electricity loss reduction study, and a commercial management study for the electricity and water sectors.
By the end of 2008, delayed progress in implementing the wind component coincided with a cash crisis at EDD. In the absence of proportionate electricity price adjustments, this crisis, brought on by record international oil prices, led to unsustainable government budget transfers to cover the costs of fuel, and to the risk of defaults by EDD in its payments to oil suppliers. As an emergency measure, in order to avoid the interruption of the operation of EDD’s generation plants, the World Bank agreed that savings from the wind component (US$4.9 million) be channelled into the purchase of heavy fuel oil and supplied to EDD.
The planned tariff study was cancelled as the African Development Bank (AfDB) had completed such a study in December 2008. The PDOs of the project were therefore revised as follows:
(i) to increase electricity access;
(ii) to ensure the emergency reliability of power generation; and 
(iii) to provide some diagnostic tools for improving the efficiency of the power utility.
A new substation has been built along the route of the 230 kV interconnection between Ethiopia and Djibouti, at the Ethiopian border town of Adigala. This substation includes a 230 kV line bay to supply Djibouti City, where a new 230/63/20 kV substation, equipped with 52/63 MVA transformers, has been built. Another 75 km of 63 kV overhead line was constructed to supply power to the border towns of Ali-Sabieh and Dikhil through a 63/20 kV substation, equipped with a single 12 MVA transformer.
Close Energy procedure

Energy regulator

The Ministry of Energy and Natural Resources has the responsibility for regulating the electricity and oil sectors in Djibouti. Close Energy regulator

Degree of independence

The Ministry is a government department, with funding being directly allocated from the national budget, and is hence, not independent. The Minister of Energy is appointed by the Prime Minister. Close Degree of independence

Regulatory framework

Act No.97/AN/00/4 on the re-organisation of the Ministry of Energy and Natural Resources, dictates the new structure of the Ministry to include a General Secretariat, in addition to 3 Directorates, for administrative and legal affairs, energy issues, and natural resources.

Close Regulatory framework

Regulatory roles

The Ministry is responsible for all policy and regulatory mechanisms relating to the electricity and oil sectors in the country, including the operational management of the national utilities. Close Regulatory roles

Energy regulation role

The Directorate of Energy within the Ministry is responsible for the development and promotion of renewable energies, the investigation of energy issues, the monitoring of compliance to regulations pertaining to the electricity and oil sectors, the award and withdrawal of licenses for market activities, and the collection and analysis of data for the preparation of a national energy policy. Tariff-setting for indigenous and international electricity sales is also the responsibility of the Ministry. Close Energy regulation role

Regulatory barriers

The establishment of clear development goals for the sector, including enabling legislation and policies pertaining to the promotion of new and renewable energy sources, would assist the development of RE in the country. Close Regulatory barriers


IRENA (2010) "Renewable energy country profile - Djibouti". [Accessed 28 July 2013]

MBendi: "Solar power in Djibouti: an introduction". [Accessed 31 July 2013]

Wind Energy and Electric Vehicle Review: "Djibouti had plans to develop its wind potential", 22nd May 2010. [Accessed 31 July 2013] "UAE firm to expand oil refinery in Djibouti", 9th August 2011. [Accessed 28 July 2013]

A Reform Program for Djibouti: "Reforming Djibouti's electricity sector". [Accessed 28 July 2013]

National Investment Promotion Agency: "Economy". [Accessed 28 July 2013] "Djibouti linked to Ethiopian power grid", 12th October 2011. [Accessed 28 July 2013]

Transmission and Distribution World: "Ethiopia and Djibouti strengthen ties", 1st July 2010. [Accessed 28 July 2013] Close References