Finance Minister Amara Konneh Thursday (Jan 24) disclosed in Monrovia that the Government of Liberia and the European Investment Bank have completed the signing of a loan deal worth US$65 million to finance the Mount Coffee Hydro.
Liberia is expected to pay back the money in 20 years at the interest rate of 1.4 percent, meaning the country will have to pay about US$73 million. Liberia only three years ago graduated from a mammoth debt burden of at least US$5 billion, an amount the country would never pay back in generations.
Konneh said the loan will enable government starts the renovation process of the Mount Coffee Hydro which was destroyed more than 20 years ago as result of the Liberian civil war. The hydro powered the capital and its environs, but was systematically looted during the war years.
According to Konneh, a total of US$200 million is needed to complete the renovation work on the Hydro. In the same vein, he said Germany and Norway will give to Liberia in grant the amount of US$35 million and US$75 million respectively as support to rebuild the Hydro, while Liberia will make an annual contribution of US$15 million towards the project.
Konneh noted that the Hydro, when rebuilt, will produce about 80 megawatt of electricity, something he said will be bigger than 20 megawatts it produced prior to its destruction.
The hydro, when rebuilt, will enhance Liberia's economic transformation and make the country's energy sector more viable.
Liberia will pay the US$65 million in the period of 20 years at an interest of 1.4 percent. This means that Liberia will pay a total of US$8 million as interest for the 65 million.
Konneh and former Finance Minister Augustine Ngafuan (now Foreign Minister) led Liberia's campaign for debt waiver and promised that Liberia would not easily borrow again.
In 2010, when the duo returned from the IMF meeting where bilateral and multilateral partners agreed to forgive Liberia's bad debt, they announced that the country would not borrow any money more than the threshold US$40 million.
Konneh has however expressed confidence in Liberia's economic capability to pay the 65 million with interest without any problem.
The Mount Coffee Hydro is expected to be completed in three years. It is also expected by President Ellen Johnson Sirleaf that the hydro will be officially turned on December 20, 2015.