Monrovia – Arrogance and ineptitude on the part of some key members of the George Weah-led government is said to have put the administration at risk of losing key financial assistance from the European Union and the Millennium Challenge Corporation, FrontPageAfrica has learned.
Report by Rodney D. Sieh, [email protected]
Liberia’s key international stakeholders have quietly been expressing concerns about the misplaced appointments made so far in the government, raising concerns about the nonchalant displays exhibited by senior officials in the administration toward some international partners which is said to be stalling a number of projects seen as key deliverables for the government’s pro-poor agenda.
One of those happens to be in the electricity sector where the European Union and the MCC have put off a Euro 42 million package aimed at rural electrification in President Weah’s stronghold in the South – East due to the delay in the appointment of commissioners overseeing the Liberia Electricity Regulatory Commission.
Euro 42M Tied to US$257 MCC Compact Money
On August 8, 2018, Mr. Augustus W. Goanue, Chair and Secretariat of the Rural Energy Working Group(REWG) submitted a letter to Lands, Mines and Energy Minister Mr. Gessler E. Murray in which the risks were clearly outlines regarding Liberia’s commitment to the rural electricity project.
The REWG is a consortium of energy sector stakeholders with the objective to ensure the successful implementation of the Rural Energy Strategy and Master Plan for Liberia(RESMP) and related programs/projects, by fostering close coordination and cooperation between concerned stakeholders – relevant GOL entities, civil society organization, local and international NGOs, the private sector, donors, and development partners. The REQG is chaired by the RREA.
Mr. Goanue, in the letter, now in possession of FrontPageAfrica wrote: “Most pressingly, appointment of the Commissioners will directly unlock postponed development partner Funding and technical support. Specifically, the REWG has learned that on June 26th, the EU postponed approval of Euro 42 million package of support for the rural electrification in the South-East, supported by the RREA, due to the prolonged delay in LERC’s Commissioners appointment. Additionally, the Millennium Challenge Account, Liberia(MCAL) support to LERC, as part of the $257 million MCC Compact, has been significantly scaled-down pending progress on the appointments, as has EU technical assistance to LERC.”
Mr. Goanue, writing on behalf of the Steering Committee of the REWG requested that the minister ensures the swift appointment of Commissioners to the Liberia Electricity Regulatory Commission(LERC).
Citing Section 13.1 of the 2015 Electricity Law of Liberia which provides clear direction with respect to the appointment of the LERC’s Commissioners, Mr. Goanue said, the stipulation provides of “one chairperson and two members” shall take place no later than October 2016(one year after the effective date of the law). These appointments, as legislated in the Electricity Law, need to be made by the President with Legislative approval.
A Matter of Urgency
Mr. Goanue informed the minister that the current three commissioners were appointed by the then-President, Ellen Johnson-Sirleaf, but were not confirmed until the transition to the current government.
“Since the incumbency of this Government, we have learned of no further action regarding the appointed commissioners.”
Mr. Goanue said the Appointment and confirmation of LERC’s Commissioner, as stipulated in 2015 Electricity Law of Liberia, is of paramount importance for the implementation of donors’ funded projects and full establishment of fledging Commission. “This would be a marked success for the new Government, as the matter is now urgent. It also presents a significant opportunity for the Government to impact longer term sector development, as a fully independent and functional regulator would send a strong, positive signal regarding the Government’s intention to improve supply and safety standards, address sector financial sustainability and attract critical private sector investment.”
The REWG head noted that the appointment of the Commissioners will directly unlock postponed development partner Funding and technical support.
In the absence of the appointed Commissioners, Mr. Goanue explained, the LERC is unable to appoint and on-board the necessary management and technical staff, as appointed Commissioners need to be involved in the recruitment and on-boarding of LERC’s senior management team, to avoid future staff disruption. “Thirdly, no sector regulation can formally be propagated without the Commissioners in place. There is a substantive amount of robust sector regulation – from licensing to mini-grid and grid codes – that needs to be formally adopted. The Acting Commissioners have provided helpful inputs toward this end, but cannot approve regulation in their capacity. A proper regulatory framework is critical to reduce investors’ perceived risk, improve the financial health of the sector and lower the costs of capital required for sector development, including projects under the RREA’s Rural Energy Sector Masterplan(RESMP).”
Given the importance of these interrelated issues, the REWG’s Steering Committee called for a status update on the appointment of substantive commissioners for LERC.
The delay in appointment of commissioner, sources tell FrontPageAfrica is being laid on the doorsteps of Mr. Nathaniel McGill, the minister of State for Presidential Affairs who is said to be insisting on submitting his personal list of appointees in a bid to push his interest in a proposal for a controversial Karpower electricity plan with a ten-year contract stipulation, through which Liberia would be buying power from Karpowership even though it already has an absorptive capacity of only 24 % of current installed capacity at Bushrod Island and Mt. Coffee.
McGill’s Defiance Tied to Karpower Play
That plan has not gone down well with representatives from a number of stakeholders, who recently confirmed to FrontPageAfrica on condition of anonymity that the signing of the agreement could lead to serious repercussions with the Millennium Challenge Corporation(MCC), the Norwegian government, the European Union, the World Bank and the German Development Bank.
McGill told FrontPageAfrica in July that the agreement was not a secret and that a formal request had been made to the National Investment Commission(NIC) and discussions are ongoing. “They( Karpower) want to provide current for 16 cents. Besides Karpower there are others who have expressed interest so it’s no secret. Go to the NIC the documents are there. The president has given no go ahead and the matter is with the NIC.”
While the actual cost is unknown, multiple sources confirmed to FrontPageAfrica that there are many hidden costs attached and the LEC will, under the contract terms, have to pay for all power produced whether consumed or not. At 50% current theft rate, the actual cost will be doubled if 16 cents is only a base cost, one source told FrontPageAfrica.
Currently, the cost of power at Mt. Coffee is set at 6 cents. The 35 cents tariff is necessary to cover operational cost, especially with 500+ employees and maintenance costs. The tariff would come down once the customer base increases. So, even if LEC buys at 16 cents, it would be unlikely that it would sell for that amount.
The deal is also said to have the weight of Mr. Ibrahim Mahama, brother of the former president of Ghana, who reportedly provided a fleet of vehicles as gifts and the use of his aircraft when needed. Mahama is also said to be good friends with Mr. Emmanuel Shaw, one of President George Manneh Weah’s principal advisors.
Under the terms of the power purchase agreement between the Ministry of Lands, Mines and Energy, the National Investment Commission(NIC), the Liberia Electricity Corporation(LEC) and KARPOWER INTERNATIONAL DMCC, KPS will provide electricity supply through a Powership to be located at Free Port of Monrovia, Liberia including the provision of operation, maintenance and technical services and construction of Electricity Connection Facilities, as well as the provision of fuel for the operation of Powership.
Minister McGill’s defiance is said to be putting Liberia at risk of losing Euro 42 million already on the table for an electricity project that could benefit scores of Liberians residing in the president’s stronghold in the southeast.
All three principle aides to the President – Legal Advisor Archibald F. Bernard and Finance and Economic Planning Minister Samuel Tweah have been in the know of the delay in the appointment of the commissioners for some time and it remains unclear why they have not prevailed the importance of the project to the president.
EJS-Era Deja Vu
Liberia has a long history of stalling and delaying commitment to donor projects. Several commitments won by former President Sirleaf failed to materialized because officials either failed to follow up or simply stalled projects over complicated bureaucracies.
It can be recalled that during the Sirleaf administration, the arrogant display of former Public Works Minister Antoinette Weeks led to the struggling post-war nation to lose millions from the ArcelorMittal mining company for the construction of the Ganta to Yekepa road.
Weeks was also blamed for Liberia nearly losing funding for the Somalia Drive road, financed by the Japanese government.
During her tenure, Weeks consistently came under fire and fought of numerous protests owing to her failure to continue several road projects. At one point, the Minister was public scolded by Sirleaf who said she had not felt the impact of Minister’s presence in the Ministry but it was Weeks’ toying around with the consultant sent by the government of Japan that drew the most criticisms, leading to the delay of the US$50 million project. Weeks reportedly told the Japanese diplomat that she was too busy to meet.
In an email to Minister Weeks from Mrs. Maki Okusa, Head of Office/Project Formulation Advisor Japan International Cooperation Agency (JICA), Liberia Field Office took issue with the Minister for delay the project: “Even though you will be out of town next week, the Consultant is still planning to come to Liberia, if there is a chance, to pay a courtesy call to you and also to assess the current situation of Somalia Drive. He is arriving on Monday evening and will leave on Saturday.”
The email went on, “I do not have your detail schedule of next week, but would it be difficult for you to meet with the Consultant even briefly if you are leaving town after Tuesday? He is arriving by Kenya Airways on Monday so if you have time, he will come to your office straight from the airport.”
Regarding the electrification project for the southeast, some stakeholders lament the imminent possibility of Liberia losing out on millions of euros for a project that could bring relief to many rural Liberians still living in the stone age due to the failure of President Weah’s principal aides and officials to fulfill their part of the bargain.