By Mohamed Jaward Nyallay
The Electricity Distribution and Supply Authority (EDSA) has said it needs government to subsidize it up to the tune of Le300 billion in 2020. The power distribution body gave the forecast during the presentation of their budget and strategic plan for the 2020 Financial Year.
EDSA is a semi-autonomous state enterprise. As part of their functions they buy power and supply them to homes.
“The overall budget is just over Le800 billion and out of that what we can collect is just over Le500 billion. So we have something like Le300 billion that we expect government to subsidize,” Francis Nyama, the Deputy Director of the authority, explained to journalists after their presentation on Friday at the ongoing discussion on the 2020 budget.
Electricity is a major challenge in Sierra Leone. More than 75% of the country does not have access to power. In places where electricity is available, supply is unstable. EDSA said from 2018 to 2019 they increased their base by more than 38,000 customers. Despite this, the power authority say they are still running at a loss.
During their presentation, EDSA categorized the causes of the losses into technical loss, illegal connections and the high cost of buying energy for mass consumption.
Nyama said: “These losses include technical losses. Technical losses is basically on the tools you use, that one cannot be avoided. At international level, technical losses range from 12 to 13%, right now we are up to 15% and that is too much.”
He later added: “So we intend to reduce this to at least 14% by 2020.”
According to EDSA, another major impediment to their profit is the instability in the dollar prize market. EDSA transacts in dollar with power suppliers like Karpowership.
“Each time the Leone depreciates, we feel the pinch,” Chief Financial Officer, Everisto Gwaidza, said.
The value of the Leone has significantly depreciated over the last 18 months. The current leone equivalent to US$100 is just over Le9,500. This increases the amount EDSA pays to buy electricity from the power ships. EDSA’s budget show that 2020 they will spend over Le 547 billion in buying power from the ship.
The total cost of the power EDSA plans to buy in the next year is up by 23%.
In the past, they have considered the possibility of raising tariff, but the idea was not entertained by government. However, the power authority said it is working to extend its customer base and increase access.
“Our target is 30,000 customers (2020). As we speak now we have a project that started last year which is supported by WAPP. We are planning to install about 29 transformers. And these transformers also go along with customer data base increase. We are doing this all over the country, from Waterloo to Goderich. Once we commission that in 2020, we will get more customers,” Nyama said.
© 2019 Politico Online
