Executive Summary

“Small light today, big light tomorrow”. This document presents Liberia’s Rural Energy Strategy and Master Plan (RESMP) for the period until 2030 and aims to set clear targets, to identify least-cost projects and technologies, to propose concrete investments for funding and implementation, with appropriate institutional framework and capacity to increase energy access and renewable energies to the country’s rural areas and population – meaning all areas and population outside of greater Monrovia. This document responds to Liberia’s President call for “Small Light Today, Big Light Tomorrow”, and also responds to two global development goals - the Sustainable Energy for All (SE4ALL) and Sustainable Development Goals (SDGs).

Country context and background

Energy access is a key component of Liberia’s Agenda for Transformation (AfT) and post-Ebola recovery strategy. Liberia was finally on the path of growth and development after fourteen years of devastating civil war and ten years of uninterrupted peace when it was hit by the Ebola outbreak in 2014. The Ebola outbreak had a devastating impact on the nation’s economy and on the lives of millions of Liberians. A recovery plan 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 access is still today one of the lowest in the world. Despite some progress on the electrification of Monrovia - the country capital - Liberia has still one of the lowest grid electrification rates in the world with less than 3% of the population connected to grid power – meaning less than 10% in Monrovia and less than 0.5% in the rest of the country. This leaves the vast majority of people reliant upon various informal and unreliable systems and leads also to an intensive use of diesel based generators in the less rural areas of the country.

Despite high renewable energy potential, electrical energy cost is one of the highest in the world relying mostly on fossil fuels. Liberia has more than 2.3 GW of hydro potential identified and a widespread solar irradiation and biomass vegetation. Many locations across the country offer the potential for lower cost renewable electricity. However, populations with electricity in Liberia face one of the highest costs of electricity in the world with the Liberian Energy Corporation (LEC) tariffs of USD 0.50 per kWh and power mostly generated from fossil fuels.

The Master Plan is based on the principles and policies of Efficiency, Equity, Sustainability, Transparency, Private Sector participation and Regional cooperation. The National Energy Policy principles remain effective, namely the principle of least cost development taking account of the economic, financial, social and environmental factors and the special needs of the poor; the principle of promoting equity across regions, social classes and genders while balancing efficiency on the allocation of the available resources; the principle of optimizing the use of our indigenous and renewable resources in a sustainable way; the policy of facilitating private sector investment; the policy of a transparent and independent regulatory process to ensure safe, secure, reliable and sustainable power at a cost-reflective but affordable price; and the policy of promoting regional cooperation.

Vision and objectives for rural energy until 2030

Building a long term vision. Least cost studies show in the long term (potentially 2050) the most efficient way to bring “Big Light” to Liberia is to have the National Grid reach 89% of Liberia’s population and 96% of potential consumption with the remaining 11% scattered among 7 000 off-grid small settlements. However, the Government of Liberia opted not to delay access to energy for those far away from the existing National Grid and to benefit from the country’s immense renewable potential. The priority and scenario for rural energy is to start building the least cost long term vision based on Medium Voltage (MV) investments, Decentralized Grids and Renewable Energies that can maximize number of connections in an equitable way across the country until 2030 – from Monrovia to cities and towns, from cities and towns to more rural areas.

Ambitious objectives until 2030 for a decentralized and equitable transition to the “large grid” long term vision:

• Electrification rate for the population outside of Monrovia of 10% in 2020, 20% in 2025 and 35% in 2030, electrifying the largest cities and towns of the country first.
• All county capitals, health facility and secondary schools electrified already before 2025.
• 10 largest settlements in each County to be electrified by 2030 with minimum electrification of 15% per County.
• More than 75% of all electricity generated from renewables by 2030 with 19% coming from other than large hydro: Mini-hydro, Solar and Biomass.
• Universal access to affordable solar lamps, efficient appliances and cook stoves.
• Cooking gas available in all county capitals and efficiently produced charcoal widespread across the country.

Rural Energy Action Plan

Five Programs for rural electrification of Liberia. The Master Plan identifies 92 projects and investments to electrify 265 000 homes and 1.34M people outside Monrovia until 2030. The action plan and rural energy projects are structured under 5 main programs:

• GTG: Growing the Grid Program: Expanding Medium Voltage grid from the three planned corridors outside of Monrovia (Kakata, Kle and RIA), from new proposed corridors starting from Gbarnga and from the Côte d’Ivoire, Liberia, Sierra Leone and Guinea interconnection (CLSG) sub-stations and Shield Wire, representing a total investment of USD 308M and the electrification of 164 300 homes. Additionally, GTG includes additional USD 242M investment in on-grid renewable generation to be installed outside Monrovia.
• DG: Decentralized Grids Program: Building large decentralized grids supported by renewable generation, cross border inter-connections and Medium Voltage grids (Voinjama, Pleebo/Fishtown, Zwedru and Greenville); guaranteeing the electrification of the 10 largest settlements in each County, if not under GTG program, than through the development of transitional solar/diesel low voltage mini-grids.Represents a total investment of USD 292M and the electrification of 96 800 homes.
• BTG: Beyond the Grid Program: Electrifying community services, households and public buildings where the grid is not expected before 2025 through 100% solar based off-grid solutions, prioritizing health, education (secondary schools) and security (police stations, checkpoints, courthouses and public lighting); electrifying 75 future off-grid settlements in an equitable way across counties mainly through Solar Home Systems (SHS) while promoting the sale and rental of solar portable lamps or smaller Solar Home Systems across the country. Represents a total investment of USD 16M and the electrification of 4 000 homes.
• OTP: Other than Power Program: Promoting efficiency in buildings, appliances and cooking; developing Liquefied Petroleum Gas (LPG) storage and filling infra-structure while promoting availability of cooking gas in all county capitals; promoting efficient charcoal production and efficient cook stoves requires a total investment of USD 24M.
• BC: Building capacity: Creating the capacity, the institutional framework, the organization, the information and management systems and the infra-structure to implement the Master Plan requires a total investment of USD 52M.

Investment requirements and funding strategy

USD 746M still to be funded mostly for the period between 2020 and 2030. From the required USD 935M, around USD 140.8M are already committed and an additional USD 45M secured, representing a total of USD 185M – mostly from African Development Bank, World Bank and European Union. Most of the secured funding will be deployed in the first phase (2016-2020) representing a significant part of the estimated investment of USD 262M during that period. A gap of USD 749M remains to implement the Rural Energy Master Plan with additional USD 102M being required in the next years, USD 303M between 2020 and 2025 and the remaining until 2030.

A compelling case for funding. The RESMP benefits from a strong initial focus on the electrification of the main cities and towns outside Monrovia (65% of all rural clients in 2030) where there is business activity and some capacity to pay for energy services. The support studies show that if initial investments in distribution and renewable based generation have a strong component of grants and if consumers are charged for what they consume based on pre-paid meters and reasonable tariffs, it is possible to create a financially sustainable system that can maintain the assets, pay for running costs and fund a part of the growth investments, potentially leveraging on a robust Rural Energy Fund (REFUND) to mitigate risks and reduce interests. In the National Grid where generation cost is lower due to regional imports and large scale hydro investments, investments in renewable generation and distribution can also be funded using Development Finance Institutions (DFIs) and the private sector.

Institutional framework and private sector participation

RESMP institutional framework is based on a Public Private Partnership model. The implementation challenge requires strong private sector involvement – in line with the recently approved electricity legislation. However, the need to combine a strong grant component to achieve affordable tariffs, also requires strong donor involvement with competent public sector interface and an acceptable asset ownership model.

The Regional Distribution Companies. At least 5 Regional Distribution Companies will be created to manage all Distribution activities in specific regions – one from LEC and others based on existing cross border grids, CLSG sub-stations and future large decentralized grids. Distribution companies will manage all distribution activities in their allocated region, either on or off national grid, except long term off-grid locations which may be managed by small local companies or cooperatives. Liberia Electricity Regulatory Commission (LERC) will regulate Distribution Companies revenues and tariffs guaranteeing an adequate cost recovery and return on investment while reducing differences in tariffs through use of REFUND as a balancing mechanism.

LEC National Grid Company or Unit. LEC Transmission and System Operation activities should be set up in an autonomous “LEC National Grid Company or Unit” that will treat all Distribution and Generation Companies without discrimination. This unit will also procure energy from on-grid Renewable Independent Power Producers (IPP) and other grid connected generation units in order to guarantee a secure and competitive sourcing for all Distribution Companies connected to the National Grid. Regional Distribution Companies will be allowed to procure part of the energy they consume directly, under limits to be approved by LERC. Other private operators will be involved in rental or retail/supply of solar portable lamps, and non-electrical energy efficient cook stoves or cooking gas and related equipment. Rural Services Unit(s) (RSU) will give support in procurement and wholesale of Solar Portable Lamps, in monitoring progress and to Distribution Companies on pre-paid meters. Petrol retailers will be required to distribute and make available cooking gas in different sizes down to at least 6 kg per bottle. The Liberian Petroleum Refining Company (LPRC) will also support LPG imports and storage.

Coordination, monitoring and communication

Coordination and monitoring. RREA will coordinate, supervise, and report progress yearly on the implementation of the Master Plan, while the Ministry of Lands, Mines and Energy (MLME) will provide policy oversight and monitoring of the Master Plan, along with the National Energy Committee. The latter will include all relevant ministries, agencies, Civil Society, the private sector, and county official and shall meet at least once every year to review progress made on the implementation of the Master Plan.

Communication. A web-site will be developed by RREA to communicate the implementation and results of the Master Plan and the Rural Electrification database and statistics. Other means such as brochure, newsletter, etc. will be prepared to provide information to the general public on the implementation of the Master Plan.