The loan was provided under a development aid fund put in place the international development association (IDA), an arm of the institution, which gives loans to the poorest nations at a very low rate or none.
The loan will support the Benin Energy Improvement Project (PASE) through the country’s Electric Power Company (SBEE) in charge of electricity distribution in the country.
“This new project will help the Beninese government to meet an urgent demand to improve the reliability of energy services and, in the longer term, develop the sector in a sustainable manner,” a statement said.
“The project will contribute more specifically to optimizing the operational performance of the Benin Electrical Energy Company (SBEE) by limiting commercial and technical losses, maintaining a positive momentum for the biomass sub-sector and drawing up a roadmap for the progressive development of sustainability of the energy sector while strengthening the capacities of the main actors.”
The funds will also be used to improve access to energy in the peri-urban areas of Cotonou, Porto-Novo, Parakou and Natitingou.
Benin has been in an unprecedented energy crisis in the recent years. Only one major hydroelectric power plant currently functions.
The country however has a large hydroelectricity potential, but 85% of its electricity needs are answered by imports from Ghana, Cote d’Ivoire and Nigeria.