Renewable Independent Power Producers

Growing the Grid Renewable IPP initiative. The Growing the Grid Program includes the “On-Grid Renewable IPP” initiative with 100 MW planned. The IPP model has been selected given the larger size of investments, the ease of integration with the grid – both national and international – and the expected free cash flow that can be generated on the national grid – allowing to obtain funding from Development Finance Institutions and Private sector investors.

Renewable development in decentralized grids. In Decentralized Grids renewable development under a pure IPP model would be challenging in the short / medium term as system size imply smaller projects and potential issues on electricity off-taking due to technical restrictions. Also, the need to balance renewables with more expensive diesel based generation limits free cash flow and the capacity to pay for such investments. Solar/Diesel transitional mini-grids and Hydro generation in Decentralized Grids are expected to be funded by Grants and therefore should remain property of REFUND to be leased to private operators.

Smaller scale IPPs to replace diesel. Smaller scale investments such as biomass gasifiers to replace diesel could be successfully developed and operated by local entities under a pure IPP model – as long as such operators accept similar dispatch rules as diesel generators.

Renewable IPP contractual schemes. Renewable IPPs are normally supported on a Concession/License agreement and a Power Purchase Agreement. The Concession/License agreement establishes the relationship between the producer and the State, normally authorizing construction, providing fiscal incentives or different types of guarantees and potentially clarifying the transfer of assets to the State after a certain period. The Power Purchase Agreement establishes the relationship between the producer and the off-taker, normally establishing the tariffs by which electricity is sold to the off-taker and the rights and duties regarding dispatch of power plants.

Renewable procurement program. Many options exist regarding the structure of a renewable procurement program. Further studies are proposed to clarify the Legislative, Regulatory and Administrative framework of renewable procurement in Liberia building on best practices and on a correct assessment of Liberia’s renewable potential. Such study shall develop and detail also the License and Power Purchase Agreements.