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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