Sierra Leone will target 12 power production and supply agreements through 2017, including one with Copperbelt Energy Corp., to boost generation capacity eightfold, Energy Minister Oluniyi Robbin-Coker said.
Lusaka, Zambia-based Copperbelt Energy will sell 50 megawatts to the government in the first stage of a thermal power plant and within four to five years will offer 128 megawatts of power, Robbin-Coker said in an interview in Freetown, Sierra Leone’s capital, on Feb. 7. Sierra Leone has 96 megawatts of installed capacity, about 200 megawatts short of demand, he said. One megawatt is enough to power about 2,000 average European homes.
“We are looking to develop maybe 750 megawatts in the next five years if possible of installed capacity,” he said.“Hydro is by far the most expensive to build but the cheapest to operate. So it’s now all about how do we mobilize the capital to build it.”
The 12 projects will allow the nation, which emerged from a 10-year civil war in 2002, to attract investors, including Chinese companies that want guarantees of a reliable power grid before expanding mining of iron ore, the raw material used to make steel. The country’s central bank has halved borrowing costs in the past year to promote investment as inflation has slowed and the economy is poised to expand 14 percent this year, almost three times the average pace in sub-Saharan Africa, as mines open.
Sierra Leone’s civil war devastated the economy and made it one of the poorest and least developed nations in the world, according to the United Nations’s Human Development Index. The leone gained 0.8 percent to 4,291 per dollar at 3:29 p.m. in Freetown.
Sierra Leone began exporting iron ore in 2011 after the development of African Minerals Ltd.’s Tonkolili and London Mining Inc.’s Marampa mines. Chinese mining companies including Shandong Iron & Steel Group Co. (600022), which has a 25 percent stake in Sierra Leone’s biggest iron-ore producer, African Minerals, operate in Sierra Leone.
A solar power park that will generate 6 megawatts of power will be ready in about 15 months to 18 months, the minister said. The International Renewable Energy Agency and the Abu Dhabi Fund for Development have provided about $9 million in financing, or half of the budget, he said.
Three companies, including Salini Impregilo SpA (SAL) and Sinohydro Corp. Ltd., are considering bidding on the engineering and construction portion of the Bumbuna II hydropower expansion, 80 kilometers (50 miles) north of the capital, he said. Ghana will provide technical assistance on hydropower to help develop the Bumbuna expansion, the minister said.
The government signed an agreement with Joule Africa and Endeavor Energy to develop the second phase of Bumbuna, which will add 202 megawatts and cost about $700 million. A feasibility study should be ready by the end of March, he said.
“Clearly we have a preferred partner in the form of Joule Africa with whom we have partnered so far,” he said, referring to a memorandum of understanding for the expansion. “We will keep the possibility of opening up the process to other kinds of competition.”
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