IFC signs electricity redevelopment mandate with Liberia

International Finance Corporation (IFC), the private sector arm of the World Bank Group, on Feb. 5, 2007, signed an advisory mandate with the government of Liberia to support the redevelopment of the country's electricity infrastructure after nearly two decades of civil war. The agreement marks IFC first advisory mandate with Liberia's government.
IFC will advise on securing private sector investment to supplement government's limited resources and provide Monrovia with electricity for the short to medium term, until a more permanent solution can be achieved. IFC expects the mandate to trigger further private sector-driven reconstruction and development in Liberia and to provide a model for other projects in the country.

"Public-private partnerships are a business model that helps increase private sector investment in public infrastructure, helping meet the needs of a growing economy and improve services, especially for people who need them most," said Mr Thunell, Executive Vice President ofthe IFC.
"As a private sector development institution and a member of the World Bank Group, IFC has a unique capacity to structure private participation in infrastructure projects in a way that balances commercial viability with the public good," Mr Thunell said.

The development of the power sector is a crucial component of Liberia's reconstruction and development strategy. The country's pre-war electricity generating capacity of 180 MW has been completely destroyed, and most related infrastructure has been pilfered. The entire system needs to be rebuilt to ensure basic coverage, reliability, and access. The lack of electricity adversely affects export-oriented enterprises and discourages foreign direct investment in other sectors.
Liberia Electricity Corporation manages a temporary scheme that was prepared with support from the EU, USAid, and the World Bank. This provides about 2.3 MW of electricity to public buildings, such as hospitals and schools, and streetlights in two neighbourhoods in Monrovia. The rest of the country runs on individual diesel generators and a few small, river run hydropower plants.

Government recently signed a MoU with development partners, including the EU, USAid, the World Bank, and Norway to commence a second program that will provide an additional 7.9 MW of generating capacity and include network rehabilitation, maintenance, and support for fuel costs. The objective is to provide electricity and especially streetlights to the additional neighbourhoods in Monrovia. Donor funding for both programs will end in June 2008.
IFC advisory mandate will therefore focus on advising the government on selecting a private operator to supply Monrovia with electricity from 2008 until a more permanent solution can be found.