HARGEISA, Somaliland – The government of Somaliland has ordered a nationwide reduction in electricity prices, a move it says will deliver on a key presidential campaign promise and provide economic relief to households and businesses in the Republic of Somaliland.
In an official directive issued this week and obtained by The Saxafi Media, the Ministry of Energy and Minerals set a new uniform price of 0.59 U.S. cents per unit, a significant decrease from previous rates that varied by city. The policy, which exempts the port city of Berbera due to its unique operational framework, is scheduled to take effect Dec. 1, 2025.
The order, signed by Energy Minister Ahmed Jama Barre, frames the cut as the result of a new government-led bulk fuel procurement system designed to create efficiencies and stabilize costs for utility companies.
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The move directly fulfills a pledge made by President Abdirahman Mohamed Abdillahi ‘Irro’ to lower living costs in Somaliland, an independent republic that is not internationally recognized but maintains its own government and institutions.
“The Ministry of Energy and Minerals has been working hard to ensure that the country has access to cheap, safe, and reliable electricity,” Barre stated in the directive, citing a “decision of the President” as the driving force behind the reduction.
The announcement was met with cautious optimism by residents and business owners in the capital, Hargeisa, where the rate will fall from 0.79 cents to 0.59 cents per unit. For a country grappling with high energy costs, the policy represents a tangible, if delayed, government intervention.
“This is a welcome step,” said Abdirahman Ali, a shopkeeper in Hargeisa. “The cost of electricity is a huge part of our monthly expenses. Any reduction will help families and make it easier for small businesses like mine to operate.”
Analysts suggest the price cut is a strategic effort to stimulate Somaliland’s economy by lowering operational costs for its nascent industries.
“Affordable energy is a cornerstone of economic development,” said Anwar Mohamed, a regional economic analyst based in East Africa. “By reducing the tariff, the government is aiming to boost industrial productivity and attract investment. However, the long-term sustainability of this subsidy model, reliant on centralized fuel purchasing, will be the critical factor to watch.”
In his directive, Minister Barre contrasted the current reduction with a price increase implemented in 2022, which he noted was a response to rising global fuel costs. The new policy, he asserted, reverses that trend through state intervention.
The ministry has affirmed its commitment to broader plans for expanding access to affordable and sustainable energy, though specifics and funding mechanisms remain unclear. For now, citizens and businesses are looking toward the December 2025 implementation date, hopeful that the promised relief will materialize.
What we know about Hargeisa electricity
Hargeisa’s electricity supply is primarily provided by private companies, with SomPower being the major supplier, covering over 90% of the city. The system heavily relies on imported diesel generators, resulting in some of the highest electricity prices in the world and frequent power cuts.
Key Aspects of Hargeisa’s Electricity
- Primary Source: The vast majority of Hargeisa’s electricity is generated using diesel fuel, leading to high operational costs and environmental pollution.
- Cost: Electricity in Hargeisa is very expensive, with prices reaching up to $1 per kilowatt-hour (kWh), significantly higher than the global average.
- Reliability: Due to the reliance on diesel generators and the lack of a unified national grid, power supply can be irregular, with power blackouts occurring frequently.
- Infrastructure: The electricity infrastructure is managed by various private utility companies, and historically, individual generators were connected to exclusive feeder lines, leading to inefficiencies. However, initiatives are underway to synchronize generators and develop a common city grid.
- Energy Access: The overall electricity access rate in Somaliland is estimated at only around 15%.
- Renewable Energy: Hargeisa has high solar potential (averaging 6.4 kWh/m² per day) and significant wind resources, which presents a major opportunity for a transition to lower-cost, cleaner energy.
- Current Developments: Both the Somaliland government and international partners, such as the World Bank, are working on projects to increase access to affordable and cleaner electricity. These efforts include tendering for solar power plants with battery storage and developing regulatory bodies like the Somaliland Energy Commission to better manage the sector. The goal is to reduce reliance on expensive diesel and incorporate more renewable sources into the energy mix.
