The Analyst (Monrovia)

12 October 2012

Liberia: World Bank VP On Speedy Implementation of Infrastructural Projects In Liberia

The World Bank’s new Vice President for Africa says given the huge infrastructure challenges faced by Liberia, a fragile state, it is imperative that the Government and its development partners be more proactive and aggressive to accelerate economic solutions for the country.

Addressing constraints in the procurement process of infrastructural projects, Mr. Makhtar Diop, a former Senegalese Finance Minister said the Government of Liberia and World Bank’s must fast track the process by leveraging companies in the African region through limited international bidding. This in his words, will minimize the challenge in receiving timely responses to bids for some infrastructural projects in Liberia
In a meeting with the Liberia’s Finance Minister Amara Konneh and team at the annual meetings in Tokyo Thursday, Mr. Diop acknowledged that the stake is high for Liberia to reach its pinnacle. Referencing the need for robust energy infrastructure in Liberia, Mr. Diop stressed the need for a joint team from the Government of Liberia and the Bank to convene in a special session to discuss all options for affordable energy in Liberia.
In addition to the ongoing effort on the Mt Coffee Hydro, he encouraged both the Liberian delegation and the World Bank team to make optimal use of their efforts by focusing on big solutions for energy so as to meet the pressing demand for energy in Liberia. The current demand for energy in Liberia stands at 250MW in the next three to five years; over 10,000MW beyond five years.

The Bank Vice President further suggested a new energy solution -“Petroleum Gas”, which has been pioneered by Qatar. “This option can be built quickly, but pricing is contingent upon the price of gas, however, it is surely cheaper than the current rates that attend Liberia’s current energy supply.”
Mr. Diop further admonished the Government of Liberia to partner with the International Finance Corporation (IFC) to make use of a Public Private Partnership (PPP) arrangement to address some of the huge infrastructural gaps, as the current and possible future International Development Association (IDA) allocations may not be totally sufficient.

Earlier, Finance Minister Konneh noted that the task of sustaining economic growth and development is daunting. However, he added that Liberia has made some progress, courtesy of the extraordinary leadership of President Ellen Johnson Sirleaf. Minister Konneh said currently, Liberia is prioritizing few key projects including energy which remains the country’s number one national priority.
Minister Konneh said because the resource envelop is too small, the current national budget was recalibrated to cut spending and put more money into capital expenditure that will create the fiscal space to induce development. “Currently the total production of energy in Liberia is 21 to 22 MW. There is no way we can grow the economy with that kind of number,” he hinted.

The Liberian Treasury Boss furthered that the total demand for energy today in Liberia is about 250MW. “Before the war, the (Mt. Coffee) hydro produced about 64MW. Therefore we need to do something about the energy issue quickly to encourage boom in small business activities and encourage manufacturing in the country which will also lead to creating jobs in our economy.”

Minister Konneh informed the Bank’s Executive that Norway, Germany and the European Development Bank have made some contributions to the rehabilitation of the Mt. Coffee hydro plant, but indicated the challenge now is to fill the financing gap. “Government has made serious commitment to the project in its 2012/13 budget,” he declared. In the budget, the Government of Liberia has allocated about $10 million and intends to continue this commitment over the next three years towards the rehabilitation of the hydro plant.
Also on the agenda was the Caldwell Bridge, which Minister Konneh described as a “death trap.” He appealed to the Bank Executive to expedite the rehabilitation of the bridge, considering it as a matter of national emergency. “The World Bank has been a key partner in our development effort and we look forward to your office to make the case for Liberia so we can have our infrastructure challenge under control,” Minister Konneh appealed.

He congratulated Mr. Diop on his new appointment and pledged to work with him to push Liberia’s development agenda to ensure macroeconomic stability, enhance security and jumpstart the process of economic transformation.

In response, Mr. Diop encouraged the Liberian government to “think big” and assured Minister Konneh that his office will help in accelerating the Liberian recovery process, particularly ensuring that current and pipeline projects are speedily implemented. He advised against investing in small increments of power (eg. 10 megawatts here and there) to rather employ effort in one major energy program that will cover Liberia’s energy requirements for a long term.

Mr. Diop pointed to the need to limit Liberia’s ambitions by apportioning resources to a few high impact projects that can be achieved between two to three years and avoid spreading investments in many sectors. “Where funds are invested in high impact projects, we can now create fiscal space for more Budget Support to cover our budget shortfalls,” the World Bank Executive said.

At the meeting, it was agreed to invite the International Finance Corporation (IFC) in the mix. The joint team of Liberia and the Bank agreed to hatch a plan within a month, to be approved and serve as the Road Map towards developing the country’s energy sector. Development partners, such as the Islamic Development bank, International Finance committee, Norway and the European Union will be targeted to support this endeavor.

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