Monrovia – Karpowership says its engagement with the Government of Liberia is solely based on its technical capabilities and its experience as successfully demonstrated in countries of operations such as Ghana, Gambia, Sierra Leone, Sudan, Mozambique, Indonesia and Lebanon and not on political affiliation.
The company’s clarification comes just days after a FrontPageAfrica report suggested that Angela List, a Finance and Administrative Director of BCM International Group based in Accra, Ghana and a friend of President George Manneh was using her political muscles to push the Karpower and other cncessions through the cracks.
List is currently linked to a number of mining operations in Liberia and is said to be the main engine driving a controversial plan by the CDC-led government to hire a Karpower power barge that would sell electricity to the Liberia Electricity Corporation for distribution to Liberian consumers.
FrontPageAfrica reported last week that the Weah administration is currently in negotiations with Karpowership, a private electricity exporter, owner, operator and builder of the first floating power plant fleet in the world.
Under the plan, Liberia would enter into a ten-year contract in which it would purchase power from Karpowership even though it already has an absorptive capacity of only 24 % of current installed capacity at Bushrod Island and Mt. Coffee.
The issue is causing concerns within the international community with many stakeholders, who spoke to FrontPageAfrica on condition of anonymity in the past few days fearing 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.
President Weah recently vetoed the ratified Concession Mineral Development Agreement between the government of Liberia and Hummingbird Liberia Incorporated, returning the bill to the Senate with several recommendations.
List’s BCM is said to have interest in the Hummingbird concession, Putu Mountain and List and projects currently licensed to the Australian firm, Tawana Resources, which is currently involved in mining operations in the Mofe Creek project which has a Mineral Resource at 61.9Mt at 33% Fe.
Mr. Nathaniel McGill, Minister of State for Presidential Affairs when contacted by FrontPageAfrica recently said the agreement is not a secret and that a formal request has 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.
In its statement Monday, Karpowership notes that its Power Purchase Agreements are fully transparent, explaining that there are no hidden costs, all costs are included in the price. “The 16 cents per kWh figure that is mentioned in the news media is inclusive of all the costs associated with operation, fuel, salary, maintenance, spare parts and overheads without even another dime added to the end cost.”
The company in a Press release says Karpowership’s Power Purchase Agreement (PPA) is a standardized contract previously used in other countries and that Information disseminated in the news media referred to as Karpowership’s PPA is taken out of context and does not truly reflect the full terms of the contract under review by Karpowership and the Government of Liberia.
FrontPageAfrica has learned that 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.
The agreement states that Karpower will provide an accurate and secured Electricity Metering System on board the Powership reasonably acceptable to the BUYER. “The Electricity Metering System shall measure electrical output during testing, commissioning and thereafter and shall have an hourly energy recording capability of at least fourteen (14) Days. The Electricity Metering System shall operate within an acceptable tolerance of + [0.005] %. KPS will arrange for testing of the Electricity Metering System where the acceptable tolerance has been breached.”
Making reference to Karpowership’s undergoing projects in Ghana, Gambia and Sierra Leone, the company says the respective Governments, people of those countries and stakeholders are satisfied with the successful outcome of the projects.
“Despite the change of administration in most of these countries, the KarPowership projects were embraced by the new incoming administrations. All these projects are supported and financed by several development agencies, multilaterals, international institutions and signed off by the likes of the World Bank and several European and international government development agencies.
“Karpowership’s Power Purchase Agreements are fully transparent. There are no hidden costs; all costs are included in the price. The 16 cents per kWh figure that is mentioned in the news media is inclusive of all the costs associated with operation, fuel, salary, maintenance, spare parts and overheads without even another dime added to the end cost.
‘’Karpowership will bring these values into Liberia, thus jump starting the economy by reducing the cost of energy and creating immediate increase in employment.”
The company says it has and continues to successfully operate in several countries in Asia, Middle East and Africa in which it provides a significant percentage of the countries’ backbone electricity supply, especially in West Africa where these numbers reach as high as 80% of a countries total electricity generation, namely Gambia and Sierra Leone and 27% in Ghana.
Karpower has promised to address the challenges faced by government where significant portion of the end user tariff arises from theft and losses in distribution and transmission as well as the high cost of existing thermal generation.
The power supply group has also promised to solve the problem in two ways: 1. By contributing to the improvement of the existing transmission network so that the losses are minimized, and theft is prevented. 2. Provide reliable low cost thermal generation.
According to the company’s statement, diesel based generation has the highest cost of generation, exceeding 35 cents/kWh. Karpowership offers reliable, economic, fast track electricity via floating power plant, Powership of 36 MW to be connected immediately and jump start the economy.
The company says low-cost and uninterrupted electricity supply will boost industries and have an impact on job creation. ‘’All Karpowership operations around the world adhere to the highest industry standards and best practices certified by international agencies. Karpowership participates in corporate social responsibility activities, providing vocational on-job training to recent graduates, and provides scholarships to both boys and girls for continuing education in its countries of operations.
‘’Generations costs should be compared thermal to thermal and hydro to hydro. There should always be thermal power generation in the energy mix for reliable electricity especially due to the lack of electricity supply in the dry season. Karpowership does not offer to replace Mount Coffee Hydro Power Plant but offers to replace thermal generation with a much cheaper option that will lead to savings for Liberia.’’
The Karpower statement noted that Liberia has two main sources of electricity. Hydro during wet season and thermal during dry season. “The unit of electricity is written in kWh, kilowatt-hours. As previously stated the cost of electricity in Liberia before Powerships is 6 cents per kWh from hydro and above 25 cents per kWh from thermal. Karpowership is the energy company of a holding group established in 1948 and is purely focused on delivering economic and reliable electricity to all the countries in the world. It is an engineering and technology company, providing new and innovative ways to reduce the electricity price and enable fast delivery. Electricity supply has great strategic importance since it is vital for all industries and commercial activities.”
The company claimes that publicly available information hydro generation from Mount Coffee is 6 cents per kWh and thermal generation is around 25 cents per kWh. “Due to the high cost of electricity and unreliable power supply many major consumers such as hotels, businesses and factories prefer utilizing private diesel generators to secure electricity.”
Despite the company’s clarity, diplomatic observers say Liberia risks further alienating its international partners including the United States, Great Britain, the African Development Bank, the German Investment Bank, the European Investment Bank, the European Union particularly Norway who have invested millions in Liberia to restore electricity to the sector ruined by war.