United States Signs $217 Million Agreement to Fund Power Plant
July 27, 2021
(DFC)
FREETOWN, Sierra Leone – In a letter dated July 14, 2021, United States
International Development Finance Corporation (DFC) committed to provide $217
million in debt financing for a new 83 megawatt power plant in Freetown. The
Western Area Power Generation Project (WAPGP), sponsored by Milele Energy and
TCQ Power Limited, will generate and sell electricity to the Electricity
Distribution and Supply Authority (EDSA) pursuant to a 20-year power purchase
agreement.
“DFC’s investment will substantially increase access to energy for
people all across Sierra Leone, providing power generation to meet approximately
24 percent of projected electricity demand in a country where only 15 percent of
the population has reliable access to power,” said David Marchick, DFC’s
Chief Operating Officer. “This highly developmental project represents the
United States’ long-term investment in Sierra Leone's future. We also look
forward to working on Sierra Leone’s transition to renewable energy sources
like solar and wind power.”
“This plant will increase Sierra Leone’s generation capacity
significantly,” said United States Ambassador David Reimer. “The power
generated will make substantial improvements in the lives and livelihoods of
Sierra Leoneans – allowing households to access power for the first time,
students to study at night and health workers to save more lives. This project
builds on the critical work accomplished during the Millennium Challenge
Corporation Threshold Program and will open up the energy sector to more private
sector investment.”
The Government of Sierra Leone, through His Excellency the President, Brigadier
Rtd. Julius Maada Bio, expresses its sincere thanks and gratitude to the lender,
the United States International Development Finance Corporation, mentioning that
"our presence in the project speaks volumes about our commitment to the
development of Sierra Leone." The Government thanked the Sponsors Milele Power
Limited and TCQ Power Limited for their relentless efforts and contribution to
the project and in realizing the Country’s National Development Plans. The
Government is deeply committed to accelerating energy access in the Country. The
Government is also pleased that "the project has been re-engineered into cleaner
energy that will enhance the nation’s resilience and response to climate
shocks by improving the management of climate disaster risks." The Government
commitment to this project as a baseload "will support the country’s post
COVID-19 economic recovery by providing electricity to the people of Sierra
Leone especially the Western Area, which is a critical part of the recovery
process. It also supports the replacement of costly fossil fuel generation
plants with low-cost cleaner power, which would free up scarce fiscal resources
for other urgent socio-economic needs."
Minister of Energy, Sierra Leone, Alhaji Kanja Sesay, expresses his delight,
appreciation and gratitude to all those who have made this happen. “This could
not have happened at a better time, especially as the largest power generation
project in our country. As a Ministry we are ready and look forward to actual
physical work to commence. I thank the sponsors and financiers for their faith
in Sierra Leone under the leadership of President Bio, and their resilience and
commitment to the project throughout the development process."
DFC’s financing of the WAPGP project is contingent upon certain conditions,
including that the Government of Sierra Leone enact implementing legislation for
the New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards under local law. Sierra Leone has acceded to the convention and ratified
it, and it is working to pass implementing legislation.
TCQ Power Limited CEO Karim Nasser stated, “the project is a monumental
step for the country and will unlock opportunities for all; it also demonstrates
the government’s ability to draw private investment into complex
infrastructure projects. All this would not have been possible without the
government’s implementation of bold and decisive reforms to make the energy
sector bankable and our lender's creativity in finding solutions that helped the
project become more bankable.”
“With the signing of the commitment letter, we have moved one step closer
to delivering critical and reliable electricity to the people of Sierra
Leone,” said Erik Granskog, CEO of Nairobi-based Milele Energy. “We are
grateful to TCQ, who has been working diligently on the Project since 2012 and
DFC for quickly appreciating the impactful nature of the Project and being a
proactive partner in its advancement. The Government of Sierra Leone has been
impressive in its implementation of bold and decisive reforms to make the energy
sector bankable, which demonstrates the government’s desire and ability to
draw private investment into complex infrastructure projects.”
“The United States Government congratulates the Government of Sierra Leone
on the signing of this agreement and the ratification of the New York
Convention,” stated Ambassador Reimer.
The project is expected to be commissioned fourth quarter of 2024.
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