Sierra Leone Telegraph: 1 October 2019:
The government of Sierra Leone with the support of the World Bank, is convening a two-day energy roundtable, bringing together key institutions in the energy sector and development partners, a statement published yesterday by the World Bank reveals.
The roundtable will discuss and assess the critical issues and challenges facing the country’s energy sector, and agree priority areas for intervention.
Sierra Leone’s electricity access rate at 16 percent is well below the sub-Saharan average of 30 percent. About 90 percent of customers are located in the urban parts of Freetown and only 30 percent of district headquarter towns are partially supplied, the statement says.
According to the World Bank, the country’s infrastructure deficit, especially energy, affects household welfare and severely impedes competitiveness, job creation and poverty reduction, while firms cite inadequate electricity provision as a major source of increased costs, disrupted production, and reduced profitability.
The energy sector has been facing financial difficulties, given the challenges encountered in generation, transmission and distribution activities, low collection rate – worsened by high prices of imported fuel and the depreciation of the domestic currency. The forum therefore comes at a highly opportune time, the statement reads.
“Every aspect of life in Sierra Leone — private and commercial — is affected by the known challenges facing the energy sector. The needs are too great for public financing alone. What is needed is a sustainable and credible least cost expansion plan that can leverage private and development financing in a complementary and systematic manner. Bringing all the key players in the energy sector together is critical to kickstart a sustainable turnaround of the sector,” said World Bank Country Manager for Sierra Leone, Gayle H. Martin.
Attracting private sector investment in the sector will depend on the ability of the distribution company acting as a credible off-taker for the power that is generated.
Given the serious and urgent challenges facing the sector, the World Bank says that the forum will discuss ideas on how the energy sector can be supported to achieve financial sustainability through improvement of the management of the Electricity Distribution and Supply Authority (EDSA), reduction of aggregated technical and commercial losses, implementation of least cost generation plan, and expansion of electricity access through both grid extension and off-grid solutions.
In addition to improving cost-recovery itself, improved transparency and accountability regarding cost-recovery data is critical to facilitating private solutions, the statement says.
The World Bank believes that regular publication of utilities’ annual financial statements, as well as their key operational and financial performance metrics, can go a long way in building trust and increasing the accountability of power utilities.
The World Bank Group has been a partner in Sierra Leone’s power sector and continues to support the Government’s agenda to reform the electricity sector to improve operational and commercial efficiency.
The World Bank’s energy portfolio includes projects amounting to US$150 million, notably a recent additional financing of US$50 million that was approved in May 2019.
Going forward and complementing the efforts of the African Development Bank and other development partners, the World Bank says it is exploring renewable options to support the Government’s efforts to provide electricity access to district capitals and other areas outside Freetown.
The Sierra Leone Telegraph has learnt that the country’s electricity distribution authority – EDSA, is running at a loss of Le311 Billion.
The authority says that it pays Le1,575 for every kilowatt hour of electricity and sells it at Le1,355. It says that electricity charges to customers would have to go up by as much as 56%.
Such increase would not only push up inflation to over its current 17.5%, but will also push access to electricity far beyond the reach of over 80% of the country’s population. And the consequences for economic growth through business diversification, will be immense.