FREETOWN, July 14, 2016 — The World Bank Group today approved US$138 million to boost electricity generation and supply in Freetown and its environs. The Western Area Power Generation Project supports the development of a 57MW heavy fuel oil green-field thermal power plant in Sierra Leone and is jointly supported by the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) – all members of the World Bank Group.
This is the first joint World Bank Group operation in Sierra Leone. “The joint engagement of the World Bank Group will serve as an important signal to the private sector that the country is ready for investments even as it continues to recover from the Ebola epidemic in the context of a fragile economy,” said Henry Kerali, World Bank Country Director for Sierra Leone. “We recognize the critical importance of sufficient and reliable electricity to support economic activities and job creation, and we welcome the increased access to energy to households and businesses in Freetown under the operation. We now look forward to successful implementation of the project.”
The comprehensive and complementary financial package includes an IDA Guarantee (up to US$40 million), an IFC A-Loan (up to US$30 million), an IFC interest rate swap representing a loan-equivalent exposure (up to US$3 million), and a MIGA Guarantee (up to US$60 million). IFC is also the mandated lead arranger of a credit line of US$70 million for this project.
“This project complements Bank policy dialogue in the power sector focused on improving the operational and commercial performance of the sector,” said Parminder Brar, World Bank Country Manager for Sierra Leone. “This project will be successful only if sector financial and operational challenges are addressed adequately. The Bank is working closely with the Government and Development Partners to ensure that this happens in a timely manner.”
In conjunction with ongoing and planned network upgrades under two ongoing World Bank projects – the Energy Access Project (EAP) and the Energy Sector Utility Reform Project (ESURP) – this project supports overall availability of energy and commercial improvements in Sierra Leone’s energy sector. It also facilitates the integration of renewables, in line with the World Bank Group Climate Change Action Plan (2016).