With an electrification rate of 12% and an unreliable and inadequate installed capacity of 133MW, Sierra Leone’s electricity sector is in need of investment and reform. The government is beginning to address the issue with a draft of the country’s first dedicated national renewable energy policy.
Of the 133MW of installed capacity in Sierra Leone, 77MW comes from thermal sources and 56MW from small hydro—meaning that nearly half (42%) originates from low-carbon sources. However, the country’s clean energy capacity has experienced difficulties. Its reliance on the 50MW Bumbuna Hydro project can lead to load shedding and blackouts during the dry season. In 2014, the 32MW Addax bioethanol plant was expected to begin injecting 15MW to the grid, but it has yet to be grid connected.
The country’s grid only covers Freetown, the capital, and two other isolated areas (Bo – Kenema and Makeni systems). To improve the electrification rate and grid stability, the Ministry of Energy has drafted a national grid development plan to 2030. This includes integrating the WAPP (West African Power Pool) line running from Liberia in the South to Guinea in the North (for which international funding has been secured), in addition to the mining districts in the East and the existing three grid hubs. Since domestic funding for the expansion is not available, there is scope for widespread adoption of distributed solar systems by citizens waiting for the grid. In May 2016 the president announced aggressive sales targets for 50,000 “solar units” in 2016 and 200,000 in 2017. To support a roll-out of off-grid solar the leaders of all chiefdoms are being educated about the benefits through strategy and awareness meetings. Meanwhile, to build trust in the technology and to ensure quality, the government - in communication with the Renewable Energy Association - will make products that adhere to IEC standards exempt from import duty.
Expansion of on-grid capacity is slow and will require significant private sector investment, but in order to realize this the government needs to streamline the PPA application process. In its current state it is reported to take as long as four years. In addition, a lack of familiarity with clean energy projects, excessive interest rates (>23%), and lending in volatile local currency, means that domestic debt facilities are unworkable for project developers.
The country is expecting that a new hydro project—the 202MW Bumbuna Phase II – will fulfil the bulk of its capacity expansion plans and is hoping for a successful resolution of its PPA negotiations with the developer, Joule Africa. If Bumbuna Phase II goes ahead then commissioning is expected no earlier than 2021 at an estimated cost of around $445m. Grid-connected solar is expected to materialize in the next two years following government power purchase agreements with two different developers – Mubadala Development Co. and SolarEra. Mubadala has secured a PPA for a 6MW plant due in 2017, whereas SolarEra has signed a PPA for a 5MW plant in 2017 and a 20MW plant due in 2018.
Since its separation from the national utility in 2015, EDSA (Electricity Distribution and Supply Authority) has improved its revenue collection by transitioning from post to pre-paid meters. Current penetration is estimated at around 50-70% of customers. This is particularly welcome news for investors, considering the off-taker risk and creditworthiness of PPAs for proposed clean energy projects in Sierra Leone.
Sierra Leone scored 1.35 in Climatescope 2016, which was significantly higher than in 2015. It placed 28th on the list of countries overall, and its best performance was on Clean Energy Investment and Climate Financing Parameter II.
On Enabling Framework Parameter I, Sierra Leone’s score rose slightly thanks to growth in installed capacity and the introduction of a number of energy access policies. However, this was not enough to prevent it from dropping down six places to 34th position.
The country was strong on Parameter II – its score rose threefold and climbed nineteen places to rank 8th overall. This reflected the comparatively high level of investment ($382m) between 2011 and 2015.
On Low-Carbon Business & Clean Energy Value Chains Parameter III, Sierra Leone maintained the same score as in 2015. This was supported by the presence of value chains in the biomass, biofuels and small hydro sectors.
On Greenhouse Gas Management Activities Parameter IV, Sierra Leone’s score jumped from 0.27 to 1.39, partly owing to the introduction of new carbon policies and increased carbon-offsetting activity.
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