29 April 2013

Liberia Gets U.S.$35 Million Support for Energy Sector

It is becoming clear that the growing need for energy sector in the country is becoming an issue of concern to both local and international partners.

Following days of intense negotiations with global financial institutions and stakeholders, Liberia has managed to secure a US$35 million loan from the World Bank to expand the country's demanding energy sector.

This was disclosed in a statement issued over the weekend by the Finance Ministry.

The deal was brokered by Finance Minister, Amara Konneh during a recent high level World Bank-IMF Spring Meeting where Finance Minister Amara Konneh, leading a high power delegation, made a sterling case for continued support to Liberia's medium term development drive, the Agenda for Transformation (AfT). Out of the total US35 million World Bank loan commitment, $20 million will go towards the transmission and distribution lines from Paynesville to Kakata, Margibi County to provide access to electricity for about 18,000 new customers, while $11 million will go towards constructing facilities to off-load, store and pump Heavy Fuel Oil (HFO) for power generation. The remaining US$4 million will be used for capacity building at the Ministry of Lands Mines & Energy.

According to the agreement, the Liberia Accelerated Electricity Expansion Project (LACEEP) will finance a 66 kV sub-transmission line between the Paynesville substation in Monrovia and the city of Kakata, providing electricity to new customers that will include residential users, small businesses, institutional consumers, and a few agro-industrial customers. The HFO facilities will include a large storage tank in Bushrod Island, and a pipeline connecting the Bong Mining Company (BMC) pier of the China Union concession to the storage tank with a pumping station.

Commending the World Bank officials for the loan facility granted Liberia, Minister Konneh however reiterated that the total demand for energy today in Liberia is astronomical. "Before the war, the (Mt.Coffee) hydro produced about 64MW; today the demand is close to 250MW. Therefore we need to do something about the energy issue quickly to encourage production and manufacturing in the country, which will lead to creating jobs and engender strong and sustained growth in our economy," he stated.

The Liberian delegation also made strong case for the Bank's intervention in supporting the country's new development agenda under the Agenda for Transformation (AfT) by negotiating an increase in and frontloading Liberia's International Development Association's (IDA) credit allocations for fiscal year 2014 (FY14).

Meanwhile, the Government of Liberia has stated it will continue its talks with other potential partners to ensure funding is available for other infrastructure projects. The credit agreement with the World Bank will now go before the World Bank's Board in May of this year, after which it is expected to be signed and ratified by the Liberian parliament.

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