Sierra Leone: World Bank Approves US$138m Project to Boost Electricity

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powerplantBy: Barnabas Thondhlana

World Bank Group has approved a project to support the development of a 57MW heavy fuel oil green-field thermal power plant in Sierra Leone to boost electricity generation and supply in Freetown and its environs.

This Project is responding to an urgent need for additional base load generation capacity in Sierra Leone. The Western Area Power Generation Project involves a total project cost of US$138 million jointly supported by the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) – all members of the World Bank Group. This Project can start operation within two years, displacing numerous expensive and polluting diesel-fueled generators in the Freetown area.

The project is the first joint World Bank Group operation in Sierra Leone. Together, IDA, IFC, and MIGA 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. IFC is also the mandated lead arranger of a credit line of US$70 million for this project.

According to World Bank Country Director for Sierra Leone, Henry Kerali, “The joint engagement of the World Bank Group will serve as an important signal to the 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 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 operation. We now look forward to successful implementation of the project”, he said.

The Project complements Bank policy dialogue in the energy sector that is focused on improving the operational and commercial performance of Sierra Leone’s newly established distribution utility – the Electricity Distribution and Supply Authority (EDSA).

The Government is in advanced stages of negotiating a management contract for EDSA with IDA support and the Government has committed to a series of reform measures that are designed to improve the financial viability of the electricity sector and, in particular, of EDSA.

In conjunction with ongoing and planned network upgrades under two ongoing World Bank projects – the Energy Access Project (EAP) and the Energy Sector Utility Reform Project (ESURP) – this project supports overall availability of energy and commercial improvements in Sierra Leone’s energy sector. It also facilitates the integration of renewables, in line with the World Bank Group Climate Change Action Plan 2016.


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