NAWEC Finance Director Says Technical Problems, Not Arrears, Behind Drop in Power Imports

By Makutu Manneh

Abdoulie Tambedou, the group finance director of the National Water and Electricity Company, has said that a decline in electricity imports from Senegal and Guinea is the result of technical problems, not unpaid bills owed by NAWEC.

Speaking on Kerr Fatou, Mr. Tambedou acknowledged that NAWEC has outstanding payments to Senegal’s SENELEC and Electricité de Guinée but said the arrears had not caused either utility to reduce electricity supplies to The Gambia.

He described NAWEC’s dealings with the two utilities as trade arrangements facilitated by the governments of the respective countries, adding that outstanding balances are not unusual in such arrangements and that NAWEC continues to make payments.

“But the drop in volume coming from Senegal and Guinea—the challenges are engineering, electrical, and mechanical breakdowns,” Mr. Tambedou said. “It has nothing to do with arrears being owed to them. We have arrears, but we are paying them. It is not that they stopped supplying us because of the arrears.”

Mr. Tambedou said NAWEC’s financial pressures have been compounded by rising costs and a regulated electricity tariff that was last increased in 2023.

The 30 percent tariff adjustment introduced that year provided some financial relief, he said, but much of that benefit has since been eroded by the depreciation of the dalasis. The dollar traded at roughly 59 to 60 dalasis in 2023, he said, compared with about 74 dalasis today.

The weaker dalasis has made electricity imports more expensive because NAWEC pays Electricité de Guinée in U.S. dollars and SENELEC in CFA francs, exposing the company to foreign exchange losses that have pushed up its cost of sales.

At the same time, electricity demand has risen sharply. Mr. Tambedou said peak demand was about 45 megawatts in 2017 and 2018 but has since climbed to roughly 140 megawatts.

For every 100 dalasis NAWEC collects in revenue, he said, about 80 to 85 dalasis goes toward the cost of electricity, whether imported or generated domestically. That leaves the company with a relatively small amount to cover its other operating expenses.

Government support helps offset some of the financial pressure, Mr. Tambedou said, but a funding gap remains. He attributed part of the problem to The Gambia’s relatively small market, saying the large investments needed to lower the cost of electricity per kilowatt-hour are difficult to make immediately profitable in a country with a population of fewer than three million.

As a result, he said, NAWEC has relied on smaller generating units, typically producing between five and 15 megawatts. Such units are less economical and contribute to the high cost of electricity generation.

With electricity tariffs regulated, Mr. Tambedou said NAWEC’s focus is now on reducing its cost of sales while finding the right balance between imported electricity and domestic generation.

He said the company has increasingly pursued that strategy since its contract with Karpowership was not extended.