Mali has secured about US$60 million in financing from the Islamic Development Bank (IsDB) to strengthen the electricity network serving its capital, Bamako, as authorities seek to stabilise a power system crippled by chronic outages and weak infrastructure.
The funding equivalent to roughly 36.1 billion CFA francs will support construction of the 225-kilovolt Northern Loop, a high-voltage transmission project aimed at boosting the capacity, reliability and resilience of Bamako’s overstretched grid. The project focuses solely on transmission and distribution, rather than power generation, targeting what officials see as one of the most persistent bottlenecks in Mali’s electricity sector.
Unlike conventional lending, the IsDB financing is structured in line with Islamic finance principles, which prohibit interest-bearing loans. Instead, the funding is asset-backed and project-specific, using Sharia-compliant instruments such as Istisna’a a form of construction financing and Ijara, which involves leasing completed infrastructure.
Under this structure, funds are disbursed in line with the delivery of physical works, limiting fiscal slippage and ensuring the money is used strictly for grid expansion rather than broader budget support.
The project is designed to help Bamako absorb more electricity from regional power interconnections, particularly those linked to the Senegal River Basin, where hydropower plants supply electricity across several West African countries.
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Although Mali is theoretically well positioned within regional power pools, weak and saturated transmission infrastructure has long prevented the capital from fully benefiting from imported electricity, even when supply is available elsewhere in the region.
The financing agreement was approved by Mali’s Council of Ministers on December 31, 2025, coming just weeks after the African Development Bank cleared an additional US$68.3 million package for the same project. Combined, the IsDB and AfDB commitments form part of an investment programme with a total estimated cost of about US$190 million, highlighting the scale of spending required to modernise Mali’s ageing electricity network.
Implementation and supervision of the works will be handled by state-owned utility Energie du Mali (EDM-SA). The project includes the construction of new 225 kV transmission lines, the expansion of existing substations and the development of new strategic substations around Bamako to improve redundancy and cut technical losses.
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Mali’s electricity crisis is often framed as a simple shortage of generation capacity. But energy sector experts say the problem is far more structural. Frequent blackouts in Bamako reflect not only limited supply but also weak grid architecture, poor evacuation capacity and heavy reliance on climate-sensitive hydropower.
During periods of low rainfall, hydropower output drops sharply, increasing pressure on thermal plants and imported electricity. Yet even when regional power is available, inadequate transmission capacity has prevented it from reaching consumers in the capital reliably.
By prioritising transmission rather than generation, the Northern Loop project aims to unlock existing regional capacity, stabilise supply and reduce load shedding in the short to medium term. Officials see the project as a faster and more cost-effective way to ease outages than building new power plants, which typically require longer lead times and higher financing.
The initiative also reflects a broader strategic shift in Mali’s energy policy, which increasingly recognises that adding megawatts alone will not resolve supply disruptions without parallel investment in grid infrastructure.
Restoring confidence in the electricity network has become a central economic priority, particularly for Bamako, where power shortages have weighed on businesses, public services and households. Reliable electricity is seen as critical for supporting urban growth, attracting investment and sustaining basic services in a country grappling with insecurity and economic fragility.
As work on the Northern Loop advances, authorities hope the project will mark a turning point in Mali’s efforts to build a more resilient and interconnected power system one capable of meeting rising demand and better integrating the country into West Africa’s regional electricity market.
