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World Bank approves $50 million credit for energy sector

May 24, 2019

The World Bank has yesterday approved a $50 million International Development Association (IDA) credit for the Energy Sector Utility Reform Project (ESURP) to support improvement in the operational performance of the national electricity distribution utility.

According to a release from the bank, the additional financing is scaling up the investment activities of electricity supply in urban areas as well as increasing the capacity, efficiency, and reliability of the distribution network and connecting new residential, commercial, and industrial users in Freetown.

“It further seeks to build the capacity and develop human capital for the Ministry of Energy and other agencies for sector planning and policy formulation. The financing is fully aligned with the parent project and aims to further strengthen the commercial management of the Electricity Distribution and Supply Authority (EDSA) in addition to enhancing its management and staff capacity. It is the first additional financing for the project, bringing total IDA financing under the project to about US$90 million.”

“This support is consistent with the World Bank Group’s Country Partnership Framework for Sierra Leone (FY2019-2025) currently under preparation, which reiterates the focus on energy to support growth in various sectors of the economy,” said Gayle Martin, World Bank Country Manager for Sierra Leone. “The project will help increase the availability and improve the quality of electricity services for economic activities and job creation, thereby improving the living standards of Sierra Leoneans.”

The release stated that Sierra Leone has one of the lowest electricity access rates in the worl and that its main power network now consists of a 161kV radial single circuit transmission line (of 70MW capacity) connecting the existing Bumbuna hydropower plant to the distribution network in Freetown.

“The electricity access rate is about 16 percent, with about 90 percent of the 172,000 customers located in the urban parts of Freetown. Only five of the 16 district capitals are partially supplied by a combination of small diesel units and mini hydropower plants. The electrification rate in the vast rural parts of the country is almost zero.”

It observed that as improved technical and commercial performance of the distribution sector is critical to attracting private sector investment in the generation sector, the project seeks to improve the reliability and sufficiency of electricity supply so as to promote private investment in the industrial and business sectors.

It further stated that the additional financing was in line with the Country Systematic Diagnostic disclosed on April 4, 2018, which identified electricity access as one of the nine priority areas of potential intervention to address the binding constraints to increased economic growth and poverty reduction in Sierra Leone.

“It supports the implementation of the Maximizing Finance for Development approach laid out in the World Bank’s Development Committee paper by addressing the key operational issues of the distribution sector.”

The ESURP comprises three components: the first supports the establishment of a fully functioning and effective national electricity distribution utility; the second supports an extensive investment program for the rehabilitation and expansion of the national distribution network; and the third involves capacity building, project implementation, and project monitoring and evaluation.