The country of Sierra Leone is situated in West Africa with a population of about 6 million; its economy has experienced a 13% in growth but has done little in economic development. According to the UNDP Sierra Leone remains among the world’s poorest countries, ranking 180th out of 187 countries in the Human Development Index in 2011. Decades of economic decline and 11 years of armed conflict had dramatic consequences on the economy. Poverty remains widespread with more than 60% of the population living on less than US$ 1.25 a day and unemployment and illiteracy levels remain high, particularly among youth. The energy situation there is quite the same old story across most countries in Africa, energy poverty is still being experienced and Modern energy consumption in Sierra Leone is very low and heavily reliant on traditional biomass. Government through various organizations has been working considerably to solve these challenges with the largest outcry coming from the business and manufacturing sector because the energy cost is greatly increasing the operation cost making their products less competent because of the price regime.
Recently the African Development Bank (ADB) as always has championed several projects across Africa and will go down as one of the organization that has done more even more than some gvts. ADB extended the financial arm for the Bumbuna hydropower plant meant to provide electricity to Sierra Leoneans and thus boost the economy was inaugurated on November 6, 2009. In an interview Samuel Onwona, Resident Representative of the African Development Bank in Freetown expressed confidence in the potential the power station possessed. Below are parts of the interview he had with AREA;
QUESTION: What are the immediate or short term benefits of Bumbuna for the economy and the people of Sierra Leone?
ANSWER: The immediate benefits the project brings to the economy are manifold. First, it brings self-gratification and national pride to the people of Sierra Leone, given the fact that for many Sierra Leonians, this project was a myth, and even those who were a bit optimistic about its completion, they never believed it would happen in their lifetime.
Second, the thermal plant under the emergency energy program was costing 44 cents per KWh compared to the Bumbuna cost of 10-12 cents per KWh. We, therefore, expect that the cost of doing business, especially in the manufacturing sector, will go down significantly. This means that Sierra Leonians who could not afford to buy generators for their small and medium scale enterprises will now be able to grow their business and generate both income and employment.
Third, Freetown will enjoy more reliable clean and affordable electricity along with the towns of Makeni, Lunsar and Bumbuna Township as transmission and distribution networks are properly rehabilitated.
Fourth, the Government can now redirect much needed resources used to finance the emergency thermal plants to other sectors such as agriculture, health and education. For instance, the fuel needed to power the thermal plant alone cost the Government a whopping $2.0 million per month, excluding the management fees for the experts running the plant. Clearly this was quite a burden for a post-conflict fragile state like Sierra Leone.
QUESTION: Bumbuna was initiated three decades ago. Why did it take so long? What were the key obstacles?
ANSWER: The reasons for the delay in completing this project are two-fold. First, it was the start-up delay with the studies. The first study was conducted in 1972 and was followed by second study in 1975. There was even a third study sometime in 1982, before calls for bids were finalized. The African Development Bank got involved in 1989 and approved our first loan in 1990. But just a year later, the ten-year war began. This was the second reason for the delay. We remained engaged until 1997 when the escalation of the war caused us to leave. The Contractor had to be demobilized even though the works were not completed. Equipment already installed and completed civil works deteriorated during the war period, leading to huge cost overruns.
QUESTION: What is the overall situation in the power sector today?
ANSWER: The situation in the power sector is far better today than what it was a year ago. We have assisted the Ministry to put in place an Energy Sector Policy which may go to parliament for approval soon. As I have alluded to already, this policy provides for the unbundling of the Generation, Transmission and Distribution of electricity over a period of time, so as to encourage private sector participation and engender a more efficient delivery of reliable, sustainable and affordable energy to power the economy.
Presently, there is no national grid, so that has to be an important priority along with the old distribution network in the Freetown metropolitan area. We need to assist the Government to create a competitive as well as conducive environment to attract Independent Power Producers (IPPs) into the sector because the public sector alone cannot do it
QUESTION: Are people willing to pay the price to get clean and safe energy?
ANSWER: The willingness to pay (WTP) is presently being expressed on a proxy basis by the way people cooperate to pay their electricity bills and recharge their power cards for those with prepaid meters. More importantly, the opportunity cost of not having reliable and regular supply of electricity for home consumption, schools, hospitals and private business has been quite high. If the Transmission and Distribution networks are sorted out and prepaid meters are installed to weed out illegal connections, this will ensure a more reliable supply of energy at a price much lower than the pre-Bumbuna price linked to the 44 cents per KWh cost of the thermal plant. In other words, we expect the post-Bumbuna energy price to be lower since the cost of generation is now well below that of the thermal emergency plant. The WTP will no doubt depend on the retail price that is finally set and the reliability of electricity supply.