-Says it cannot finance electrification projects
LEC Boss Monie Captan
The Liberia Electricity Corporation (LEC) has rallied the Government of Liberia to strengthen its budgetary allocation with US$12.6 million, to enable them to exhaust the electrification of about 33,768 households which are considered as the Gap (37) Communities.
The LEC made the call recently in a release on its performance initiatives and challenges.
According to the corporation, the government of Liberia is the sole shareholder of LEC, therefore, it must make budget allocations to improve its electrical infrastructure.
The corporation emphasized that even though development partners will help them to invest its operations must be government-driven and owned.
“Connecting the remaining communities will cost approximately US$12.6 million. Despite its best intentions and efforts, LEC cannot raise sufficient resources to finance electrification projects. It is better to reserve its operating capital, the hitherto source of funding the program, for the maintenance and operation of the national grid.,” the LEC stated.
Therefore, the LEC revealed that unless the government or donors fund the initiative many communities will remain deprived of access to electricity. “LEC urges the Government to make budgetary allocations to connect these gap communities,” the released statement.
However, the LEC has also revealed that it is confronted with three major challenges that must be addressed to ensure its commercial sustainability and the supply of adequate and reliable electricity.
According to them, the first, which most undermines the financial sustainability of the corporation, is power theft emphasizing that despite the unparalleled progress made over the last eighteen months, the corporation’s commercial losses are still among the highest in the subregion.
“We know the extent and nature of the problem, and we know how to tackle it. What we require, in addition to our initiatives and efforts, is the enforcement of the Anti-Power Theft Law. We also need the support of every citizen to protect the electric network from unauthorized tampering and illegal connections. Power theft affects us all because it undermines LEC’s capacity to buy fuel to generate sufficient electricity or pay for energy imported into the country. Secondly, as the grid expands and demand grows, LEC’s network is reaching its optimum capacity, requiring upgrades in network capacity to improve network performance. This will require an upgrade of transmission lines and substations and the replacement of transformers. Such an upgrade is heavily capital-intensive and will require government investment in the electricity infrastructure. Many electrical grids within the subregion have gone through years without additional investment, contributing to inefficiency and underperformance. Lastly, the most pressing challenge is that demand has exceeded the electricity supply, especially in the dry season when hydro production is low and consumption increases. Consequently, there is a supply gap requiring load shedding. Filling this gap requires significant capital investment and time. Increasing the generation capacity takes money and time. Even when all the money for a power plant has been secured, it would take years to procure and build the facility,” the LEC noted.
Meanwhile, the Liberian management of LEC also mentioned that beyond money and time constraints, the corporation must select a source of generation that is affordable, renewable, and climate-sensitive as such since the inception of the Ukraine War, fuel prices have increased dramatically, rendering the operation of fossil-based fuel generators unaffordable and a recipe for huge and uncontrollable financial losses which peril is in addition to the impact of such power sources on carbon emissions and climate change.
The release continued: “LEC has adopted a strategic generation plan to pursue a Hybrid Renewable Energy Integration solution, mainly pairing hydropower projects with solar power projects. Under the World Bank RESPITE Project, LEC and the Government of Liberia have received financing totaling $96m for the expansion of Mt. Coffee by more than 50% of its current capacity and the construction of Liberia’s first-ever utility-size solar power plant. The solar power plant will be designed around a 20MWp capacity and located at Mt, Coffee. The procurement process for the solar plant is 50% completed, and the contract should be awarded by 2nd Quarter of 2024. Bid documents for the expansion of Mt. Coffee will be completed in 2024. Additionally, a new hydropower plant is planned for upstream of the St. Paul River, known as SP2. The feasibility study should be completed by quarter 4 of 2024, and about 150 MW capacity is anticipated. SP2 will form a part of a planned cascade of hydropower dams along the St. Paul River, which will be serviced in the future by a storage reservoir at the confluence of the Via and St. Paul Rivers. The project is estimated to cost around $550m and has already attracted interest from the World Bank and a commitment to fund approximately 50% of the project cost”.
Furthermore, the corporation said with exponential demand growth, the electrical network is stressed, putting pressure on already constrained conditions as such customers demand more and better service quality, and yet the competing demands on LEC’s limited resources make it difficult to adequately address all issues concomitantly.
“LEC must simultaneously address the issues of electricity supply gaps, quality of service, customer connections, labor union demands, logistics, and power theft. LEC must simultaneously address the issues of electricity supply gaps, quality of service, customer connections, labor union demands, logistics, and power theft. LEC management understands and empathizes with the frustration of customers and is committed to continuously dedicating effort and resources to finding lasting solutions to the current energy crisis,”.
The corporation said in the meantime, and while major generation projects are underway, LEC will undertake the following measures to manage the current energy emergency: maximize utilization of its HFO thermal plants, continuation of load shedding, negotiate an increase in energy imports over the CLSG to reduce the impact of load shedding, encourage Independent Power Producers to invest in power generation projects, undertake demand side management whereby large industrial users will confine usage of grid power to off-peak periods, and continue to improve network efficiency.
The LEC management stated that while it has recorded significant progress, sustaining this progress will require resources in the form of new investment, payment for electricity consumed by customers, including the government, and long-term planning and investment for energy transition and supply as well as required a strong management culture based on merit and professionalism, free of undue political influence, and supported by good governance at the Board level.