Liberia Races against Time to Benefit from CLSG Electricity Project as US$12m Debt to Cote D’Ivoire Still Pending
Abidjan – Last week, the World Bank in its annual business report, cited the lack of electricity as one of the key impediments to doing business in post-war Liberia.
Report by Rodney D. Sieh, [email protected]
The failure for government to provide electricity to millions in both rural and urban areas, coupled with bottlenecks and constraints experienced in attaining construction permits, getting credits, registering properties, protecting minority investors, paying taxes, trading across borders, enforcing contracts and solving insolvency, are just a few of the many frailties cited as key impediments as the George Manneh Weah-led government struggles to implement its much-touted Pro-Poor Agenda.
Electricity is not just a Liberian problem but a sub-regional issue as well.
Member states of the Economic Community of West African States(ECOWAS) came to the determination as far back as 2009 that one of our major constraints to development, to regional cooperation and integration was the lack of power.
That realization forced ECOWAS leaders to agree that natural resources were being constrained based on this lack of power and as a result, a stern effort was made to make electricity a priority in the four countries – Cote d’Ivoire, Liberia, Sierra Leone and Guinea, now set to benefit from a power-sharing arrangement, if all goes according to the plan.
The source of the power is Cote d’Ivoire which has the capacity to supply adequate electricity to its three neighbors.
The CLSG project was determined as the best means of trying to improve the level of available electricity to the other three countries.
The project became a priority of ECOWAS, and in 2013 under the chair of former Liberian President Ellen Johnson-Sirleaf and partnership with Sierra Leone and Guinea, became a reality.
“We were able to mobilize resources with the financial institutions.” The formal groundbreaking of the CLSG project was held in Liberia on June 4, 2017,” Sirleaf said recently.
Mr. Mohammed M. Sherif, General Manager of TRANSCO CLSG is confident of meeting the December 2019 timeline for at least partial commissioning of the line in Liberia.
“The donors have made tremendous investments, but if Liberia cannot afford to support its own company, not even to pay its own bills, the only thing LEC would have to do is test the line when it is connected and make some payments. But if the LEC is struggling to pay its monthly bills to its next-door neighbors, Ivory Coast which is the source of the power, I don’t see how they will come up with the cash by Christmas.”– A Diplomatic Observer, Speaking to FrontPageAfrica, on Condition of anonymity
CLSG On Course for December
Recent visits to Liberia by Sherif and his team assessed the transmission line corridor between Yekepa, Buchanan and Monrovia, the substations in Buchanan and Mount Coffee.
Sherif says is pleased with the level of construction activities especially with the substations. “We have made tremendous progress in the implementation of the landmark CLSG interconnection project. Significant progress has been made in the manufacturing of equipment, construction activities from the transmission line and substations that includes the stringing of the line in Cote d’Ivoire, Sierra Leone and Liberia,” the CLSG manager says.
In a bid to fast-track the project implementation, CLSG has launched a robust strategy known as the Acceleration Plan (AP) with the objective to deliver reliable electricity to Monrovia, Liberia by December 2019, and in Nzerekore, Guinea by March 2020.
Says Sherif: “We discussed and agreed on a revised project implementation calendar with the contractors associated with the Acceleration Plan. To ensure that these targets are achieved, these contractors have increased the mobilization of their teams and equipment on sites. The AP provides a platform for the management of TRANSCO CLSG and EPC contractors to dialogue and address the challenges in the construction of the 225kV transmission line contract between Yekepa and Buchanan.”
All this has been done, Sherif explains, in close collaboration with all parties involved in the project – the contractors, donor partners, the WAPP and other regional bodies including the OMVG.
For Sirleaf, the completion of substations along the Liberian coast will bring the first supply of electricity from Cote d’Ivoire to Liberia and integrate Liberia’s own system to complement the hydro, which is now functional to become a part of the whole integrated system of the four countries.
The CLSG project is expected to ease control of Liberia’s reliance on the Mount Coffee Hydro Plant which has been experiencing complications due to lack of water during the dry season.
With the connection coming from Cote d’Ivoire, Liberians should benefit immensely.
Additionally, in May the government of Liberia broke grounds for the electrification of the Pleebo to Fish Town Corridor, a component of the Liberia Energy Efficiency Access Project (LEEAP). The separate groundbreaking ceremonies were held in Pleebo, Maryland County and Fish Town, Rivergee County. LEEAP is a 31.8m project jointly funded by the African Development Bank (AfDB), the European Union (EU) and the Government of Liberia.
That project is expected to extend the lines but it is going to connect homes and businesses within Pleebo and Fish Town.
The project entails the construction of 66KV double circuit transmission lines from Paynesville to RIA; the construction of two new substations (66/22Kv and 66/33KV); the construction of medium and low voltage networks in communities along the ELWA – RIA corridor and the Pleebo to Fish Town corridor; and the connection of 45,000 new customers. The project is also developing the institutional capacity at the LEC, Rural Renewable Energy Agency (RREA), Environmental Protection Agency (EPA), and the Ministry of Mines and Energy (MME).
US$12M Debt to I. Coast Key for Liberia
Where it gets tricky for the CLSG project, is the issue of financing.
While the transmission line to Liberia from Ivory Coast and the substations are all being built by Transco/CLSG contractors, the Christmas deadline is poised to face some potentially huge setbacks.
At issue, in the eventuality that all the lines and substations are completed, the Liberia Electricity Corporation would then have to run its own generators for testing which will require use of fuel that authorities readily acknowledge, the LEC cannot afford unless the government of Liberia comes into the picture.
FrontPageAfrica has learned that the fuel cost could run well over $US400,000.
Complicated things even further, even if the CLSG is connected, the LEC will be require to make a $US12m payment owed to the Ivory Coast before it can start using the electricity, which it does not have.
LEC is state-owned. Thus, the government of Liberia would be expected to capitalize the company in order to ensure a smooth landing for Liberia in the CLSG project in December.
As one diplomatic observer, speaking to FPA on condition of anonymity Sunday, said: “The donors have made tremendous investments, but if Liberia cannot afford to support its own company, not even to pay its own bills. The only thing LEC would have to do is test the line when it is connected and make some payments. But if the LEC is struggling to pay its monthly bills, I don’t see how they will come up with the cash.”
In what some say was a small step to paying some money off the US$12 million owe Cote d’Ivoire, the LEC announced in June that it would commence the commercialization of the rural electrification grids in Grand Gedeh and Maryland Counties.
Following commercialization, residents and businesses connected to the grid in both counties will commence payment of electricity bills.
According to the management, customers, as part of the new arrangement are now being classified into two categories: metered and unmetered customers. The metered customers will be billed for payment at the end of month while unmetered customers will be placed on flat rate and an agreed amount will be determined based on a customer’s consumption or load. Metered customers will be charge US$0.25 per kilowatts/hour, and all payments will be made at the available bank(s) in Grand Gedeh and Maryland counties.
Payment of electricity bills will be made in both United States and Liberian dollars at the prevailing rate. Flat rate customers will be required to make payment between the 1st and 15th of each month. Failure on the part of any customer to meet up with said payment schedule, they will be disconnected and upon settlement of bill a reconnection fees will be charged. Metered customers will be required to make payment at the end of each month upon receipt of electricity bill.
The move, according to the LEC was necessary to enable the GoL to settle the huge arrears owed the Government of The Ivory Coast.
How the Project Works
If all goes according to plan, the project could change the way of life for residents in the four countries, increase trade, farming and business for millions.
As part of the project, the CLSG project is building a 225 kV Transmission Line in Cote d’Ivoire that will run from Man to Liberia border (contract of BOUYGUES ENERGIES & SERVICES linking MAN (Côte d’Ivoire) to YEKEPA (Liberia) and N’ZEREKORE (Guinee).
The rehabilitation of MAN Substation, Supply and Installation of Compensation equipment (SVC) in MAN, will serve as a supply and installation of a backup of the CLSG Dispatching (SCADA control center). Liberia:
In Liberia, the CLSG project is building the 225kV line going from Côte d’Ivoire border to Yekepa (LIB) up to the Guinean border (portion included in the contract of BOUYGUES Energies & Services (BYES), the 225 kV Transmission Line that will Link Yekepa to Buchanan (contract of ELECNOR & EIFFAGE JV) and Buchanan to Monrovia and Mano (contract of National Contracting Company (NCC).
In Sierra Leone, the CLSG infrastructures under construction comprises 225 kV Transmission Line that will Link MANO to KENEMA and BIKONGOR (contract of KALPATARU POWER TRANSMISSION LIMITED/Lot3) the 225kV transmission line linking BIKONGOR to BUMBUNA and YIBEN (contract of KALPATARU POWER TRANSMISSION LIMITED/Lot4), and the portion of 225kV line linking YIBEN (SL) to KAMAKWIE (SL) up to the border of Guinea.
The works in Guinea comprises a portion of 225 kV Transmission Line that goes from N’Zerekore/Guinee up to the border of Liberia (included in the contract of BOUYGUES ENERGIES & SERVICES (Lot1)), the portion of 225 kV transmission line that goes from Linsan/Guinea to the border of Sierra Leone (included in the contract of ANGELIQUE & TATA Project Ltd JV (Lot2)). Along with the 225kV substation of N’Zerekore (included to the contract of KEC International), supply and installation of the main CLSG Dispatching (SCADA control center) in Linsan (Guinea
The rural electrification, a sub-component of the CLSG interconnection project, will provide electricity to thousands of homes, hundreds of schools, health centers, community centers and places of worship that are within the vicinity of the CLSG transmission line.
This will help improve the performance of schools and health’s services, as well as increase the incomes of the people. Since this sub-component mainly has a social focus, the selection of localities is predominantly based on the geographical situation of the locality in relation to the route of the line and is limited to communities within few kilometers on either side of the 1,300km transmission line in the four countries. The increased electricity access will generally contribute to improving the welfare of the beneficiaries and lead to the development of social and income-generating activities.
Could Privatization Fix LEC’s Woes?
Last week, Mr. Augustus V. Goanue, speaking at the Ministry of Information, Cultural Affairs and Tourism’s (MICAT) regular press briefing, suggested that regulatory control may be in the cards.
The challenges facing the LEC he says could soon lead it to be managed by an electricity sector regulator—the Liberia Electricity Regulatory Commission (LERC). The LERC, according to Goanue, is now in the position to take over this sector of the country.
An Act to regulate electricity was passed into law by the Legislature in October 2015 and chapter 13 of that law gives birth to LERC. The Commission is mandated to regulate all electricity matters in Liberia.
“So, the LERC has not only been sitting there; we have been working very hard to make sure that the issue of sustainable, affordable, reliable and accessible electricity is provided in this country so that it can help to bring economic development,” he added.
The LERC is being supported financially by the Millennium Challenge Corporation (MCC) through the Millennium Challenge Account of Liberia (MCAL). The Europeans are also providing technical assistance to the Commission as well.
Goanue further said that over the past six to seven months, the LERC, along with its partners, has developed regulatory instruments, which will allow the Commission to carry out its mandate. Some of those instruments include the Licensing Regulation, the micro utility regulator (small operators), the licensing handbook and the Administrative procedure regulation among others.
With President Weah keen on fulfilling his inauguration pledge to make Liberia open for business, the CLSG project is his best route to jumpstart a major impediment to doing business and offering cheaper access to electricity for investors looking to come in. In his own words at his inauguration last January, “over the long term, private investment will be our key strategy to delivering transformation. We will work to relax constraints to private investment; strengthen the business, legal and regulatory environment, and protect business profits.”
For the immediate future, addressing his government’s indebtedness to Cote d’Ivoire or negotiating a payout plan could go a long way in giving Liberians the perfect gift for the holidays.