By Mabinty M Kamara
The World Bank Group on Monday announced the approval of a US$130m project aimed at boost Sierra Leone’s epileptic energy sector.
The money will go to funding ongoing efforts to stabilize generation of electricity in the Western area of the capital, Freetown and its environs.
The project is jointly supported by three funding arms of the Bank: The International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The project entails the development of a 57 Megawatt (MW) heavy fuel oil green-field thermal power plant.
Parminder Brar, World Bank Country Manager, at a press conference promised major progress in electricity sector as a result of the initiative.
85% of Sierra Leone’s populations doesn’t have access to electricity, according to World Bank estimation.
“And this is a fundamental economic problem to the manufacturing industry and education,” Brar told journalists at the World Bank Country Offices in central Freetown.
Sierra Leone presently relies on its Bumbuna Hydroelectric power plant which is barely functional for the most part of the year. The hydro is only effective to some extent in the rains.
According to a statement issued at the press conference, this project is the first of the Bank’s operation in Sierra Leone in which the three funding arms - IDA, IFC, MIGA – are successfully collaborating to arrange a comprehensive financial package, including an IDA guarantee in an amount of up to US$40million, an IFC loan in the amount of up to US$30million, an IFC interest rate swap representing a loan –equivalent exposure of up to US$3million, and a MIGA guarantee in the amount of up to US$60million.
Henry Kerali, World Bank Country Director for Sierra Leone, Ghana, and Liberia, said the joint engagement of the World Bank Group is an indication to the private sector that the country was prepared for investment even though it’s still recovering from the Ebola epidemic in the context of a fragile economy.
“We recognize the critical importance of sufficient and reliable electricity to support economic activities and job creation, and we welcome the increased access to energy to households and businesses in Freetown under the operations,” he said.
Electricity distribution has been a thorny issue for successive governments in Sierra Leone, especially in Freetown which is the major center of business activities in the country. This has made businesses, and individuals to heavily rely on generators as an alternative means of accessing electricity. Most times some areas in the capital go without electricity for days and in some instances the supply can be very erratic which has in many times caused the destructions of electric appliances.
The privatization of the former National Power Authority (NPA) heightened the expectations of Sierra Leoneans, but about since the completion of the unbundling process of NPA, hardly anything has changed physically.
According to the Bank’s statement, the 57 MW heavy fuel oil green-field thermal power plant project will complement its policy dialogue in the energy sector that is focused on improving the operational and commercial performance of Sierra Leone’s newly established Electricity Distribution and Supply Authority (EDSA). The government is in advance stages of negotiating a management contracts for EDSA with IDA support and the former has committed to a series of reform measures that are designed to improve the financial viability sector and, in particular, of EDSA, officials revealed Monday.
The project will be successful only if the financial and operational challenges of the sector are addressed adequately, said Brar, adding that the bank was working closely with the government and other development partners to ensure the project happened in a timely manner.
© Politico 19/07/16
