The Government of Liberia and the European Investment Bank or EIB Thursday sealed a loan deal worth EURO 50 million (US$65m) as part of a financing arrangement for the Mount Coffee Hydro Power Plant rehabilitation.
The loan comes with a high concessional interest rate of 1.42%, amounting to US8m payable over the period of 20 years with 4-years grace period.
Government has put the total financing cost of the project to EUR186, 200,000 (US$242 million). Of this amount Government is providing US$47.1 million, while its European partners are contributing EUR150 (US195 million).
Norway and Germany have already committed their support comprising the grant component of EUR75 million (US$97.5 Million) and EUR25 million (US$32.5 million) respectively.
President Ellen Johnson-Sirleaf has made the rehabilitation of the hydro key to economic transformation and job creation here. The absence of a cheap electric power supply here has made investment very slow with many of those venturing here for business being put off due to the high cost associated with thermal power.
Finance Minister Amara Konneh signing on behalf of the Liberian Government said, while it is true that the hydro's rehabilitation will not solve all of the country's energy problems, it remains the "most pragmatic demonstration" of government's will to bring cheap electricity back to the country.
"The hydro is more than a power plant," he said. "It symbolizes a national infrastructure with economic and national security importance."
Minister Konneh said Government has already appropriated US10 Million in the Fiscal 2012/2013 budget. And of this amount, he said US3.1 million has been disbursed to the Liberia Electricity Corporation or LEC to begin setting up the Project Implementation Unit as well as hiring an Owner's Engineer to oversee the project.
He said the balance US37 million will be appropriated in the fiscal 2013/2014 and fiscal 2014/2015 budgets. The rehabilitation process which has already begun includes the reconstruction of the hydro plant to produce about 80 mw including the 66KV transmission line.
Singing on behalf of the EIB, the head of the bank's West Africa, Sahel and Caribbean Division, Mr. Gustaff Heim said he was pleased that his bank was back to do business with Liberia.
While urging the government to ensure that the funds are properly use for the implementation of the project, Mr. Heim recalled how images of the deliberated hydro power plant made the case for EU support, as officials (EU) felt move to assist Liberia just by seeing the image. Mr. Heim also gave an upbeat appraisal about EU's contribution to Liberia's debt relief porgram.