Finance Minister signs $75million Solar Emergency Power Project Financing Agreement with the World Bank

The Minister of Finance, Sheku Fantamadi Bangura, on 31st January 2023 signed a $75-million-dollar loan financing agreement with the World Bank for the Installation of a 40MW Solar plant and backup battery system in Sierra Leone.

This is part of the Regional Emergency Solar Power Intervention (RESPITE) project, the World is supporting four countries (Sierra Leone, Liberia, Togo and Tchad) with $311 to boast the energy sector, diversify the energy mix, reduce dependence on fossil fuels, and also to reduce the burden of electricity on our National Budgets.

The signing ceremony was attended by Ministers of Finance and Energy, Director Generals of Energy Utility companies of the beneficiary countries, senior World Bank staff, members of the West Africa Power Pool, the Private and witnessed by the President of the Republic of Sierra Leone, Rtd. Brigadier Dr Maada Bio and other development partners.

In his speech, the Minister of Finance in Sierra Leone said that the impact of the Russian-Ukraine war and the resulting increase in energy prices have led to significant financial challenges for the region, given the dependence on heavy fuel oil.

He added that Governments around the region had been forced to divert funds from impactful social programs into subsidies to the energy sector.

He alluded to the fact that the RESPITE project could not have come at a better time aimed at addressing the energy crisis in West Africa caused by poor infrastructure, high commercial and technical losses, and inadequate generation capacity.

He mentioned that subsidy to the energy sector had increased by more than five times in FY2022 against the allocated amount in the National Budget to compensate for the fuel price increase and enable the country’s participation in regional energy trade.

Minister Bangura noted that the allocated $ 75 million is expected to finance all costs associated with the installation of 30MW and 10MW of ground-mounted solar PV with battery storage at Newton and Lungi respectively.

“The grant would also finance the works associated with increasing the wheeling capacity of the existing Bumbuna transmission line from 70MW to 90mw as well as to support the project implementation Unit (PIU) which is responsible for managing the procurement of supervisory engineer(s) and preparation of any environmental and instruments” he added.

He went further to state that he is confident that the project will bring significant economic and environmental benefits to the country and the region as a whole.
Ministers of Finance from the other beneficiary countries also speak on the challenge they are facing with the raise in the cost of electricity and how that cost is affecting spending in other social sectors.

They also mentioned the fact that the RESPITE project will respond to both Energy and Environmental challenges the region is facing.

RESPITE will help reduce greenhouse gas (GHG) emissions by financing the installation and operation of approximately 106 megawatts of solar photovoltaic power with batteries and storage systems, 41 megawatts expansion of hydroelectric power capacity, and by supporting electricity distribution and transmission interventions across the four countries.

It also includes a regional approach, providing $20 million to help the West Africa Power Pool (WAPP) enhance the potential for power trade in West Africa and to facilitate knowledge sharing among ECOWAS member countries.