By Abdi Sheikh and Abdirahman Hussein
MOGADISHU (Reuters) - A new solar power plant in Mogadishu should quadruple the city's generation capacity and cut bills, the owners said, providing relief to businesses facing crippling costs from diesel-generated electricity.
BECO, Somalia's largest electricity supplier, said it had been producing 8 megawatts (MW) since March using solar panels bought from Germany and Britain, and this was expected to increase to 100 MW by 2022, at a cost of $40 million.
"It is a risky business," chief engineer Mohamud Farah told Reuters, noting that a profit from safer bets such as investing in milk powder was almost guaranteed.
"But we are happy to be the first company to install solar energy to supply cheaper electricity."
BECO which also transmits and distributes power to Kismayu, Barawe, Marka, Balad, Jowhar, Afgooye, Elasha and Mogadishu, said the additional solar power in its mix had already reduced electricity costs to $0.36 per kilowatt hour from $0.49 per kilowatt hour.
The panels now supply power for four hours a day to its 300,000 customers, with generators providing electricity for the rest of the time, Farah said.
Farah said even once the solar power's installed capacity reaches 100 MW, the company will retain its generators, as solar power was not available all the time, particularly at night.
"Unless we get battery storage, we cannot stop using fossil fuel, and the cost per kilowatt hour when we get the 100 MW will still depend on storage batteries," he said.
Somalia, which plunged into civil war in 1991, has no national grid. Each major city is powered by private companies that largely rely on diesel generators, Abdiwahid Ibrahim Ahmed, the general director at the water and energy ministry said.
Mogadishu's total installed capacity is at 35 MW, against a demand of 200 MW, he said. Before civil war broke out, Somalia had a 70 MW installed capacity.
At present 85% of Somalia's population has no access to electricity, with 60% of them living in remote villages, Ahmed said.
Mogadishu's residents and businesses are desperate for cheaper power bills.
"I was selling drinks in a refrigerator just outside my house. I cancelled the business after two months. My profit was $20 a month but the electricity bill was $40 to $50 a month," Shukri Mohamed, a mother of four, told Reuters.
"I will restart my business if electricity becomes cheaper."
(Writing by George Obulutsa; Editing by Katharine Houreld and David Evans)