EDM–Albatros: “take and pay” or “take or pay”?

The concession contract for the construction and operation of a 90 MW heavy fuel oil thermal power plant, signed between the State of Mali and Albatros Energy, has gone through numerous twists and turns. Initially terminated in October 2024, the contract was reinstated on 18 April 2025. Among those close to the case, it is whispered that the “take or pay” clause lies at the heart of the tensions.

Concession contracts of this nature typically provide for a choice between a “take or pay” clause and a “take and pay” clause. The former obliges the State to pay for a minimum quantity of electricity, whether it is consumed or not, while the latter allows the State to pay only for the energy actually delivered and consumed. Each clause comes with its own advantages and drawbacks.

“Take or pay” offers investors a guaranteed return on investment, even in the event of weak demand or grid failures. This was the situation in Mali, whose electricity transmission system was not calibrated to absorb the capacity made available by Albatros Energy. By paying for unused electricity, the Malian State had to reckon with the strain on public finances—ultimately leading to the initial termination of the contract.

By B.S.