The World Bank has approved a whooping sum of US$138 million to support the development of a 57megawatt heavy fuel oil green-field thermal power plant to boost electricity generation and supply in Freetown and its environs.
The US$138 million funding came under the Western Area Power Generation Project, which is jointly supported by three members of the World Bank Group – International Development Association (IDA), International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA).
The project, according to the World Bank Country Manager, Parminder Brar, was in response to an urgent need for additional base load generation capacity in Sierra Leone.
Brar stated that electricity remains one of the biggest problems in the country and that 85% of the country’s population does not have access to electricity. “This project would redouble the supply of electricity in the country,” he said.
The country’s energy sector has benefitted from three projects, including the ongoing US$40m Energy Access Project, a US$17m Energy Sector Utility Reform Project, and the just approved US$138m Western Area Power Generation project – totaling US$195m.
In conjunction with ongoing and planned networks upgrades under two ongoing projects – the Energy Access Project and the Energy Sector Utility Reform Project – this project supports overall availability of energy and commercial improvements in Sierra Leone’s energy sector. It would also facilitate the integration of renewables in line with the World Bank Group’s Climate Change Action Plan for 2016.
“This is the first joint World Bank Group operation in Sierra Leone. Together with IDA, IFC, and MIGA we have successfully collaborated to arrange a comprehensive and complementary financial package, including an IDA guarantee in an amount up to US$40 million, an IFC A-loan in the amount of up to US$30 million and an IFC interest rate swap representing a loan-equivalent exposure of up to US$3 million, and a MIGA guarantee in the amount of up to US$60 million,” said Brar.
He said the project complements the Bank’s policy dialogue in the energy sector that focuses on improving the operational and commercial performance of the sector, adding that it would start operation within two years from now.
“This project would be successful only if sector financial and operational challenges are addressed adequately. The Bank is working closely with the Government and Development partners to ensure that this happens in a timely manner,” he said.
According to the World Bank Country Director for Ghana, Liberia and Sierra Leone, Henry Kerali, “The joint arrangement of the World Bank Group will serve as an important signal to private sector that the country is ready for investments even as it continues to recover from the Ebola epidemic in the context of a fragile country. We recognise 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 operation.”