In what Sierra Leone’s Minister of Energy, Kanja Sesay has referred to as “a game changer”, the United States International Development Finance Corporation (DFC) has committed to provide $217 million in debt financing for a new 83 megawatt power plant in Freetown.
A statement on the DFC website says that with sponsorship from Milele Energy and TCQ Power Limited, the Western Area Power Generation Project (WAPGP), will generate and sell electricity to EDSA as per a 20-year power purchase agreement.
“DFC’s investment will substantially increase access to energy for people all across Sierra Leone, providing power generation to meet approximately 24 percent of projected electricity demand in a country where only 15 percent of the population has reliable access to power,”DFC’s Chief Operating Officer, David Marchick is quoted as saying.
“This highly developmental project represents the United States’ long-term investment in Sierra Leone's future. We also look forward to working on Sierra Leone’s transition to renewable energy sources like solar and wind power.”
“This plant will increase Sierra Leone’s generation capacity significantly,” according to the United States Ambassador in Freetown, David Reimer.
He said the power generated would “make substantial improvements in the lives and livelihoods of Sierra Leoneans – allowing households to access power for the first time, students to study at night and health workers to save more lives”.
Ambassador Reimer said the project “builds on the critical work accomplished during the Millennium Challenge Corporation Threshold Program and will open up the energy sector to more private sector investment.”
Minister of Energy, Kanja Sesay is quoted as expressing his delight, appreciation and gratitude to all those who made this happen. “This could not have happened at a better time, especially as the largest power generation project in our country. As a Ministry we are ready and look forward to actual physical work to commence. I thank the sponsors and financiers for their faith in Sierra Leone under the leadership of President Bio, and their resilience and commitment to the project throughout the development process."
He told Politico that once the bureaucratic processes were cleared up, the project would start later in the year. He said the Office of the Attorney General and the Ministry of Finance would give their concurrence and he would later take the paper to cabinet and later to parliament. Parliament is on recess at present to resume in late September.
According to their statement, the DFC’s financing of the WAPGP project is contingent upon certain conditions, including that the Government of Sierra Leone enact implementing legislation for the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards under local law. Sierra Leone has acceded to the convention and ratified it, and it is working to pass implementing legislation.
TCQ Power Limited CEO Karim Nasser stated, “the project is a monumental step for the country and will unlock opportunities for all; it also demonstrates the government’s ability to draw private investment into complex infrastructure projects. All this would not have been possible without the government’s implementation of bold and decisive reforms to make the energy sector bankable and our lender's creativity in finding solutions that helped the project become more bankable.”
“With the signing of the commitment letter, we have moved one step closer to delivering critical and reliable electricity to the people of Sierra Leone,” said Erik Granskog, CEO of Nairobi-based Milele Energy. “We are grateful to TCQ, who has been working diligently on the Project since 2012 and DFC for quickly appreciating the impactful nature of the Project and being a proactive partner in its advancement. The Government of Sierra Leone has been impressive in its implementation of bold and decisive reforms to make the energy sector bankable, which demonstrates the government’s desire and ability to draw private investment into complex infrastructure projects.”
“The United States Government congratulates the Government of Sierra Leone on the signing of this agreement and the ratification of the New York Convention,” stated Ambassador Reimer.
The project is expected to be commissioned fourth quarter of 2024, the statement concludes.
Copyright © 2021 Politico Online (29/07/21)
