Somalia’s growth is hitting an avoidable ceiling: the price and reliability of electricity. The country’s telecom sector—quietly swapping diesel generators for sunlight—offers a clear, local blueprint for how to lower costs, cut emissions and power a modern economy. If energy is the missing link, renewables are the bridge.
New research presented at the Somali Success Stories Forum in Mogadishu by The Seven Institute puts hard numbers to a daily reality. Somali families and businesses pay around 41 cents per kilowatt hour—roughly three times the regional average. Many households spend a third of their income just to keep the lights on. More than half of families say electricity consumes an excessive share of their budget, forcing many to turn to charcoal or wood when grid power is out of reach. That is a development tax no country can afford.
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There is, however, a path to relief. Forum discussions pointed to a simple but transformational target: consistent investment in renewable energy could reduce average tariffs to about 19 cents per kilowatt hour. That drop would reverberate across the economy—brighter classrooms, reliable refrigeration for medicines, safer nights for traders and longer operating hours for small businesses.
One of the clearest case studies is hiding in plain sight. Hormuud Telecom began experimenting with solar on a handful of towers to keep customers connected when fuel was scarce and costly. The trial worked. Today, nearly 90% of the company’s towers run on solar. Fewer fuel trucks, fewer outages, lower operating costs. The lesson is not limited to telecom; it’s about what happens when the cost of energy stops strangling basic services.
The link between clean power and digital infrastructure is already reshaping the economy. Hormuud now operates 11 data centers with a combined 10 megawatts of capacity; in some facilities, up to 95% of daytime energy is solar. Those data centers keep Somalia’s digital services online and prepare the ground for the next wave of growth—more data-driven services, AI-enabled tools and payments platforms that need power that is steady and affordable.
This is not only a private-sector story. At the same forum, BECO pledged $300 million to renewable energy, an investment expected to add 200 megawatts of capacity and cut emissions by more than 265,000 tonnes a year—about 13% of the sector’s total output. These are Somali-led moves that blend commercial logic with national interest: cleaner power, competitive tariffs and a sturdier foundation for growth.
The broader finance picture underscores the urgency. Global climate finance reached $1.3 trillion in 2022, yet less than 2% flowed to fragile states like Somalia. The mismatch is striking. Every dollar deployed in Somalia’s power sector stretches further, doing triple duty by cutting emissions, creating jobs and stabilizing local economies. The country’s systems are also ripe for efficient retrofits—hybrid mini-grids, distributed solar and digital tools that make networks smarter and more reliable.
Investors and development partners often see risk where they should see potential. The Somali market is young, connected and entrepreneurial. The energy demand curve is rising for all the right reasons—more phones, more data, more commerce. With blended finance and shared risk, power projects can be bankable. That means concessional capital to de-risk early stages, long-term offtake agreements where feasible and clear accountability for service quality and tariffs.
What would success look like for Somalia’s power transition? It would be visible in daily life and measurable across the economy:
- Families keeping more of their income as electricity prices fall and reliability improves.
- Clinics and pharmacies operating confidently with cold-chain storage for vaccines and medicines.
- Schools lit for evening study and connected to digital learning tools.
- Markets and micro-businesses extending work hours, expanding product ranges and hiring more staff.
- Utilities cutting outages and smoothing demand with digital management systems informed by telecom-grade data.
- Fewer diesel generators, cleaner air and reduced operating costs for businesses large and small.
To reach that outcome, Somalia can build on momentum already in motion. The telecom sector’s shift to solar shows that renewables work at scale when aligned with operational needs. The same principles—modular design, redundancy, data-driven maintenance and relentless focus on uptime—translate to mini-grids, commercial rooftops and community systems.
A practical roadmap would center on what the market is signaling and what communities need most:
- Scale distributed solar and hybrid systems that reduce dependence on diesel, prioritizing facilities with high social returns such as schools, clinics and water systems.
- Digitize the grid with smart metering and remote monitoring to cut losses, target maintenance and match supply with demand in real time.
- Mobilize blended finance to lower the cost of capital, pairing public instruments with private investment and clear performance benchmarks.
- Support Somali-led developers and utilities that have the local knowledge to build and maintain assets in challenging conditions.
- Anchor power projects to productive use—data centers, industrial parks, cold storage—so revenue is predictable and tariffs can fall sustainably.
The point is not to romanticize renewables or minimize the engineering and financial work required. It is to recognize that the economics are shifting fast in Somalia’s favor. Solar is cheaper than trucking fuel across long distances. Smart systems are simpler to monitor than sprawling, opaque networks. And a diversified, cleaner power mix is a hedge against the volatility that has long defined the sector.
Somalia has already proved the skeptics wrong in telecommunications, finance and digital services. The country built networks that connect millions, often in the absence of traditional infrastructure. Now it is building the power systems to sustain them—cleaner, more local and designed to last. With the right partnerships, price drops from 41 cents to near 19 cents per kilowatt hour are not wishful thinking but a reasonable horizon.
The missing link in Somalia’s growth story is not vision or enterprise. It is affordable, reliable electricity. The case studies are in front of us. So are the commitments. What is needed now is follow-through: finance that reaches fragile markets, projects that prioritize service quality and a steady pipeline of Somali-led initiatives that treat clean energy as core infrastructure, not a side project.
Somalia’s green digital future is already taking shape. Every day, a little more of the country’s power—and promise—comes from the sun.
By Ali Musa
Axadle Times international–Monitoring.
