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Finance Minister Signs US$42.48M Loan Agreement to Boost Energy Sector

Finance Minister Signs US$42.48M Loan Agreement to Boost Energy Sector

Monrovia - Liberia’s energy sector received major boost following the approval of US$42.48 million, constituting a combined loan and grant financing agreement intended to facilitate the smooth implementation of the Liberian Energy Efficiency Project (LEEAP).

The project is being financed with the African Development Bank Group own resources from the African Development Fund (ADF), the Transition Support Facility (TSF), and the Nigeria Trust Fund (NTF), as well as from the European Union Africa Infrastructure Trust Fund (EU-AITF) and the Global Environment Facility (GEF) trust fund for which the Bank is the implementing agency and the Government of Liberia is the counterpart funding.

Contributions to the project includes: ADF US$12.75M; TSF US$5.68M; NTF US$9.56m; EU-AITF US$10.89M; GEFUS$2.518M, while the Liberian government will provide US$1.07.

The ADF and TSF components will mature in 40 years’ time with 10 years grace period while the NTF component matures in 27 years with 7 years grace period.

The Board of the African Development Fund (ADF) approved the loan on December 16, 2016 and was signed in February 2017 according to a recent ADF statement issued in Monrovia.

The MFDP release noted that the loan and grant financing agreement which was signed by Finance & Development Planning Minister, Boima Kamara on behalf of the Liberian government, will now be forwarded to the National Legislature for deliberations and ratification.

The LEEAP project has a four-year life span with preparatory activities that commenced in 2016 and is expected to provide a total of 13,000 electricity connections.

The release disclosed that an African Development Bank Group statement indicated that when fully implemented, the project will directly impact about 65,000 people who will gain access to reliable electricity, through the connections of up to 40,000 households.

The project will also provide training opportunity for at least 150 staff in the power sector as well as students in vocational schools across the country.

The LEEAP project further aims at increasing the Liberian population's access to electricity from the current 2% to 5% by 2019 while promoting energy efficiency and strengthening the institutional capacity in the electricity sector.

LEEAP is part of a larger multi-donor program aiming to improve access to electricity in Liberia.

This involves the construction of 46.1 km of transmission line and 280 km of distribution line in the corridors of the Roberts International Airport (RIA) said statement.

It serves as the extension of the EU financed cross-border electrification project from Pleebo to Fish Town in the River Gee County in Liberia’s south eastern region which is part of a larger multi-donor program to improve access to electricity in Liberia.

Funding comes from the Norwegian Government, the World Bank and the European Union, amongst other donors.

Additionally, LEEAP will expand the electricity transmission and distribution network in Liberia and improve electricity accessibility of the communities in the project’s zone of influence.

The release further quoted ADF statement: “At the conclusion of the project, 200,000 inhabitants are expected to gain access to reliable electricity supply and energy efficient products in household and public institutions.”

It will also promote energy efficiency in the country while at the same time improving the human and technical capacity of the energy sector by training skilled professionals.

Those expected to benefit through capacity building are engineers, technicians, maintenance and administrative personnel from LEC, MLME, EPA and RREA.

The Ministry of Lands, Mines and Energy (MLME) is the executing agency while the Liberia Electricity Corporation (LEC) is the implementing agency, says the statement.

The MFDP release concluded by indicating that the African Development Bank maintains its full committed to supporting the development of the energy sector of Liberia through current and future financing, co-financing or collaboration with other development financiers.

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