Sierra Leone is a coastal country in West Africa with a population of 8.4 million people, but its power sector cannot serve its existing customer base or keep up with future business and household demand. This $480 million compact will build on Sierra Leone’s continued commitment to energy sector reform, a key component of the country’s MCC threshold program that concluded in 2021, while strengthening the foundation of its energy sector for future growth and sustainability.
Sierra Leone has very limited electricity generation, transmission, and distribution assets operated by young institutions with low capacity. About 30 percent of the country’s population has access to electricity, and less than five percent of people in rural areas have access. For those who can connect to the grid, unreliable and fluctuating voltage often damages business and household appliances, such as refrigerators and processing equipment. As a result many in the private sector choose to run their businesses using diesel generators despite being connected to the power grid.
This $480 million compact seeks to assist the country in addressing a binding constraint to its economic growth: the insufficient availability of affordable and reliable electricity to satisfy demand among households, businesses, and social institutions. The compact is designed to strengthen the foundation of a reliable electricity sector through investments in transmission and distribution infrastructure, development of a strong enabling environment for independent power producers, and capacity building support for the utilities and key sector institutions.
The compact includes three key projects: Distribution and Access Project, Power Sector Reform Project, and Transmission Backbone Project.
The Distribution and Access Project will seek to increase reliable delivery and consumption of electricity in Sierra Leone, while reducing barriers to access in selected communities. The project includes upgrades to the currently overloaded and dilapidated distribution network, establish new connections, and regularize existing connections. The project will also include the construction and operationalization of a main and back-up distribution dispatch center to improve the Electricity Distribution and Supply Authority’s (EDSA) operations and maintenance performance and provide centralized visibility and remote operating capabilities.
The Power Sector Reform Project will seek to improve the financial sustainability of the electricity sector in Sierra Leone that enables the sector to expand and satisfy more demand at lower cost. The project includes embedded support to key sector institutions such as the regulator, the Electricity and Water Regulatory Commission (EWRC), and the Ministry of Energy (especially its planning functions) to help them develop the capabilities needed to shepherd sector development over the coming decade. This support is intended to help Sierra Leone implement its Power Sector Reform Roadmap and Action Plan, including achieving improvements on key sector performance indicators targeting improved sector financial sustainability, reduced cost of service while fostering cost recovery for supplied electricity, and improved regulation. The project also seeks to spur additional private sector financed generation through project preparation support, transaction advisory services, and de-risking mechanisms. This project also aims to improve the conditions for private sector participation in generation via transaction support and improving the availability of insurance products.
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The Transmission Backbone Project will seek to increase coverage and reliability of the transmission network with modern, centralized system operations. The project includes major investments in centralized control and a new transmission corridor as well as investments in the network to ensure continuity of service during and after the construction of compact investments. The proposed national dispatch center and associated supervisory control and data acquisition (SCADA) upgrades will improve the utilities’ capabilities to manage an increasingly complex grid—facilitating quicker responses to network disruptions, improved integration of variable and renewable generation sources, and stronger regional integration with neighboring countries. The proposed construction of a southern transmission corridor will help eliminate an existing transmission bottleneck as well as support longer-term demand growth and grid expansion to southern parts of the country.
Milestones in Compact Development
| Milestone | Date | Description |
|---|---|---|
| Board Approval | June 26, 2024 | The MCC Board of Directors approved a new compact with Sierra Leone. |
| Eligibility Notification | December 13, 2023 | MCC Board of Directors reselected Sierra Leone as eligible to continue developing a compact. |
| Eligibility Notification | December 8, 2022 | MCC Board of Directors reselected Sierra Leone as eligible to continue developing a compact. |
| Eligibility Notification | December 14, 2021 | MCC Board of Directors reselected Sierra Leone as eligible to continue developing a compact. |
| Eligibility Notification | December 15, 2020 | MCC Board of Directors selected Sierra Leone as eligible to develop a compact. |