The European Bank for Reconstruction and Development has launched its first investment in sub-Saharan Africa, approving a €30 million (US$32m) sovereign loan to Benin to expand electricity access and modernise the national distribution grid.
The loan to Société Béninoise d’Énergie Électrique (SBEE), the state power distributor, forms part of a €173 million (US$187m) rural electrification programme co-financed by France’s development agency AFD and the European Investment Bank (EIB), and backed by a grant from the EU’s Africa Investment Platform.
The programme aims to connect 120,000 households around 600,000 people across the Mono, Couffo and Borgou regions, extending reliable power to some of the country’s most underserved rural communities. The project will cover 750 villages and towns, where access to electricity remains patchy and often dependent on costly diesel generators.
According to the EBRD, the investment will modernise and densify medium- and low-voltage lines, introduce improved fault-detection systems and bolster the cybersecurity capacity of SBEE. The upgrades are expected to stabilise power supply, reduce outages and facilitate new commercial activity in rural areas, particularly for small enterprises and women-led businesses.
“This transformative investment will help expand access to reliable electricity for thousands of families,” said Dasha Dougans, the EBRD’s head of operations in Benin. “It will also strengthen the resilience and sustainability of Benin’s energy infrastructure, which is fundamental to accelerating rural development and unlocking economic potential.”
The loan marks a significant geographical expansion for the London-based lender. Created in 1991 to help former Soviet economies transition to market-based systems, the EBRD later widened its mandate to include North Africa and the Middle East in the wake of the Arab Spring.
Benin became an EBRD shareholder in 2024 and was formally approved as a country of operation in July 2025, opening the door for financing in energy, transport and private-sector development. Until now, the Bank had concentrated its African activities in Morocco, Tunisia and Egypt, as well as the West Bank and Gaza.
The move into sub-Saharan Africa mirrors rising European interest in deepening economic and development engagement with the region, particularly through critical infrastructure that can attract private investors and improve long-term growth prospects.
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Benin’s electrification push
The government of President Patrice Talon has made energy reliability a centrepiece of its infrastructure agenda. Although Benin has made progress in expanding grid coverage, roughly half the population remains without electricity, with rural areas facing the biggest gap.
The country relies heavily on electricity imports from neighbouring Nigeria and Ghana, exposing households and industry to frequent supply shocks. Upgrading domestic transmission and distribution capacity is seen as essential to reducing losses, improving energy security and supporting industrial zones.
By increasing grid density and boosting the quality of power lines, the project is expected to help Benin meet national electrification targets while creating new opportunities in agriculture, small-scale processing, retail and public services such as health centres and schools.
Beyond energy, the EBRD says it plans to support critical infrastructure that underpins private-sector growth and to help modernise local enterprises. The Bank is also expected to back governance reforms aimed at improving the efficiency of state institutions and boosting investor confidence.
For Brussels, the project forms part of the EU’s wider Global Gateway strategy, which seeks to counter China’s influence by scaling up European-backed infrastructure in Africa.
The electrification programme, EU officials say, is designed to have immediate social impact while laying the groundwork for larger future investments in transport, renewable energy and digital infrastructure.
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Benin’s government has welcomed the EBRD’s entry as a sign of growing confidence in the country’s economic reforms, which include fiscal consolidation, improvements in public finance management and efforts to expand the business climate.
With the deal signed, construction on the first grid extensions is expected to begin in the coming months, with the full programme slated to connect hundreds of communities by the end of the decade.
