Government of Sierra Leone. Directions in. Energy. Opportunities for Investment and Partnerships

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1 Government of Sierra Leone Directions in Energy Opportunities for Investment and Partnerships

2 Background to Energy Transmission and Distribution In 2011, as part of the reforms in the energy sector the National Power Authority (NPA) was unbundled into two entities, the Electricity Distribution and Supply Authority (EDSA) and Electricity Generation and Transmission Company (EGTC), followed by the formation of a Regulator, the Electricity and Water Regulatory Commission (EWRC) Introduction Network Map Bumbuna Line EGTC s mandate is to provide reliable, available and affordable power to meet EDSA s supply needs, operating generation plants at maximum efficiency, developing new generation plants and providing sufficient transmission capacity to connect generation to EDSA at a viable tariff. Western Area Network WAPP Line (Planned) EDSA s Mission is to manage a modern electricity distribution and supply network that is safe, affordable, sustainable and competitive for domestic, commercial and industrial customers The installed generation capacity under the management of EGTC is MW, whilst available capacity is 71 MW nationwide. Post Ebola: Presidential Delivery Targets In 2014 and 2015, the economy was negatively impacted by the outbreak of the regional Ebola Virus Disease. As a recovery strategy, seven sectors including Energy have been targeted as part of the Presidential Recovery Plan, for an infusion of funding to specific goals over 24 months: 2016 to In Energy, the Key Results Areas are to: Double the total operational power generation capacity from 75MW to 150MW Double access to electricity from 125,000 to 250,000 households

3 Renewable Energy Compact Sierra Leone became the first country participating in the UK s Energy Africa campaign to sign an agreement to ensure power for all Sierra Leoneans by 2025 The signing between the UK and Government of Sierra Leone took place during the country s first-ever decentralized renewable energy conference The Energy Revolution event was hosted by Sierra Leone s Ministry of Energy and the UK s Department for International Development (DFID). It marked the launch of a series of renewable energy initiatives to eradicate energy poverty in Sierra Leone. The Government aims to deliver off-grid technology and solar home systems to its population, where currently less than 1% have access power in rural areas. Sierra Leone is one of ten African nations that have joined the UK s Energy Africa campaign to expedite universal energy access to lift millions out of poverty and end dependency on aid. His Excellency the President of Sierra Leone, Ernest Bai Koroma was the confirmed keynote speaker and championed the new agreement that reinforces his Government s commitment to provide all its citizens with access to reliable, affordable, and sustainable energy. It is unacceptable that today more than 600 million people across sub- Saharan Africa do not have access to electricity. In Sierra Leone alone, less than 10% of the population have electricity, and in rural areas where the majority of people live, it is practically non-existent, said Minister Hurd. Working in partnership with Sierra Leone, the Energy Africa campaign can help to change that. I am very proud to sign the first ever compact agreement on this campaign with the Government of Sierra Leone to ignite the solar energy market helping to power business, hospitals and homes, making sure the poorest people no matter where they live can access clean, reliable and affordable energy. The Government of Sierra Leone will eliminate tax on qualified internationally certified renewable energy products to ensure modern power to 1 million people by This will position Sierra Leone as a leader in promoting renewable energy both for investors and citizens.

4 Transmission & Distribution The demand forecast considered for the development of the transmission network included the scenario proposed by the MoE, resulting on a peak demand of 1041MW EDSA (Domestic demand): 356MW Mining sector 685MW The domestic demand was estimated based on: Population growth and actual consumption data from existing tariff categories Evolution of electrification rate (from 8% to 50%) and unit consumption per type of customers/tariff Increase in availability of power (constrained demand) Prioritized cities that accounts for 50% of the total population (6 cities and towns currently served by EDSA, and other cities and towns that could be interconnected due to size, demand & location) Peak demand in the mining sector based on estimates from NMA and MoE as of July 2015 considering existing mines and their anticipated expansion, projects that applied for a mining licensee, and projects currently in feasibility stage) The 685MW assumes all mines will be interconnected Additional funding required to fill the Unserved Areas around the country

5 Operations & Maintenance Funding O&M The installed generation capacity under EGTC is MW, in 7 locations nationwide. A tender was issued for O & M contracts for Lots 1 5 of HFO fired plants in early Additional Work Reqd. Rehabilitation of subststions nationwide Network Protection for all Primary Substations Network Protection Repair and commission 6 power plants (30 MW) PROTECTION SYSTEM Commissioned in 2001, primary substations in the western area have received very little maintenance due to nonavailability of spares or specialized tools & instruments. Network stability is very poor and results in total shut down of the system because of faults. Characterized by the following, protection in these primary substations warrant urgent attention, Defective and faulty circuit breaker in the primary substations Defective, aged and life threatening switchgears in the secondary substations Defective, aged and life threatening Low voltage feeder panels Inadequate spares to maintain the 3 phase battery chargers, switchgear panels (Air Insulated switchgear type ZS1) Nickel cadmium batteries no longer retain charge (installed in 1996). Due to the frequent operations, Vacuum circuit breakers are faulty and spares for repair are not available, hence most of the breakers are merely Isolators. Generation capacity within the network is increasing and it will soon receive power from additional stations i.e. Bumbuna Hydro, Kingtom and Blackhall Road. In order to maintain system stability & reliability, the protection system must be robust and effective Sign and operationalize O&M contracts for Thermal

6 Pipeline Projects

7 Energy Sector Initiatives Electricity Sector Collection Account Arrangements The GoSL, together with EDSA, are committed to establishing revenue management and collection arrangements for the electricity sector, including establishing a sector-wide collection account. These arrangements will provide for certain payments to EDSA to made into a collection account and for EDSA's certain costs and liabilities to be paid from the collection account in accordance with a predetermined cash waterfall. The timeline for implementation a. Entering into an agreement with the Collection Account Bank by 30 July 2016; b. Enter into an agreement with an Independent Agent, in relation to the administration of the Collection Account by 30 September 2016; c. Amending the National Electricity Act, 2011 to implement the collection account arrangements (including the cash waterfall) by November 2016; d. Establish the Collection Account with the Collection Account Bank by 30 March Reduction of system losses The Utilities are committed to reduce system losses from approximately 38% to at least 26.5%, during the period from 2016 to 2022 and to increase revenue collection rates to over 90%. In order to achieve these goals the following will be implemented: a. Establishment of a Project Implementation Unit within EDSA (which will be fully operational by July 2016) to supervise and monitor the execution of distribution projects funded by international developing agencies or GoSL. b. Installation of prepaid meters for all domestic consumers by June 2017 (this process commenced in 2015); c. Installation of an automated metering infrastructure for large consumers through by December 2017; d. Introduce new polices and deterrents to tackle and prevent electricity theft. Management Contracts EDSA will enters into a 3-year management contract with a professional utility management company. Abolish Fuel Taxes from Power Generation within the Electricity Sector The GoSL will exempt electricity sector generators from paying fuel taxes on HFO fuel used for generation. GoSL will amend the Finance Act to provide for the tax exemption by January 2017 and, in the interim, by including specific tax exemptions in EDSA's Power Purchase Agreements. Increase in Tariffs Tariffs need to be increased by a minimum of 20% during the period, 2016 to 2020, to enable the accommodation of new IPPs within the electricity sector. To align the tariffs with future estimated cash flows, the GoSL, together with EDSA, and the Electricity and Water Regulatory Commission ("EWRC") will implement new cost reflective tariffs latest by January 2018, for all EDSA's consumers, except for those under the social tariff.

8 Contact: Ministry of Energy