The U.S. International Development Finance Corporation''s (DFC) Deputy Chief Executive Officer (DCEO) Nisha Biswal and Chief Minister of Sierra Leone David Moinina Sengeh yesterday announced up to $412 million in financing and political risk insurance in support of the country''s plans to address rolling blackouts and expand its power system through renewable energy solutions in the future, according to statement by the US Embassy in Freetown..
DFC approved a new loan of up to $292 million to the Freetown-based Western Area Power Generation Project to help develop and upgrade the power plant''s infrastructure, promoting reliable access to power throughout Sierra Leone.
DFC will also provide up to $120 million in political risk insurance to crowd-in private investment. The financing package is bolstered by a $40 million loan from ECOWAS Bank for Investment and Development (EBID).
"Sierra Leone''s vision for a sustainable energy future is becoming a reality," DCEO Biswal said. "DFC is proud to support the country''s first, large, utility-scale, independent power project and lay the foundation for reliable and affordable electricity in Sierra Leone."
Project sponsors Milele Energy and TCQ Power are developing the project – the first utility-scale, independent power project in Sierra Leone, which will be constructed by Shapoorji Pallonji with gas and steam turbine equipment as well as long-term servicing, and operation and maintenance from Siemens Energy. The project will become Sierra Leone''s main source of power generation upon completion.
The Chief Minister of the Government of Sierra Leone said, "The Government of Sierra Leone is committed to providing reliable, clean, affordable, and sustainable energy solutions to support our national development efforts. We are happy to do so via innovative public and private sector programs like this one that prioritize impact. We will provide all the requisite support for this partnership."
U.S. Ambassador to Sierra Leone Bryan David Hunt said, "The Western Area Power Generation Project is poised to revolutionize Sierra Leone''s energy landscape, bringing opportunity to communities across the nation. Its impact will be profound, fueling progress, prosperity, and a brighter future for all Sierra Leoneans. The United States is proud to support this private sector initiative."
"The unwavering commitment shown by DFC and EBID to ensure that this transformational project is realized will improve the lives of millions of Sierra Leoneans," said Milele Energy CEO Erik Granskog.
"Milele Energy is dedicated to unlocking some of Africa''s most critical energy projects and we applaud the Government of Sierra Leone to conclude this project that will lower cost, improve reliability, and allow for the expansion of industrial demand."
"We are immensely grateful for this support from DFC and EBID that enables this next stage of development. It demonstrates their belief in, and commitment to, the people of Sierra Leone," said TCQ Power Limited CEO Karim Nasser. "We also extend our profound gratitude to His Excellency President Maada Bio for his steadfast support over the years. We are committed to delivering this sustainable power solution to the people of Sierra Leone and look forward to executing on the next steps and construction."
The U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, infrastructure, agriculture, and small business and financial services. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.
TCQ Power is a turnkey power project developer with a focus on early conceptualization tailored towards the MENA markets. Through strong cooperation with local governments and suppliers, TCQ Power aspires to mitigate risks at an early stage of development prior to breaking ground, thus lending credibility to sustainable, long-term, independent projects that are fully operable assets by the host nations at the time of handover.
While many may criticize the expenditure as frivolous in light of the nation’s struggles, the reality is stark: without investment, progress remains elusive. Despite the allure of alternative solutions, the question remains – who will champion their execution? It’s a grim predicament, forcing the populace to weigh the options and opt for incremental advancements in infrastructure and energy provision. Rome’s construction wasn’t swift, and similarly, Sierra Leone faces a lengthy road ahead, marked by gradual enhancements over the next two decades.
Credit must be given to Bio for securing this loan amidst the country’s dire circumstances, marked by soaring inflation, widespread poverty, and a dearth of investment and infrastructure. In this context, the Western Area Power Generation Project emerges as not just a necessity but a beacon of hope. Its successful implementation represents a pivotal stride toward addressing Sierra Leone’s pressing power needs. Moreover, it stands as a linchpin in propelling the nation towards economic prosperity, facilitating its transition to a burgeoning middle-income economy.
The United States'' International Development Finance Corp. (DFC) announced the approval of $412 million in financing and political risk insurance for a 126.5-MW West Africa LNG/combined cycle power plant project.
The power plant, the Western Area Power Generation Project, will be located in Sierra Leone''s capital of Freetown and is intended to help address the country''s rolling blackouts and expand its national electricity system to accommodate additional renewable energy solutions in the future.
DFC said the approved financing includes a new loan of up to $292 million to finance the development and upgrade of the power plant''s infrastructure and promote electricity reliability and access throughout Sierra Leone. The country''s power capacity is estimated at 150-MW with approximately 27.5% of the total population and about 4.9% of the rural population currently having access to electricity.
DFC''s financing also includes approximately $120 million in political risk insurance to bring in private investment to the project, which would be the first utility-scale, independent power project in Sierra Leone.
"DFC is proud to support the country''s first large utility-scale, independent power project and lay the foundation for reliable and affordable electricity in Sierra Leone," said Nisha Biswal, Deputy Chief Executive Officer at DFC.
Kenya-based Milele Energy owns a 50.1% stake in the project while Middle East-focused turnkey power developer TCQ Power, with a 49.9% share, is providing equity for the project. Mumbai, India-based Shapoorji Pallonji has been picked as construction contractor.
All the electricity generated from the plant will be sold to Electricity Distribution and Supply Authority (EDSA), the state agency responsible for the distribution and supply of electricity in Sierra Leone, under a 20-year power purchase agreement.
The second phase entails 43 MW of additional capacity from a second combined cycle power plant. Other work for the contractor includes upgrades to existing substations and construction of transmission lines to the existing electric grid.
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