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Background

Country Background

Liberia’s geography and rural population. Liberia is situated in West Africa, neighboring Sierra Leone, Guinea and Côte d’Ivoire. Liberia is divided into fifteen counties. Monrovia, Liberian capital located in Montserrado County, is the most populous city, with 28% of the total population of Liberia. For the purpose of the Master Plan, rural means all areas outside of Monrovia, meaning 72% of the country’s population and around 14 000 settlements. This definition differs from the 2008 census where population in several County Capitals – 19% of the population - were accounted for as urban.

Historical Background. Liberia was created through a settlement of freed slaves from the United States in 1822 and by 1847 the Americo-Liberians were able to establish a republic, thus being Africa's oldest republic. In December 1989, the National Patriotic Front of Liberia (NPFL), led by Charles Taylor, started a long Civil War that lasted until August 11, 2003 when Charles Taylor stepped down and went into exile. After two years of rule by a transitional government, the 2005 Liberian general election were held. In these elections, President Ellen Johnson Sirleaf, former World Bank employee and Liberian Finance Minister, won the presidential elections and became the first democratically-elected female African head of state in January 2006, being reelected in 2011.

Economic background. Following the first post-war democratic elections in 2005, President Ellen Johnson Sirleaf had the challenge to rebuild Liberia's economy, and to reconcile a nation still recovering from 14 years of civil war. By the end of the 14 year conflict, most of Liberia’s infrastructures had been destroyed, food insecurity was widespread, poverty rates were high, and many people had been displaced. The economic impact of the civil war was clear: in 2003 Liberia was the second country with lowest Gross Domestic Product (GDP) based on Power Purchase Parity per capita in the world. With the restoration of peace, Liberia faced a period of rapid economic growth, experiencing a GDP rate of 7.6% on average in the period of 2004‑13, and its nominal GDP more than tripling during this period. The restart of iron ore production encouraged construction and service sector activities.

NOMINAL GDP AND REAL GDP GROWTH ANNUAL PERCENT CHANGE

Human development and Gender inequality. Due to this troubled and difficult past Liberia has one of the lowest Human Development Indexes in the world according to the United Nations Development Programme, ranking 177 out of 188. Although it improved significantly from 0.33 in 2005 to 0.43 in 2015, it remains well below the world’s average (0.71) and also the Sub-Saharan Africa’s average (0.52). One area where Liberia scores particularly low is on the Gender Inequality Index, being the 9th country out of 155 with the highest levels of gender inequality. Maternal mortality ratio, adolescent birth rate are high and access to education and jobs remain low for women in Liberia.

Poverty reduction strategy and the agenda for transformation. Following the inauguration of President Ellen Johnson Sirleaf in 2006, the Government of Liberia embarked on the 150-day Deliverables or Action Plan (February – June 2006), and the Interim Poverty Reduction Strategy (IPRS) (July 2006 – June 2008), offering guidance to donor interventions in addition to continuing programs and activities previously initiated mostly with an emergency relief scope with short-term recovery strategies. In April 2008, the Government of Liberia finalized the Poverty Reduction Strategy (PRS) as a macroeconomic policy framework document to guide socioeconomic development activities and national reconstruction from July 1, 2008 to June 30, 2011. The PRS was designed and built around four pillars: 1) Consolidating Peace and Security; 2) Revitalizing the Economy; 3) Strengthening Governance and the Rule of Law; and 4) Rehabilitating Infrastructure and Delivering Basic Services.

The Agenda for Transformation (AfT) is the Government of Liberia’s five-year development strategy (2012 – 2017). It follows the Lift Liberia Poverty Reduction Strategy (PRS), which raised Liberia from post-conflict emergency reconstruction and positioned it for future growth. The AfT in itself will—in its five-year timeframe—not be able to achieve all that Liberia is poised to do. Rather it is the first step in achieving the goals set out in Liberia Rising 2030, Liberia’s long-term vision of socio-economic development. The AfT sets out precise goals and objectives that Liberia will achieve by 2017 in order to take the necessary steps toward its long-term goals, which are to become a more prosperous and a more inclusive society.

Ebola outbreak. Liberia experienced an epidemic of Ebola Virus Disease in 2014 and 2015, along with the neighboring countries of Guinea and Sierra Leone. World Health Organization (WHO) only declared the country free of transmission a final time on January 14, 2016. It is estimated that Liberia suffered 10 675 Ebola cases, 4 809 of which were fatal. Ebola had a severe impact in the Liberian economy across all sectors of employment. Indeed, many of those in wage employment were either asked to stay at home or lost their positions entirely. Markets closed, potential customers became more reserved in their spending, and travel restrictions disrupted supply. Moreover, Ebola drove up key food prices and led to food insecurity across the country. This along with the decrease of incoming Foreign Direct Investment (FDI) as many businesses departed, taking capital and expertise with them, and a decline in exports of 38%, imposed a serious slowdown in Liberia’s economy. Indeed, Liberia’s GDP growth rate declined 8 pp. from 8.7% in 2013 to 0.7% in 2014.

Energy access is a key component of Liberia’s post-Ebola recovery strategy. A recovery plan for Liberia after the Ebola outbreak was approved in 2015 with Energy Access and Renewable Energies being a key component as energy infrastructure is critical to enable economic activity, output and growth, but also a key lever to strengthen resilience, reduce vulnerability and promote gender equality through improved Health, Education and Security services.

Liberia's Energy Sector and Potential

Liberia’s civil war had severe consequences on the country’s power sector. Before the civil war, more than 7% of the population had access to public electricity – around 35 000 costumers – with a total installed capacity of 191 MW, of which approximately 98% were in and around Monrovia. With the destruction of most of the generation facilities during the war, including the Mount Coffee hydropower plant, as well as of transmission and distribution lines, the Liberian Energy Corporation – national utility in charge of generation, transmission and distribution of electricity – had to cease operations.

On-going reconstruction focused in Monrovia. In the last few years, much effort has been made to resume operations and restore the power sector to pre-war levels in Monrovia. An emergency program allowed for the installation of 22.6 MW of diesel based generators with very high generation costs. In July 2010, LEC had around 2 500 customers, a number that increased to around 20 000 by end of 2015: a significant growth, but still less than expectations and less than 10% of Monrovia’s population. Potential customers still rely heavily on self-generation given the very high tariff charged by LEC of 55 USD cents per kWh (one of the highest in the world). Several investments to reduce costs and facilitate adoption are currently ongoing: 48 MW of Heavy Fuel Oil based generation at Bushrod and the reconstruction of Mount Coffee Hydro – all focused in Monrovia.

Liberia’s rural energy access is almost nonexistent. Despite some progress on the electrification of Monrovia and the implementation of three Cross-Border Medium Voltage grids with Côte d’Ivoire (with planned electrification of 2 800 customers), Liberia still has one of the lowest grid electrification rates in the world with less than 3% of the population connected to grid power and less than 0.5% of the rural population being connected. This means the majority of the County Capitals and large towns, except Monrovia, are currently in the “dark” or dependent on the use of individual or “community current” diesel based generators. The vast majority of the country’s population, that cannot afford diesel based generation, are reliant upon various informal and unreliable systems with almost no energy access. For cooking, people rely mostly on charcoal in the County Capitals and large towns and on wood in the more rural areas. Cooking gas is almost only available in Monrovia at very high prices (50 USD per 12 kg bottle).

EXISTING ELECTRICAL POWER GRID OF LIBERIA (2015)

High hydropower potential across the country. Liberia is a tropical country with a very rainy wet season that lasts between April and November and a long sea coast where many rivers end. Hydro potential is very significant in Liberia with 2 300 MW of hydro power potential having been identified under the RESMP study. Liberia hydro potential is concentrated on large rivers with high mean annual flow and low heads – given Liberia’s “plain” topography. However, the hydro assessment study of the RESMP identified several locations with high natural heads and flows above 50 m3/s – optimal for above 5 MW hydro schemes with low levelized costs of electricity which can supply the national grid or large decentralized grids across the country. Liberia’s hydro potential is subject to high intra-annual variation with significant reduction in production during the dry season requiring combination with other generation sources and benefitting from inclusion of peaking ponds.

HYDROPOWER POTENTIAL MAP

2 300 MW OF HYDROPOWER PROJECTS IDENTIFIED IN LIBERIA

Solar and Biomass renewable potential also significant. Additionally to hydro, Liberia’s climate also favors two other types of renewable energy with potential for rural electrification: Biomass and Solar. Biomass gasification technology – which has been tested in Liberia with promising results but some challenges in terms of operation – can become a lower cost alternative to diesel. Solar resource – which has been mapped by RESMP study – is high and consistent across the country with an average level of 1 712 kWh/m2/year and potential for generation of 1 400 to 1 500 kWh/kWp. Solar technology is the most appropriate for small/medium scale rural electrification in Liberia with the potential to be combined with diesel and batteries to support Low Voltage Transitional mini-grids which could electrify even County Capitals and large towns before the national grid arrives.

Despite high renewable energy potential, power cost relies mostly on fossil fuels and is one of the most expensive in the world. Many locations across the country offer the potential for lower cost renewable electricity. However, people with electricity access in Liberia face one of the highest costs of electricity in the world with LEC tariffs of USD 0.50 per kWh in Monrovia, and USD 0.25 per kWh in Cross Border project areas with electricity. LEC power is currently generated from fossil fuels, with the Mount Coffee Hydropower expected to come online by the end of 2016.

SOLAR POTENTIAL ATLAS FOR LIBERIA

On-going and planned rural electrification initiatives. RREA has several funded projects on-going with a strong renewable component, notably the Scaling-up Renewable Energy Program (SREP) Projects in Low Income Countries initiative with USD 50M committed by the Climate Investment Fund (CIF) through the World Bank and African Development Bank to deploy hydro and other renewable generation and mini-grids in Northwest and Southeast areas of the country. Regarding Grid extension the only projects already implemented are the Cross Border grids from Ivory Coast that currently electrify the County Capitals of Pleebo, Zwedru and Ganta and are expected to connect 2 800 clients. The international CLSG High Voltage (HV) line is under-way and includes the installation of 4 sub-stations across Liberia: Mano, Mount Coffee, Buchanan and Yekepa. Liberia Accelerated Electricity Expansion Project (LACEEP) and Local Enterprise Assistance Program (LEAP) on-going projects include also some grid extension from Monrovia to Kakata, Kle and RIA (the “three corridors”).

Rural Energy Policy and Priorities

Country agenda and policy. Liberia aspires to become a middle income country by 2030 and has approved its Agenda for Transformation - Liberia Rising 2030 - with the focus not only on accelerating growth, but also on ensuring that growth can be sustained and lead to a more inclusive society. Equity is a key principle of Liberia’s policy which is reflected not only on the Agenda for Transformation but also on the National Gender Policy which aims to guide the country towards achieving gender equity and equality, building and utilizing the potential of women and men, boys and girls in pursuing and benefiting from national development goals.

National Energy Policy principles. The National Energy Policy approved in 2009 with a focus on 4 key strategic issues and objectives: Access with Quality and reasonable Cost with an adequate Institutional Framework. President Ellen Johnson Sirleaf defined the following guiding principles for Liberia’s Energy Policy in the keynote address to the National Energy Stakeholders Forum in 2006 which still remain valid:

  • Leveraging enhanced energy access for improvements in education, health and economic development;
  • Providing access to modern energy (fuels and electricity) for previously neglected rural consumers;
  • Enhancing transparency and accountability at every stage of energy operations;
  • Ensuring the long-term financial viability of electric utilities and other energy companies;
  • Ensuring the affordability of all energy forms for poor consumers;
  • Balancing the environmental costs and benefits of all energy programs, taking into account the collective global effort to control harmful greenhouse gases responsible for climate change;
  • Maximizing energy efficiency and demand-side management to minimize the financial and environmental costs of energy development;
  • Ensuring the involvement of the private sector to the “greatest degree possible” throughout the energy sector;
  • Ensuring that Liberia takes all requisite actions on a timely basis to integrate its domestic energy policies into Economic Community of West African States (ECOWAS) Protocol and other regional and international projects, commitments, standards and obligations.

Rural and Renewable Energy. The National Energy Policy calls for the establishment of the Rural and Renewable Energy Agency, the Rural Energy Fund and the need to develop the Rural Energy Master Plan in order to promote renewable energy technologies as a key tool and development program to achieve universal energy access in Liberia.

The following key Policies and Principles shall apply to the Rural Energy Strategy and Master Plan:

  1. Least Cost development taking account of the economic, financial, social and environmental factors and the special needs of the poor through the use of targeted and transparent capital subsidies. The Rural Energy Master Plan shall be developed on the basis of a “Least Cost Universal Access” long term vision. All locations, people, businesses and services shall be electrified using the technology that minimizes the cost of service to that particular location, person or business. Only in such a way will Liberia be able to achieve universal access at the lowest cost possible. Subsidies for the poor will be transparently applied to the least cost solution.
  2. Equity across regions, social classes and genders while balancing efficiency on the allocation of available resources. All Liberians, independently if they are at Montserrado, Maryland or other parts of the country, independently if they are rich or poor or independently if they are men or women, have equal right to access energy services. However, resources are limited and therefore the Master Plan has to decide who to electrify first and with which level of service or support – considering also the fact that some precedent investments may be required to electrify a given area or location. The Master Plan is formulated on the basis of well-defined project selection and prioritization criteria which considers first Equity but also Efficiency.
  3. Priority to electrification of community services and health facilities. Key decision makers across Liberia share the perspective that electrification should start with Health Facilities, than Schools and Public Lighting (Education and Security), and only after households and businesses. The common services shall have priority relative to the individual solutions.
  4. Use of indigenous and renewable resources in a sustainable way while avoiding dependence on solutions with very high running costs. If it is possible to use indigenous and renewable resources instead of importing oil or other fuels in a competitive and reliable way, the Master Plan shall opt for the use of such indigenous and renewable resources. Sustainability means, among other things, that the utilization of biomass or other sources of renewable energy do not contribute to deforestation or to food insecurity. Diesel only based electrification is considered as very expensive to maintain, environmentally unfriendly and unsustainable.
  5. Facilitating private sector investment through the unbundling of power sector activities, the implementation of clear and transparent award and remuneration mechanisms and the targeted use of subsidies and grants. It is the Government intention to involve the private sector to the “greatest degree possible”. Unbundling of Power Sector activities and the award of some of those activities to Independent Private Operators through clear and transparent mechanisms will facilitate private sector participation. The Government shall ensure the long term financial viability of power sector players allowing full cost-recovery at affordable tariffs by reducing capital expenditure (CAPEX) and remuneration through the targeted use of “grants” and capital subsidies.
  6.  Transparent and independent regulatory process to ensure safe, secure, reliable and sustainable power at a cost-reflective but affordable price. Regulation is the most effective mechanism of control for natural monopolies such as Power Transmission or Distribution. Regulation offers transparency and also risk mitigation which can provide confidence both for private investors, donors and lenders. Cost-reflectiveness and affordability trade-offs in rural areas can be also mitigated through the use of regulatory mechanisms. Where feasible the regulator shall promote free and fair competition – namely in Generation and in Procurement of goods and services – to enable consumers to get the best prices.
  7. Promoting regional cooperation. Liberia is a member of the Economic Community of West African States. Rural Energy Strategy shall promote the participation of the key actors in the regional market to enhance international trade of electricity and to maximize opportunities for cost reduction, for investment and for cross-border electrification.

Sustainable Development Goals and Sustainable Energy for All. The National Energy Policy established targets in line with the Millennium Development Goals having 2015 into perspective. The Millennium Development Goals have been updated with the Sustainable Development Goals which incorporate the Sustainable Energy for All initiative and goals of universal energy access, doubling of renewable energy and energy efficiency. Liberia is fully committed to the Sustainable Energy for All initiative and therefore the Rural Energy Strategy and Master Plan updates the rural energy targets with the 2030 horizon and new more ambitious goals into perspective.

ECOWAS Renewable Energy Policy. The ECOWAS Renewable Energy Policy was adopted by the 43rd Ordinary Session of the ECOWAS Authority of Heads of State and Government, which held in Abuja, Nigeria, from 17 to 18 July 2013. This policy on renewable energy aims at ensuring increased use of renewable energy sources such as solar, wind, small-scale hydro and bioenergy for grid electricity supply and for the provision of access to energy services in rural areas. The ECOWAS region set a clear target to increase the share of renewable energy in the region’s overall electricity mix to 10% in 2020 and 19% in 2030. Including large hydro, the share would reach 35% in 2020 and 48% in 2030. Around 25% of the rural ECOWAS population will be served by mini-grids and stand-alone systems by 2030.