Liberia: Inputs to the Energy Access Action Plan, 2012 2030

Table of Contents
1. Introduction .......................................................................................................................................... 2 1.1. 1.2. 2. Background ................................................................................................................................... 3 Looking forward ............................................................................................................................ 4

Increasing access to Electricity in Liberia: An Economic and Social Objective ..................................... 4 2.1. 2.2. National electrification objectives for economic growth and social development ...................... 4 Key Dimensions of the Strategy .................................................................................................... 5

3.

Transmission Infrastructure ................................................................................................................ 10 3.1. 3.2. 3.3. 3.4. 3.5. General........................................................................................................................................ 10 Grid Development Philosophy .................................................................................................... 10 Transmission Grid Development................................................................................................. 13 Implementation Arrangements .................................................................................................. 15 Transmission Grid Investment Summary .................................................................................... 16

4.

Distribution Network .......................................................................................................................... 16 4.1. 4.2. 4.3. 4.4. 4.5. General........................................................................................................................................ 17 Distribution System Development Philosophy ........................................................................... 19 Phased Development of Distribution Network ........................................................................... 21 Implementation Arrangements .................................................................................................. 22 Summary of Distribution Investment requirements................................................................... 24

5.

Demand Supply Balance ..................................................................................................................... 24 5.1. 5.2. 5.3. 5.4. 5.5. Electricity Demand Projections. .................................................................................................. 24 Supply projections....................................................................................................................... 26 Supply Options and Least-cost Generation expansion Plan ....................................................... 27 Demand-Supply gap .................................................................................................................... 29 Implementation arrangements for additional generation ......................................................... 31

6.

Fuel Supply Infrastructure................................................................................................................... 34 6.1. 6.2. 6.3. Supply Price for Grid-Electricity .................................................................................................. 35 Fuel Pricing .................................................................................................................................. 36 Fuel supply and Fuel infrastructure for thermal generation ...................................................... 37

6.4. 6.5. 7.

Fuel requirements and sizing of fuel import infrastructure ....................................................... 38 Implementation arrangements for development of fuel supply infrastructure......................... 38

Financial performance of the Utility and quality of service for the users .......................................... 39 7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. 7.8. Commercial management ........................................................................................................... 39 Connection cost .......................................................................................................................... 39 Tariff methodology and principles .............................................................................................. 40 Customer Mix .............................................................................................................................. 41 Attention to the Customers and Quality of Service Monitoring ................................................. 41 Capital and operating cost estimates, and phasing of investments for system improvements. 42 Implementation arrangements for handling commercial aspects ............................................. 42 Reducing losses from thefts ........................................................................................................ 43

8.

Renewable Energy, Off-grid System, and Rural Electrification ........................................................... 43 8.1. 8.2. 8.3. 8.4. 8.5. 8.6. Overview of renewable energy resource resources in Liberia ................................................... 43 Strategy for Rural Electrification: Policy objectives, and Implementing Framework. ............... 48 Planning Access Program. ........................................................................................................... 49 Institutional Options ................................................................................................................... 50 Pricing and Subsidy Policy ........................................................................................................... 51 Technical Options for Off-Grid Extension .................................................................................. 52

9. 10.

Investment Planning and Financing .................................................................................................... 55 Institutional Development and Capacity Development Strategy .................................................. 55 Clarification of roles and responsibilities ................................................................................ 55 Skills needed for the energy sector......................................................................................... 57 Gaps and capacity-building strategies .................................................................................... 57

10.1. 10.2. 10.3.

10.4. Identification of potential sources of financing for institutional development and capacity building ..57 11. Conclusions and Recommendations ............................................................................................... 58

1. Introduction

1.1. Background Before its civil war (19892003), Liberia had a total installed capacity of 182 MW (64 MW hydropower, 68 MW gas turbines, 40 MW heavy fuel oil, 10 MW medium speed diesel), 98% of which was located around Monrovia. The electricity sector had around 35,000 customers at the time. The hydropower plant at Mount Coffee supplied 64 MW during the wet season and less than 10 MW during the dry season. Outside Monrovia there were ten small isolated power systems supplying rural areas. At the end of the civil war in 2003, the power sector was largely destroyed due to warfare. Whatever remained was destroyed through looting up to 2005. This included the complete destruction of the hydropower plant at Mount Coffee as well as all the transmission lines and the distribution network. The Liberia Electricity Corporation (LEC), the national electricity utility, ceased operations. Less than 2% of Liberias population had access to electricity. In order to overcome this critical situation of the electricity sector, the Sirleaf Government has embraced energy development as a priority and has been working toward the reconstruction of the electricity sector at the urban, rural, and regional levels. National Energy Policy (NEP), endorsed in June 2009 calls for universal and sustainable access to affordable and reliable energy supplies to foster the economic, political, and social development of Liberia. The NEP sets four main pillars to achieve its developmental goals: (i) universal energy access, including the development of an energy master plan; (ii) least-cost production of energy and protection of the most vulnerable households; (iii) the adoption of international best practices in the electricity sector; and (iv) the acceleration of public and private partnership in the sector. Since the elections in 2006, achievements are clearly visible. As LECs basic functions were restored a five year Management Contract was signed in July 2010 with Manitoba Hydro International (MIH) and the support of the international donor community. A small grid was rebuilt and is supplied with electricity by high-speed diesel generators with a total capacity of 9.6 MW in 2009. Electricity is distributed through four separate sub-stations. Finally, in early 2010 and for the first time in Liberias history, a Rural and Renewable Energy Agency (RREA) has dedicated its services solely to rural areas, including the rural poor.
More recently, installed generation capacity increased from 9 MW to 22.6 MW of diesel-generated power from 2010 to 2012, of which about 16 MW are effectively available. In addition, several donors are supporting the expansion of generation in the short term (see table below), and the implementation of a regional transmission network, linking Liberia to the West African Power Pool (WAPP), and connecting Cte dIvoire, Liberia, Sierra Leone and Guinea (CSLG). This will make it possible for Liberia to import cheaper power from other countries, such as Cte dIvoire, and it would also transform the domestic power system in Liberia-- and Sierra Leone by building the backbone transmission lines in those countries, which have very limited electricity infrastructure.

GoLs efforts to reconstruct and develop the transmission and distribution network and expand coverage services to the population have benefitted from strong international donor support. US$ 55 M of public funding is currently available for the development of the transmission and distribution network. As the power system improved, peak demand went up from 4 MW to 8.6 MW.
LEC has increased its active customer base from 2,000 to 5,800 customers (less than 1% of the national population). In sum, there have been significant progress in rebuilding the power sector from the situation it was left after the war. Yet, much remains to be done, and the country faces still important challenges to be able to provide modern electricity services to its population. Lack of basic electricity infrastructure, high costs reflected in a tariff that is among the highest in the region, low quality of the service that deter commercial and industrial users from using LECs services instead of self-generation, a generation mix based on expensive imported fuel and a lack of a solid pipeline of generation projects that could increase the electricity available at a lower cost in the medium term are some of the obstacles that will need to be addressed in order to place Liberias electricity sector on a sustainable development path.

1.2. Looking Forward

Building on results achieved so far, the GOL has adopted an ambitious strategy to expand coverage, improve the quality of electricity services (summarized in the next section) and reduce the costs of these services. Reducing the cost of electricity and improving quality and reliability of service will be key to foster economic activity and facilitate the long term development of the country. It intends to operationalize this strategy through a detailed action plan for the short term (2012-2015) and a more indicative plan over a medium term horizon (2012-2030). The remaining sections of this document elaborate on the GOLs vision and key ideas as communicated to the World Bank team during the last mission. It also incorporates emerging best practices for the GOLs consideration. Technical figures and projections are based on the data available to the team, and will need to be updated based on more recent estimates by LEC and other sources.

2. Increasing Access to Electricity in Liberia: An Economic and Social Objective

2.1. National Electrification Objectives for Economic Growth and Social Development

Having re-established electricity services to key areas of the capital and having launched an initial program of connections for poor customers, GOL has now shifted its strategy from crisis management to the medium and long term development of the electricity sector. This vision, which includes clear development goals, was outlined in the National Energy Policy (NEP) adopted in 2009. It was further developed in 2012, when GOL announced an ambitious plan to bring electricity services to a significant share of the Liberian population (35% countrywide and 70% for Monrovia) by 2030. The plan aims to achieve the quality and reliability of electricity services required to ensure that the electricity sector does not continue to be a major bottleneck to the countrys economic growth and development. The plan further aims to expand the economic uses of electricity in urban and rural areas.

2.2. Key Dimensions of the Strategy

An action plan to achieve these ambitious objectives to improve and expand electricity in the country would require the GoL to take actions on several fronts simultaneously. This section outlines the key dimensions that are essential to the success of the Governments Energy Access Strategy.

2.2.1. A Transmission and Distribution Led Strategy

The Governments vision for the development of the electricity sector is based on a transmission and distribution led strategy, and on the expansion of the associated generation capacity to respond to the expected increase in demand. Given the scant infrastructure, the GOL is aware that accelerating coverage and offering reliable services will require massive investments in transmission, distribution and metering equipment. GOLs specific T&D expansion objectives over the short and medium term are examined in greater detail in section 5 and 6. Since 2006, LEC has focused on the rehabilitation of the power network and the restoration of services in the main areas of Monrovia. However, given the envisioned expansion of the transmission and distribution network, it may be important for the GoL to rethink LECs role as the national utility. The accelerated expansion will likely require LEC to resume its role as a utility with country-wide responsibilities. For instance, the GoL has indicated that LEC will be expected to serve a larger customer base in Greater Monrovia and outside of the capital, such as commercial and industrial users currently relying on auto-generated supply. Given that the GOL is currently renegotiating the management contract with Manitoba Hydro International (MIH), this may represent an opportunity to discuss LECs evolving role in ensuring a successful implementation of the Governments expansion plan.

2.2.2. Reducing Cost of Electricity for Greater affordability and Sustainable Increase in Demand
Electricity tariffs in Liberia are among the highest in the region. Nevertheless, they still fall short of fully recovering the cost of producing electricity. In part, these tariffs are subsidized by the donors through the provision of capital at subsidized rates, and by the Government through subsidizing current costs. The

high electricity cost are due in part to the high cost of generation that is based on diesel-fired generation, the small scale of the system that prevents the use of larger and more efficient generation units, and to inefficiencies in transmission and distribution. The reasons for such high costs, and the actions to be taken to reduce them are discussed in various parts of this document. However, it is important to highlight from the outset that the high cost of electricity and the low quality of services are a major obstacle to the success of a strategy aiming to expand access and services to a larger share of the population in Liberia. Unless cost decrease and tariffs follow the lead, poor users will not be able to afford the services, even if enough resources are secured to expand the network and allow these users to be connected to the grid. Equally important, unless the utility is able to provide reliable service of high quality to commercial and industrial users, it may not be able to convince them to give up self generation and connect to the national grid. To improve the provision of electricity services, the GoL requested the support of the development partners, who provided in 2010 emergency funding to the national utility, LEC to procure a management contractor to improve the utilitys performance and build up its customer base over a five year period. LECs management contractor Manitoba Hydro International has been in place since July 2010. Operational results have been clearly identified. MHI is expected to establish 33,000 new connections over a five-year period, resulting in an additional 160,000 people in Monrovia having electricity for the first time since the war, and to reduce technical and commercial losses from 29 to 12 percent. Also, capacity building should result in LECs ability to sustain improved operational performance over the long term (see section 7). However, the high electricity costs are caused to a substantial part by the predominance of fuel-based thermal generation. The Government has already decided to shift from diesel to heavy fuel based thermal plants in the development of new generation in the short term. Further progress in this direction would require government strategic considerations to focus not only on how to expand generation capacity, but also on how to shift the energy mix towards sources of energies that would in the medium term lead to lower electricity cost. This is an important aspect of the Government Sector Strategy that is discussed further in sections 3 and 8 of this document.

2.2.3. Expanding Generation Capacity

The need to develop additional generation capacity in the short and medium term is a direct consequence of the GOLs strategy to rapidly expand services to the population. The expected accelerated demand growth has to be accommodated and also modulated to smooth out demand peaks and reduce pressure for additional capacity. Mechanisms such as interruptible tariffs for large customers could be one way of managing efficiently the demand, but ultimately, the expansion of the system and resulting increase in the demand from customers will require investing in additional generation capacity. Given the demands on public funding by the expansion of the transmission and distribution network, GOL aims to develop new generation capacity mainly through private sector sponsorship. Securing this new generation capacity is a pressing concern for the Government, since it is expected that the accelerated growth of demand will lead to generation shortages already by the end of 2013, despite the various thermal plants already in the pipeline, the rehabilitation of Mt. Coffee and the regional imports from the CLSG.

The GoL has indicated that the shift from diesel to cleaner and cheaper sources of energy is another driver of its energy strategy. Alternative energy sources would reduce the cost of electricity to end users -and would help the Liberian economy to shift onto a path of lower carbon growth and development. In the short term, this shift requires scaling up the thermal generation capacity based on Heavy Fuel, completing the rehabilitation of the hydroelectric Mt. Coffee Plant, and exploring additional hydroelectric power from the Saint Paul River. The diversification of energy sources will also be facilitated by the integration of Liberia into the West African Power Pool through the CLSG regional transmission line. The CLSG regional transmission line will allow Liberia to import cheaper hydroelectric power from the regional market, notably from Cte dIvoire. In the medium term, an important part of the strategy to adopt a cleaner and cheaper energy mix for the country could include further exploring hydroelectric resources from the Saint Paul River, increasing electricity trade on the regional market, and analyzing options for diversifying towards wood chip biomass or other biofuels. In the longer term, options such as using gas could also be considered, perhaps by bundling Liberias demand with that of other neighboring countries, to achieve economies of scale and hence more favorable prices.

2.2.4. Ensuring Sustainable and Cost Effective Availability of Fuel

Through the sector strategys focus on shifting from diesel to Heavy Fuel (HF), the GOL has manifested a strong commitment to rehabilitate the port facilities (oil jetty, storage terminal, and other facilities) and the fuel supply system required to bring fuel from the port to the generation plants. The GoL has initiated the rehabilitation of LECs fuel storage tanks at Bushrod facility with the support of international donors (under the World Bank financed LESEP project). It also has engaged in discussions with private oil companies involved in HF trade and transportation. An agreement has been reached to transport HF by trucks to the new thermal plants as they enter into operation. Simultaneously, the GoL is working to develop a more comprehensive solution based on the rehabilitation of the pipeline in order to secure a reliable supply of Heavy Fuel for the additional generation capacity needed to bridge the demand-supply gap.

The Government has indicated that the shift to HF-based generation would allow for part of the costsavings from cheaper fuel to translate into cheaper tariffs for end-users. Reduced tariffsto reflect reduced costs-- would help remove a major obstacle for increasing effective demand for electricity, and will help the GoL to achieve the envisaged expansion of coverage and service improvements.

2.2.5. Strengthening the Financial and Operational Sustainability of the Sector The public sector will always play an important role in the planning and development of the electricity sector, but ultimately the long term sustainability of the sector will depend on its capacity to generate internal resources through customer fees and savings from increased

efficiency, and its ability to attract private sector resources notably in the generation segment. The extent to which the sector achieves long term sustainability will help lessening the fiscal burden on the government, and will facilitate economic activity and growth, by releasing one of the key constraints to private sector development in Liberia1.
2.2.5.1. Improving Financial and Operational Performance of the Utility

A significant part of the commercialization strategy focuses on the operational and financial strengthening of the public utility, LEC. Measures include all efforts to reduce costs, such as the shift from diesel to heavy fuel or hydroelectricity and the use of pre-paid meters or of interruptible tariffs for large customers. The strategy also requires LEC to undertake an active campaign to expand its client base to include a significant number of commercial and industrial customers. LEC should be willing to shift from selfgeneration to grid connections to offer these potential customers the reliable, high quality service at reasonable prices that they need. Increasing the regular paying customer base, particularly large ones, together with GPOBAs grant for connecting over 16,000 poor households, should help LEC gain a stronger financial footing. This will enhance its credibility as the off-taker when new private sector-led generation enters the Liberian energy market. 2.2.5.2. Attracting Private Investment in Generation

Equally important, the GoL has highlighted that it expects the private sector to play a leading role in the development of the generation capacity of the country, while the Government would focus public resources on the expansion of the transmission and distribution network. Expanding generation capacity through private sector initiatives would leverage the use of public resources. Private electricity generation would also increase the efficiency of the sector through transfer of technical and managerial expertise. An approach focused on increasing private participation in the electricity generation in Liberia has thus many advantages and would complement very well the Governments efforts. At the same time, attracting private investors on a sustainable basis depends critically on several factors that need to be in place for this strategy to be successful: Enabling environment for private sector participation: private investors need an enabling environment, including but not limited to a clear and predictable legal and regulatory framework in which contracts can be properly signed, enforced and monitored; Broad public consensus on the benefits of private sector participation for the country in general, and service users in particular. This matters as it would facilitate the support of the legislative branch in ratifying contracts, and avoid any public backlash during the life of the projects; Solid pipeline of potential projects, based on the GoLs overall sector expansion plan that will give the Government a credible starting point to discuss with interested sponsors and lenders how they can participate in the sector.

Liberia Investment Climate Policy Note 2010, World Bank publication, cited in Developing Public-Private Partnerships in Liberia,, PPIAF-World Bank Study, 2012..

Institutional capacity within the government to lead the dialogue and engage effectively with the private sector: this entails the presence of committed key official(s) in charge of bringing the process from start to finish; the existence of technical expertise about private sector participation in electricity that can be leveraged (but not substituted) by external consultants, and a strong inter-institutional coordination among all relevant agencies involved in the process.

Given the interest of the Government to attract private investors to increase generation capacity in the short term, it may be important to focus (1) on launching some key projects, based on sound and carefully drafted contracts, and (2) focus on developing the overall legal and regulatory framework for private sector participation (consistent with the individual contracts) to facilitate a broader engagement in the sector of private investors. The support of the donor community with risk mitigation instruments, such as guarantees of different sorts will be critical, because they will help the government to build up credibility and a track record of its own. A similar approach could be adopted with the objective of strengthening institutional capacity in the energy sector for PSP: use one or two transactions as training-on-the-job opportunities for government officials with the appropriate qualifications (economical, financial, engineering, legal, etc.) to prepare specific transactions with the support of external consultants. These first transactions, if successful, will have a demonstration effect beyond the sector, as they will demonstrate the capacity of Liberia to be a trusted partner for local and international private investors. 2.2.6. Institutional Development and Capacity Building
Investment in human capital and the reconstruction of physical infrastructure are central pillars of the GoLs development strategy. In the energy sector, the Government Energy Access Strategy includes a plan for institutional development and capacity building for the institutions involved in the sector, including the Ministry of Mines, Lands and Energy (MLME), the Rural and Renewable Energy Agency (RREA), LISGIS, and LEC. The plan will play a key role in strengthening the governance of the sector and the capacity of the utility to deliver the services. It is particularly important to rebuild the technical and managerial skills of a population severely affected by the war. For this reason, it would be important not only to implement the necessary training programs, but also to ensure that all contracts with experts of all sorts (technical assistance as well as commercial contracts) include commitments to transfer expertise to local personal, with easily monitorable performance indicators. This approach has been used already in the management contract with Manitoba International Hydro with the support of the international donor community, and could be replicated in other cases as well.

3. Transmission Infrastructure

3.1. General The demand forecast presented in the Electric Master Plan (LEC 2011) for Monrovia as well as the document Options for the Development of Liberia Energy Sector (World Bank, 2011), both predicted high levels of demand for Liberia in the years to come compared to the current situation. The LEC High Case Scenario 3 (unconstraint) predicted demand of 2015 Monrovia (Est 2015 pop 1.1M ) is 75MW. The High Growth demand forecast in The Options for the Development of Liberias Energy Sector [AFTEG, 2011] predicts a demand of 150MW for Monrovia by 2030.2 In this document the LEC forecast is used for Monrovia whilst the forecast in the Options for the Development of Liberia Energy Sector (World Bank, 2011) is used for the remainder of Liberia, as. (The LEC Master Plan forecast only covers Monrovia). The grid development program presented in this document is largely conceptual and only meant to be indicative of future requirements. A rigorous technical design involving load flows, short circuit analysis, and reliability investigations was beyond the scope of this desktop study. Such an exercise which remains to be done would have to confirm adequacy of the circuits to carry their expected loads under normal and emergency conditions, and ensure voltage drop and technical losses fall within acceptable limits and that supply reliability criteria are met. 3.2. Grid Development Philosophy

3.2.1. Voltage Levels The Government of Liberia has started the reconstruction of the distribution (22kV) and the subtransmission (66kV) lines in Monrovia .The Regional Transmission Line interconnection Cote dIvoire, Liberia, Sierra Leone; Guinea (CLSG Regional Transmission Line) introduces 225kV as the extra high voltage for transmission. The CLSG Regional Transmission Line is also equipped in 3 substations in Liberia with a secondary voltage of 33kV and the substation
2

While currently the economic circumstances of Ghana cannot be compared with those of Liberia, it is believed that in the long term, once Liberia gets to the development of its vast natural resources that comparison can be worthwhile. In comparison with the demand estimated for Monrovia under LECs high case scenario of (75MW in 2015), the demand for 2011 for Accra (pop 3.5Million) was 443MW; which can be projected at 7% growth rate per year to 581MW by 2015. Similarly demand forecast for Accra for 2015 amounts to 182. 5 MW for 1.1 M people higher in pro rata terms than the prediction of demand for Monrovia by 2030. Thus, these comparisons of Monrovias forecast of demand, with the evolution of demand in Accra, show that even the high case demand forecast figures for Monrovia are not overstated.

connecting Mount Coffee with a secondary voltage of 66kK. This means that the 22kV and 66kV combination would apply in Monrovia while 33kV would be used for both sub-transmission and distribution in the rest of the country. With 33kV as the sub-transmission voltage outside Monrovia, there may be the need to extend the 225kV grid within the foreseeable future in order to be able to serve some parts of the south east of the country which are far from the proposed 225kV grid.

3.2.2. Sub transmission Level Development Given the high levels of growth expected, it is necessary to size the lines appropriately to be able to provide for the foreseeable future. The schedule shows the selected line sizes and their thermal MVA ratings.

Line Type i) 3X265 mm2 AAC [Heavy Gauge] ii) 3X150 mm2 AAC [ Light gauge]

66kV 80 MVA 50 MVA

33kV 40MVA 25MVA

The 66kV and 33kV networks should be designed as much as feasible for construction in loops or rings. Further, such loops and rings would, in turn, be inter-linked. The proposed arrangements will help improve reliability. Where a ring circuit cannot be justified for cost reasons radial feeders may be used.

3.2.3. 225kV Substations The CLSG Regional Transmission Line will have a transformational impact on the national power systems by building the Liberia backbone transmission line that is able to connect the counties far from Monrovia. However, some counties, for instance Grand Kru, Maryland, Grand Gedeh and Sinoe, are so far away from any of the current planned substations in the CLSG Regional Transmission Line that a cost effective connection is not possible. Very long lines would be required to connect these counties with grid power. This would also present technical challenges such as high transmission losses and poor voltage regulation. In order to reach out to the majority of the population in a cost effective way with reliable power, it is proposed, and included in this plan, to construct a fifth substation of 222/33kV at Bolata.

3.2.4. 66kV 33kV and 22kV Substations Characteristics The design and construction of substations involving these voltage levels should be such that they can be upgraded or expanded to accommodate twin transformers and sectionalized buses. It is advised that all 66kV and 33kV equipment be of outdoor type to provide for flexibility for upgrades, replacement etc. 22kV equipment may be indoor type, metal-clad with appropriate degree of protection eg. IP41 The capacity of 66/22kVsubstation now in use is 1X10/13MVA. Within a few years of robust load growth this would not be adequate in some locations in Monrovia. For about 15% more investment such a substation could be provided with a 1X20/26MVA capacity. Therefore, it is proposed that all future procurement of this type of power transformers should include the larger 20/26MVA units. (Most of the other components of the substations are exactly the same for either size of transformer, including switchgear). 3.2.5. Control system SCADA

The CLSG Regional Transmission Line and its substations are to be provided with a SCADA system under the CLSG project. A primary SCADA system is also proposed for the Monrovia Mt Coffee area. This will cover the three proposed 66/22kV substations as well as the existing two at Bushrod and Paynesville. It is also proposed that two SCADA systems would be provided. First, a SCADA system would be provided at least for the proposed switching Station at Fish Town. Second, a SCADA system would be required to control the sub-grids of the various county capitals. Considering the development of a power network system and how the system would be built in phases, it is recommended to consider a substation equipment to be SCADA-ready in order to ensure compatibility and harmonized synchronization and operation.

3.2.6. Rights-of-Way Throughout the development of the power system network, it would be required from LEC, with the support of the MLML and the GOL, to secure the transmission lines rights-of-way as well as sites for substations. Best practices indicate that a 30m wide corridor is typical for sub transmission lines and somewhat less for 22kV lines.

The rights-of-way must be sufficient to provide safety for persons and for development of future networks along existing ones. It may be necessary for LEC with the support of GOL to secure transmission lines rights of way as well as sites for substations. A 30m wide corridor is typical for sub transmission lines. Somewhat less can be used for 22kV lines. The rights of way must be sufficient to provide safety for persons and for development of future networks along existing ones. 3.2.7. Skywire A scheme of Single Wire Earth Return (SWER) would be used utilize the skywire on the proposed CLSG Regional Transmission Line 225kV to reach communities that come under the line.

3.3. Transmission Grid Development This planning exercise recommends the development of the transmission power grid in phases in order to match the demand forecast, and facilitate the implementation of the reconstruction of the power sector. Based on the GoL ambitious targets to accelerate the expansion of services to the population, it is assumed that investments in transmission and distribution would be expanded to cover 70 percent of the greater Monrovia residents and 35 percent of the population in the country by 2030.

3.3.1. Development in the Greater Monrovia Area (Phase 1) The first phase for the transmission investments in this plan considers the period from 2012-2015 and is composed of the LECs Master plan for the period of 2012 to 2015 (See Annex 4) with its geographical limitation, as well as the Greater Monrovia Area. The LECs Master Plan cost estimations for the period of 2012-2015 indicates an investment requirement of US $ 81,583,604. This phase will also include the three following areas: i) ii) iii) Paynesville to Airport Monrovia to Kakata Monrovia to Bomi Hills/Kle

This Plan includes a proposal for a heavy gauge 66kV ring around Monrovia to interconnect the three target locations instead of simply constructing individual radial lines to serve them. This ring runs from Paynesville Harbel (Airport) Kakata - Mt Coffee to Bushrod . In addition a radial line is proposed to link Bushrod to Bomi Hills. As part of this rings, it would be required a 66kV/22kV Substations that are proposed to be located at Harbel/Airport, Kakata and Bomi Hills respectively. 22kV lines would then continue downstream to serve as the distribution MV network. These proposed lines traverse very fastdeveloping suburbs of Greater Monrovia and beyond. The provision of electricity to these areas is essential since larger loads and economic activities are located in these areas. An interconnection of 66/33kVsubstation is proposed for Harbel to provide a link between the 66kV Mount Coffee sub-grid and the Buchanan 225kV substation. This will help provide some emergency grid supply to Monrovia in the event of a contingency at Mount Coffee hydro power plan. A conceptual design has been done based on the Transmission Grid Development Philosophy in Section 5.2. The proposed Grid Layout from this activity is attached as Appendix 2 while the Grid Single Line Diagram is presented as Appendix 3. To facilitate future connections to such a system LEC should specify all its proposed substation equipment to be SCADA-ready. A general provision of $4M is made for this equipment. The schedule of Transmission Investment Requirements under Phase1 is to be found in Appendix 1.

3.3.2. Transmission Grid Development: Country wide Phases 2, 3 and 4 Phases 2, 3 and 4 of the transmission grid development plan cover all areas outside Monrovia. However provision is also made for the expansion of the grid in Monrovia beyond 2015 since it is expected a demand increase in the area. Development in the three phases would involve the construction of 33kV circuits from the proposed 225/33kV, construction of switching stations, SCADA and Skywire in order to supply the towns en route the transmission lines. This access plan considers the connection of 50 communities along the three phases of implementation. In order to identify the priority to interconnect certain load centers during the three phases, it is necessary to have a clear and upfront set of criteria for the planning exercise. The following set of criteria is proposed:

a) Top Priority: Towns nearest to the proposed 225 Substations b) Second Priority: Other towns but not covered by the Cross-Border project c) Least priority: Counties covered by Cross-border project

Phase 2 Phase 3 Phase 4

A conceptual design has been carried out based on the transmission Grid Development Philosophy provided in Section 5.2. The proposed Grid Layout from this activity is attached as Appendix 2 while the Grid Single Line Diagram is presented as Appendix 3. The design proposals include interconnections between sub-grids of 225 substations. 3.4. Implementation Arrangements

3.4.1. Appraisal Prior to Implementation of Each Phase As indicated in the previous sections, this indicative plan should be complemented with more detail on the economic, financial and technical aspects of the expansion of the electricity sector. Likewise, environmental consideration should be also included. On the technical aspects, a rigorous Load Flow Analysis would be required in the technical investigation to ensure adequacy of line and substations loading capacity. This Load Flow Analysis will determinate the beat economical operation for the existing system, so it is necessary to update this analysis in each of the phases so adjustment can be made to access plan. This analysis is also very valuable since this will identify the proper protection devices to insure the security of the system.

3.4.2. Project Packaging Strategy For each phase the procurement may be divided into packages as proposed below: Package 1. Transmission Lines 2. Substations Activity Supply& Erect Supply& Erect Procurement Method ICB ICB

Depending on size the Transmission Lines package may be divided in two Lots for easier implementation.

3.4.3. Project Management

It is proposed that LEC capabilities are enhance in order to be able to properly handling of project procurement from tendering, through evaluation, negotiation and contract signing. LEC would be responsible for supervision during construction. In Phase 1 the Management Contract can support the implementation of the investments. For subsequent Phases, there would be the need for technical assistance in the absence of Manitoba Hydro International whose current contract would have expired.

3.4.4. Institutional Capacity Development The provisions made under Distribution system Development Sub-Section 4.4.4 also cover for the Transmission Development component. Thus no additional provision is made here. 3.5. Transmission Grid Investment Summary

Phase

Description

Cost (US $) 19,543,045 81,583,604 20,335,612 22,991,799 34,194,246 750,000 4,000,000

Phase 1 Monrovia (2013-2015) Lines and Substations Phase 1 Monrovia (2013- 2016) As Per LEC Master Plan Phase 2 All Liberia (2016-2020) Lines and Substations Phase 3 All Liberia (2021-2025) Lines and Substations Phase 4 All Liberia (2026-2030) Lines and Substations Provision for Skywire Supply ($ 15,000 each for 50 Towns) SCADA Total Add 10% Physical and contingencies Total For Transmission Grid Investment

183,398,306 18,339,831 201,738,137

4. Distribution Network

4.1. General

Over the plan period it is expected that electricity distribution supply would be expanded to cover 70% of the greater Monrovia residents and 35 percent of the population elsewhere. According to the 2008 population the population in Liberia was 3,489,072 people with 1,010,970 people living in Monrovia. These two figures are extrapolated at the compound rate of 2.1percent per year until to 2030 with a total population of 5,511,581 in Liberia and 1,596,999 in Monrovia. The difference between the two figures of 3,914,582 is the 2030 projected population for outside Monrovia At an average of 5 residents per household we have 782,916 and 319,400 households for the rest of Liberia and Monrovia respectively, by 2030. (Pop growth rate and # residents /household obtained from Census Report 2008) Assuming a target of 70% access to electricity in Monrovia, this would result in 223,580 households in Monrovia. Similarly, achieving 35% access to electricity in the rest of the country, this would represent 274,020 households. However, it is important to point out that this indicative planning needs a more detail analysis in order to confirm the population and location. In order to achieve these targets it is important to consider the expansion the power grid in the greater Monrovia area with transmission and distribution grids of 66kV and 22kV. For the remainder of the country it is proposed the following criteria to achieve the national target of electrification: i) ii) iii) iv) All County Capitals and Towns of population greater than 5,000. Areas immediately outside Monrovia which are to benefit from extensive grid extension (e.g. Harbel, Kakata. Bomi Hills) Cross-Border Towns Electrification Skywire Supply along 225kV lines.

Information received from LEC indicates that there is an ongoing contract with EU support for the connection of 18 communities in Grand Dedeh, Maryland and Nimba Counties through cross-border collaboration with the Cote dIvoire. The 9,6Million, which will be completed by July 2013, would get electricity to 131,000 citizens; or 26,200 using the Census data of average 5 persons per household. LEC is expecting supply from Cote dIvoire of about 8MVA. This is taken into account in the plan preparation. The following Schedule shows the towns and county capital, their populations and expected numbers of customer connections by 2030. The schedule was adapted from the 2008 National Census. The number of persons/household (5) and the population growth rate (2.1%pa), which were obtained from the Preliminary Census Report 2008, are used to estimate customer connections by 2030.

Schedule of County Capitals and Other Towns For 33/66kV Grid Supply 2030 2012 Pop Pop # Customers 2030

City Monrovia Ganta Buchanan Gbarnga Kakata Voinjama

County

2008 Pop

Montserrado 1,010,970 Nimba Grand bassa Bong Margibi Lofa Grand Gedeh Margibi Maryland Lofa Maryland Sinoe 41,106 34,270 34,046 33,945 26,594

1,098,604 1,596,999 319,400 44,669 37,241 36,997 36,887 28,899 64,934 54,135 53,781 53,622 42,010 12,987 10,827 10,756 10,724 8,402

Zwedru* Harbel Pleebo* Foya Harper* Greenville

23,903 23,402 22,963 19,522 17,837 16,434 13,114 12,117 11,415 7,664 7,313 5,131 2,578

25,975 25,431 24,954 21,214 19,383 17,859 14,251 13,167 12,404 8,328 7,947 5,576 2,801

37,759 36,967 36,274 30,838 28,177 25,960 20,716 19,141 18,032 12,107 11,552 8,105 4,072

7,552 7,393 7,255 6,168 5,635 5,192 4,143 3,828 3,606 2,421 2,310 1,621 814

Tubmanburg Bomi Sacleapea Sanniquellie Karnplay River Gbeh Zorzor Cesstos City Nimba Nimba Nimba River Gee Lofa Cess River

Fish Town* Bensonville Robertsport Bopolu

River Gee

3,328

3,616 4,443 4,274 3,160

5,257 6,459 6,213 4,594

1,051 1,292 1,243 919

Montserrado 4,089 Grand Cape Gbarpolu 3,933 2,908

Barclayville TOTAL

Grand Kru 1,378,582

1,498,082 2,177,704 435,541

*Already included in the Cross-Border Electrification Project. In this indicative plan, it is proposed to have the following implementation periods for each phase so a proper implementation would be handled: Phase 1 Phase 2 Phase 3 Phase 4 2012 2015 2016 2020 2020 2025 2026 2030

4.2. Distribution System Development Philosophy

4.2.1. Medium Voltage for Distribution

The medium voltage for distribution Monrovia is 22kV. LEC has indicated that they intended to retain this voltage level for the Greater Monrovia and to use 33kV for all other areas in the country. Also LEC indicated that the 66kV subtransmission voltage would be limited to Monrovia. It is not clear why three levels of voltage are chosen within such a close range. An investigation might be needed to justify another voltage level between the 22kV and 66kV outside of Monrovia. For this report, the 22kV and 66kV combination is retained for Monrovia while 33kV is used elsewhere.

The proposed 22kV and 33kV Medium Voltage (MV) distribution lines would be fed from 66/22 kV and 225/33kV CLSG substations respectively. Two capacities of distribution MV lines are proposed: i) 3x150 AAC, for the main MV distribution lines ii) 3x50 AAC, for spur distribution lines.

4.2.2. Low Voltage Network It has been observed that while the low voltage distribution concept is the traditional practice in the Liberian system, high voltage distribution system (HVDS) is being introduced. HVDS presents a number of advantages principally in the area of lower technical losses. The downside of it is that HVDS is more expensive, and therefore less connections could be achieved with the available resources. In discussions with LEC they indicated that the stealing of electricity was so rampant that aggressive measures were being adopted to control it. One of the measures is to have zero LV network and do all distribution at medium voltage. LEC believe that this approach, while it may be at least 15% more expensive than the LV distribution, would justify the extra investment through the curbing of theft and to a lesser extent, reduction of losses. However it has been noted that the ongoing cross-border electrification project is being done exclusively with low voltage distribution. Perhaps a HVDS may be used in the urban centers where there is heavier loads and greater propensity to steal electricity and LV distribution retained for rural areas. Given the significant additional costs of opting for only HDVS, and the lesser impact that such approach could have in the rural areas (where other ways to reduce theft could be used instead) , it would be important assess the alternative approach that is proposed here before finalizing the plan for expanding the distribution system nation wide. Further discussion on the strategies adopted in Liberia and in other developing countries can be found in section 7.8. High Voltage Distribution System (HVDS) has been used in this indicative plan for the distribution of electricity throughout the system. It is expected that, by the time of implementation, the policy direction would become clearer.

4.2.3. Metering and Customers Service In principle, the current practice of split type prepayment metering would be used in the connection of service to customers. However the specifications of the meters may be reviewed to ensure the most current anti- tamper features are provided in the meter. Also all meters to be used for larger customers(e.g. with consumption in excess of 500kWh (or perhaps 1000 kWh)

per month, may be provided with GPRS modems to enable their remote reading, monitoring and disconnection, an investment in this feature (about $60 apiece) can be easily justified for such large customers. This metering system would facilitate the understanding of the load characteristics and better demand side management measures could be proposed. In turn, this will facilitate to defer large investments in generation capacity. Given these advantages, this is the metering system being proposed. With more and more connection of prepaid meters would come the need to aggressively establish vending stations as close as possible to the customer. This would be achieved through the use of third parties, especially operators of small businesses that run beyond normal working hours (e.g. gas stations, pharmacies). Such vending stations have to be linked by wide area network.

4.3. Phased Development of Distribution Network 4.3.1. Phase 1 (2013- 2015): Monrovia Current (2012) demand for Monrovia is 8.7MW whilst the forecast 2015 is 75.1MW. The incremental demand for T&D provision should be made accordingly so 66.4MW additional generation can be absorbed and will result in an additional 86,648 customers. In the LEC master Plan document the average cost for connecting one customer works out to be $950.65. This was obtained from actual contracts and is considered reasonable to use in calculating the distribution investment costs in the Plan. The estimated cost for the 86,648 customers is thus, $86,648 x 950,65 = $82.4Million.

4.3.2. Distribution Works Under Phase 2 Through Phase 4 (2016 2030) Phases 2 through 4 cover the remaining counties outside Monrovia. They also provide for natural continuous works in Monrovia beyond 2015. It is recognized that implementation of these Phases is contingent on the realization of the CLSG 225kV line project, complete with five grid substations (4 confirmed in Project, one additional proposed). Under these phases grid supply is expected to be extended to all county capitals and other selected towns. The expected 35% customer coverage outside Monrovia by 2030 is determined as off. 2008 Census Pop of Liberia 2008 Census Pop of Monrovia = 2,478,102 ( 3,489,072 -1,010,970) Extrapolate by 2,1% p.a to 2030 gives 3,914,583 Divide by 5 persons per household gives 782,917 Multiply by 0.35, gives 274,021Customers to be connected by 2030.

Deducting an estimated 26,200 (131,000/5) to be provided for in the cross-border electrification, works out to a deficit of 247,821 customers to be provided for in the Plan outside Monrovia. By 2030 the potential and existing customer population for Monrovia is similarly determined to be 319,400. The target is 70% coverage or 223,580. Deducting 86,648 already provided for in Phase 1works out to be 136,932 additional customers for Monrovia between 2016 and 2030. . The associated investment costs are: Monrovia 2016 2030 Outside Monrovia $136,932 x 950.65 = $130.2M $247,821 x 950.65 = $ 235.6M

In the absence of any detailed work these costs are for now shared equally among Phases 2, 3 and 4. Technical Assistance and Institutional capacity Development are provided at 2.5% and 10% of these costs respectively.

4.4. Implementation Arrangements 4.4.1. Appraisal Prior to Implementation of Each Phase As indicated earlier, no thorough economic, financial and technical appraisal has been done in this conceptual plan preparation . Thus, as part of the implementation, each phase of the Energy Access Plan, a full technical, financial, economic and environmental evaluation would have to be done. This would ensure that the project would remain viable even with changes in variables such as in consumption per capacity, cost of electricity, macro-economic indicators such as inflation, GDP etc. Also such appraisals would take into account changes in technology and construction practice as well as determine more accurate costing for the projects.

4.4.2. Project Packaging

For procurement the distribution component may be divided into packages as proposed below: Package 22 kV and 33kV lines Activity Supply& Erect Procurement Method ICB

Distribution Substations Metering Hardware Low voltage lines/service connect

Supply& Erect Supply Installation Only

ICB ICB NCB

Restrictions may be applied in the bidding documents to ensure that no bidder is awarded a combination of Packages that may be considered undesirable. Beyond Phase 1 the projects may as well be packaged by geographic area for management convenience during construction.

4.4.3. Project Management As for the case of the expansion of the transmission network, it is proposed that LEC capabilities are enhance in order to be able to properly handling of project procurement from tendering, through evaluation, negotiation and contract signing. LEC would be responsible for supervision during construction. In Phase 1 the Management Consultant con support the implementation of the investments. For subsequent Phases, there would be the need for technical assistance in the absence of Manitoba Hydro whose current Contract would have expired.

4.4.4. Institutional Capacity Development The need for extensive re construction of the Liberian electricity supply system has been wellstated. What would be required to complement any such intervention would be the strengthening of the LEC as an institution. This has begun with the appointment of a Management Consultant, and will need to continue with a set of specific measures aimed to strengthen capacity of LECs personnel and improve the attention to the customers and the quality of the service. These measures are discussed in greater detail in sections 7.1., 7.5 and 7.6 of this document. In sum, in further pursuit of LECs strengthening, the following may be needed: Staff training and development Improved Work Practices and Procedures ICT systems (including corporate Wide area Network, Commercial Management System (CMS) and Incident Resolution and Management System (IRMS)) Procurement of Construction Equipment, Measuring and Testing Equipment. Modern Offices

An estimate of 12.5% of the proposed capital investment costs are proposed for this purpose.

4.5. Summary of Distribution Investment requirements

Cost Phase Phase 1 Phases 2-4 Phase 2: Phase 3: Phase 4: Description Distribution Works Monrovia (2013 2015) Distribution works Monrovia (2016 2023) Distribution Works All Liberia (2016 2020) Distribution Works All Liberia (2021 2025) Distribution Works All Liberia (2026 2030) Subtotal Add 12.5% Institutional Capacity Development* Add 10% for Physical and Financial Contingency Total for Distribution Investment requirements (Million US $) $82.4 $130.2 $78.5 $78.5 $78.5 $448.1 $56.0 $44.8 $548.9M

*Includes Provision for Transmission as well.

5. Demand Supply Balance 5.1. Electricity Demand Projections. The post-war power sector of Liberia is effectively divided into two segments; the Monrovia area and the rest of Liberia. The greater Monrovia area currently has some utility service being operated under a management contract with Manitoba Hydro International. For this segment there is some data available from the four years of very limited operations. However, the limited coverage and nature of power network operations in the greater Monrovia area has meant that there is inadequate statistical information upon which customer characteristics can be derived as a firm basis for demand projections. Then there is the rest of Liberia which has not had any

public electricity supply for about two decades and therefore has neither electricity officials in the field nor recent real-time data on customer characteristics or profile. Accordingly, all demand forecasts for Liberia must be viewed to have much larger uncertainty than would normally have been expected. In 2008 the International Finance Corporation (IFC) projected, based on their willingness to pay survey of 1000 households that the demand for electricity in Monrovia would come from 20% of households being connected to the grid within two years. Thereafter the forecasts anticipated 400 additional connections a year until 2020. Demographic growth was projected to add 1.8% annually to sector demand and economic growth was expected to add another 1.8% per annum. In the period after this IFC demand projection was prepared the LEC has used more recent data from its distribution operations to prepare new forecasts. While recognizing the fundamental uncertainties of forecasting demand for electricity in Liberia described above, there has been several recent demand projections for Liberia undertaken by the Liberia Electricity Corporation (LEC) for the greater Monrovia area (2012), and for Liberia as a whole, an analysis in the document The Options For The Development Of Liberias Energy Sector (World Bank, 2011), and most recently a study on supply options by Norconsult (2012). These forecasts assumed to varying degrees that the increase of demand will come from increased in households connected but also from the connection to the grid of large commercial and industrial consumers in and outside Monrovia, notably from the agriculture and mining sectors. On the other hand, little attention is paid to the increase in demand served by off grid means, except in the projections of the The Options ForThe Development Of Liberias Energy Sector (World Bank, 2011). While projections for Monrovia are generally comparable in the three studies, the projections for demand growth outside of the capital diverge significantly in those studies, reflecting the differences in the underlying assumptions, especially after 2020. The next paragraph summarizes the scenarios for demand growth that will be used in the rest of the document, building on these various studies. Three scenarios for demand growth associated with the on-grid expansion in the country are presented here. They have been chosen to reflect the decision of the GoL of adopting an ambitious plan to increase access that assumes the removal of any physical or financial constraint. First, a high demand and low demand scenarios are defined, using the projections of the The Options For The Development Of Liberias Energy Sector analysis for high and slow growth, and then a third, expected scenario is developed, using the projections of Norconsult up to 2015/2016, and the ones from the unconstrained LEC analysis up to 2030. The high demand scenario portrays a situation where LEC is able to attract all major industrial and commercial customers into it customers base, where there are electricity is available from either domestic or regional sources as needed, and the expansion of the network has ben undertaken as planned. The expected scenario is one where no physical nor financial constraints

hinder the expansion of the network, and electricity is available to meet the demand as it grows, but in contrast to the first scenario, the evolution of effective demand although increasing at an accelerated rate, shows a higher price elasticity, and this is reflect in the growth of effective demand. Last, the low demand scenario is one where there is a significant growth in the expansion of demand, but that growth is bounded by some constraints in the system, that could be financial or physical in nature, such as the difficulties to securing financing for the expansion of the grid, or an actual growth of effective demand slower than planned, because high tariffs, reflecting a fuel-based generation, dampen the growth of effective demand.

Adopted On-Grid Demand Projections 2013 High demand growth 24 Low demand growth 24 Expected scenario 24

2014 66 30 45.4

2015 108.5 36.0 66.8

2020 189.7 103.5 117.5

2025

2030 378.1 159.2 202.1

On-Grid Demand Projection (MW) - (Excluding Off-Grid)

500 450 400 350 300 250 200 150 100 50 0
AFTEG OtherGrids AFTEG Monrovia Pessimistic Growth

5.2. Supply projections The LEC currently has 22 MW installed capacity, all diesel fueled high speed generators. The effective supply however is about 16 MW after taking into consideration the non-availability of 1 or 2 MW for maintenance reasons, the operation of the generators at 80-85% of rated capacity for maximum thermal efficiency and the spinning reserve requirement of 2 MW.

The effective supply will increase from 16 MW to 24 MW when the World Bank/IDA HFO project starts operation (3Q of 2014) and will reach 32 MW (dry season) or 76.8 MW (wet season) when Mount Coffee becomes operational (2Q in 2015). The effective supply capacity will increase by another 8 MW when the JICA HFO plants starts operation (end of 2015). Accordingly from 2016 the effective supply would be 40 MW (dry season) and 84.8 MW (wet season) until the WAPP CLSG interconnection commences operations, in 2018, and 18 MW are added, bringing the total available capacity to 54.4 MW in the dry season and 99.2 MW in the wet season .
Generation Capacity (MW) 2012-2018 120 100 80 60 40 20 0 2012 2014 2015 2016
Wet season

2017

2018

Ao Dry season

5.3. Supply Options and Least-cost Generation Expansion Plan The electricity supply sources available to Liberia to meet the shortfall include hydroelectric, thermal, biomass and the option of regional interconnections. These options have different costs, and also different lead times. A review of the most recent assessments of unit costs and relative ranking of the alternative has been carried out in order to rank the plants by cost and establish an order of preference, and the results are summarized in the table below. The ranking of plants indicated by the two sources are consistent with each other except for the ranking of the biomass plant (wood chips) and for the cost of the HFO plant. With respect to the plant using wood chips, the figure quoted by the Norconsult study reflects the cost included in a unsolicited proposal received by the Government, and therefore it needs to be seen an upper bound reference, which could be lower if such a project were tendered competitively. This is why as a starting point for an estimation of the true levelized cost of this generation option, a benchmarking cost of this type of technology is adopted for now, as a first estimation of the true levelized cost. Further work through an independent assessment of the costs and benefits of such plant is needed to produce a more exact figure. In the case of the HFO plant, the Norconsult study report of 26 cents/kWh was obtained partly from Singapore prices and partly by applying a

rule-of-thumb approximation; energy costs from HFO plants are about 50% of the costs from a high speed diesel plant considering the Singapore reference. In contrast, the second column uses the most recent estimation from HFO, as reported by LEC based on its interaction with private firms providers of HFO in Liberia: it is expected that the cost of HFO would lead to 25% savings compared to the cost of the diesel. Using the latest report of fuel cost for generation in the April monthly report of LEC, the cost for diesel based generation is 42.03 cents/kWh, which thus will yield a cost of 31cents/kwH for HFO. The ranking of the plants based on levelized cost having been established in principle, the leastcost generation expansion plan for Liberia is to seek to exploit these resources in the order of preference recognizing the capacity available from that source and the realistic lead time for bringing that source into actual production. Because of this dual dimension of any supply option, it is recommended that an action plan for the short term includes not only the preparation of those projects that will be implemented first, but also -- and with the same order of priority-actions needed to assess or prepare generation options that would come on stream at a later date. Preparing an achievable least-cost generation expansion plan for Liberia requires an estimate of the realistic total lead time required for each plant as indicated on the table above. This must consider the realistic duration for completing the following sets of activities: a) Studies(Financial Study, EIA etc), project definition, design and documentation, b) engagement with private sector if the Government wants to develop generation capacity led by private sector to leverage public resources and use private sector expertise to improve sector performance; c) securing financing, executive & legislative approvals, d) Off-shore Manufacturing, e) Shipment & Delivery, and f) Erection/Installation. The following table shows the summarized order of preference which is based solely on the total generation levelized cost of the various plants and indicating their estimated lead times.

Supply Source

Total Levelised generation Cost

Installed Capacity

Total Est. Lead-Time

(US Cents.kWh) Update as of June 2012 10 11 24 16 23 11-13 16 23 16 23 26 31

(MW)

(Months)

Norconsult

Mount Coffee (Hydro) WAPP-CLSG BRE Wood Chips (Biomass) SP-1B & 2 (Hydro) Mano (Hydro) HFO Plants (WB, JICA, Government) High Speed Diesel (Existing) (LEC April 2012) Diesel (Leasing) (Additional cost due to premium mobility and operation)

11 16

66 80 20-36 198 90 (50) 30

36 54 60 18 72 84 24

42

42.03

22

>42.03

12

Source: Based on Geoscience (1998); Ciampiatti (2009); Stanley Consultants (2008); ESMAP (2007); LECs Monthly Report (April 2012).

5.4. Demand-Supply gap Looking at supply demand graphs, one will notice there is a gap of 8 MW from the 2013, which increases in 2014 to 21.4 MW. Once the Mount Coffee plant becomes operational in 2015, there is no supply gap during the wet season except for a small one2.3MW-- in 2017, but the gap continues to increase during the dry season, until it reaches a peak of 47 MW in 2017, and persists still in 2018 with a gap of 42.8MW, despite the electricity imported from WAPP. This supply deficit is finally removed in 2019 when the other hydro plants (eg SP-1B &2) commence operation.

The lead time comparison on the above table shows that the leasing or rental of diesel generators is the quickest way to address any demand-supply gaps. This option is however expensive and has already been discarded by the Minister as contradicting the decision of Government to avoid diesel based alternatives. The ranking of supply options shows that hydro plants in Liberias resource portfolio, the CLSG regional transmission line, and the options to develop biomass plants using domestic inputs are a major part of the countrys electricity supply strategy, both to expand the electricity available to the population and as a mean to bring down the cost of generation, and thus of tariffs to end users. Some of these projects are already under way, ie. the rehabilitation of Mount Coffee and the connection to the CLSG regional transmission line, but given the potential benefits for the country, it is recommended to give a strong priority to launch the preparatory work needed to assess and develop the other projects listed in the table.

This said, given the lead time for the least cost options to come on stream, it is necessary in the short term, whilst these preferred supply options are being developed, to consider the next best options to address the supply gaps that will emerge as early as 2013. A first step to reduce the supply gap could be the introduction of interruptible tariffs as an option for commercial and industrial customers who probably have self generation capacity. They will be offered electricity services at a discount on the understanding that their supply can be interrupted during peak demand periods or when needed to prevent system overload. This arrangement has two advantages; it gives the utility the means to reduce peak demand, thereby postponing the need to invest into new generation capacity, and it also provide economic incentives to medium and large users to connect to the national grid, helping to increase LECs customer base. Based on preliminary estimation of the amount of electricity currently selfgenerated in Liberia, it is estimated that such a strategy could help reducing the peak demand between 2013 and 2015 by about 15-20 MW. This is particularly important in 2013, since short of using leased generation (which has been discarded by the Government), no new generation can be made available so quickly. To be successful, this approach to manage demand to address the issue of a supply gap would need to be grounded on a pro-active and clear outreach to clients, and on a good forecast of the timing when there will be capacity constraints. Turning now again to the least cost options analysis for generation, HFO plants appear as the next best option to address the supply gap in the short term, in addition to the management of demand discussed in the previous paragraph. In this specific case, a faster than usual turnaround could be achieved by piggy backing on all preparation studies already done for the 10MW WB project. It will be necessary to update the studies if additional plants are brought into stream, but this could be done in about 2 months time. Using the expected scenario for demand projections, the supply gap to be closed amounts ranges from about 21.4 MW in 2014 up to 47 MW of effective supply during the dry season in 2017. Taking into account the need for reserves and the capacity factor, this mean that about about 30 to 60 MW of additional capacity would be needed between 2014 and 2017. These additional capacity is needed to complement the dry season production of the Mount Coffee plant at least until the Via reservoir is constructed to enable the firming up of the Mount Coffee generation.

5.5. Implementation arrangements for additional generation The least-cost generation addition plan outlined above, that will enable Liberia meet its electricity demand comprises the following plants: Mount Coffee hydro, WAPP-CLSG, St. Paul hydro, Mano River hydro, WAPP Cross-border supply and HFO plants, of which three have already been identified (Government; WB-LESEP Ad.Fin, and JICA). The recommended implementation actions in respect of these projects are discussed below.

i.

Mount Coffee Hydro The reconstruction of the Mount Coffee hydro plant is considered the least cost source among all the supply options. Rehabilitation is currently underway with the financial support of various donors including Norway, KfW, EIB and of the Government of Liberia. This plant was originally commissioned to come on stream in 2016, but it appears that the GoL is committed to accelerate the process and have the plant back into operation in 2015. It is recommended that the study of the possible development of the Via storage reservoir which will mitigate the drop in generation from Mount Coffee during the dry season, should proceed at the same time but as a separate exercise so that the construction of the reservoir, if found economically viable, could start as soon as possible, but that this analysis does not further delay the reconstruction of the Mount Coffee plant.

ii.

St. Paul Hydro The size of the power plants proposed for construction on the Saint Paul river are such that this project, if implemented, would have a significant and positive impact on the long term energy supply capability and security of supply especially in the period from 2020 to 2030. It is therefore recommended that the Government of Liberia commissions the feasibility and other studies required to inform the decision on its future development. In addition, the GOL may wish to consider taking the proactive steps needed to reserve or acquire the target reservoir area in order to limit the disruption, obstacles and challenges to the future development of these projects. Mano River Hydro The Mano River is one of the hydroelectric power prospects included in the least-csot plan. Although the generation facility associated with this hydro development would not have as significant an impact as the developments on the St. Paul River, the Mano power plant will make a contribution. The GOL should therefore work with the other members of the Mano River Union to advance the preparation and development of the project.

iii.

iv.

Biomass generation (Wood Chips) Based on the least cost analysis, it would be important for the Government to assess and conduct a due diligence to determine whether or not there is enough availability of wood chips in Liberia, whether and how could such plant become a viable proposal and at what cost, and finally if the answers to the above are positive, to examine the potential to tender competitively a biomass project to attract private investors with a project that would be bankable and would be beneficial for the country as well as environmentally

sustainable. At this point, there are more questions than answers, but given the uncertainties on the fundamental of the projects, it is difficult to see that biomass generation would take place in Liberia, unless the Government takes the lead in the preparatory work to determine its viability. v. WAPP-CLSG Regional Transmission Line The WAPP-CLSG regional transmission line, which is under development has a major and long term role to play in the provision of electricity services to the citizens of Liberia. The facility will provide Liberian consumers with access to the more competitively priced generation that is available from some of the other states in the sub-region. It is also noted that without this facility, the growth of the power sector in Liberia will be limited by either its indigenous energy sources or by the continued dependence on expensive imported petroleum products for the generation of electricity. The WAPP CLSG regional transmission line is also important for Liberia, to the extent that it includes the construction of the Mount Coffee substation and of the line between this substation and Monrovia. The Mount Coffee substation is a key element for the Liberia power system and the CLSG transmission line since this will be the interconnection point of the regional network with the Monrovia system, and it will allow to evacuate the power from Mt. Coffee. This interconnection point will allow to Monrovia, the largest load center, to meet its demand through power exchange with neighboring countries in the short-term and also to absorb the potential domestic supply that is generated outside of Monrovia. It is therefore important to ensure that the substation in Mount Coffee is designed in order to accommodate (i) the reception of the CLSG regional transmission line, (ii) the connection with Mount Coffee hydro plant, and (iii) the interconnection with the Monrovia power system.

The initial power technical power transfer is up to 149 MW and the available supply generation in the line will depend on the Purchase Power Agreement that each government negotiated. In the first phase, Cte dIvoire has already committed to make available 83MW to the CLSG Transmission Line, Cte dIvoire has already committed to put 83MW at the disposal of the CLSG, but the allocation among the three countries, including Liberia will need to be negotiated. For reasons of supply security and minimum cost therefore, it is in the best interest of Liberia to enter into long term supply contracts for supply over the CLSG. Fortunately, the lead time to the commissioning of the CLSG is long enough for an interested power provider to make arrangements for an increased level of supply. It is therefore recommended that the GoL and LEC begin discussions with credible prospective suppliers, starting with those in Cote dIvoire, to explore

opportunities for the purchase of additional power and seek commitments for long term supply at the most competitive price. vi. WAPP Cross-border The ongoing WAPP cross-border project will provide electricity supply from Core dIvoire to several Liberian towns and communities that are close to the border between the two countries. The authorities in Liberia are encouraged to monitor the progress of this work and take all actions necessary to ensure the timely execution of these works. HFO Plants Of all the plants included in the least-cost expansion plan, the HFO plants are the ones with the shortest lead time, and the lower up-front capital cost. So these are the plants being relied upon to bring the quickest relief to the supply shortfall situation that is foreseen. An analysis of the demand-supply gap has indicated that there would be a gap of 30 to 60 MW between 2014 and 2017, and there has been an initial analysis of how to bring in additional 30 MW, either at once or sequentially. This additional generation capacity could benefit from the preparatory work that is being done now for the 10 MW WB-HFO plant. It could be undertaken as an IPP led by the private sector, thereby freeing public resources to be made available for investment in transmission and distribution. Alternatively, this additional capacity could be procured by scaling up the current publicly financed project, but this option will give up the possibility of tapping on to private sector financing, and will use instead public resources with a high opportunity cost. Both options are currently being analyzed by the Government.

vii.

6. Fuel Supply Infrastructure Given the contribution of the fuel to the cost of electricity and given the decision of the GoL to develop additional thermal generation capacity in the near future to meet the increasing demand for electricity that is expected to increase at an accelerated pace over the next decades, it becomes critical for the Government to secure reliable supply of fuel in sufficient quantities, at the more competitive price than what is available today in Liberia. These efforts of the Government in the short term complement the longer term agenda of shifting the generation mix towards other more cost efficient sources of Energy.

Achieving this objective would require addressing several issues, notably: Fuel pricing Commercial arrangements for importing, storing and transporting the fuel

 Infrastructure for importing, storing and transporting the fuel Role of the Government to lead this process, and ensure that the final solutions adopted will enlist an active private participation, while avoiding the creation of monopolies in the commercialization of such a critical input and associated infrastructure.

The paragraphs below give an overview of some of the elements that need to be considered to address each of these aspects, and a more detailed analysis of possible solutions can be found in a review of the fuel delivery infrastructure undertaken by OPTEC Energy Services of Canada in March 2011 as part of a feasibility study for the supply of HFO to Monrovia for electricity generation.

6.1. Supply Price for Grid-Electricity The electricity price build-up as reported by LEC (ref. LEC Business Plan, March 2011 and financial results for Jul2010-Jun2011) and summarized on the table below indicates that fuel costs were initially expected to contribute about 78% of the total cost of supply excluding depreciation charges. Business Plan (March 2011) Description of Cost Component c/kWh % of Budget (excl. Dep.) % of Actuals Jul10-Jun11 Depreciation Charge Fuel Cost O&M Costs Administrative Charge Total 7 32 5 4 48 78% 12% 10 100% 80% 9% 11% 100% Actuals

The financial results for July2010 June2011 show that actual fuel costs for the period contributed 80% of total. The current price for grid-supplied electricity in Liberia is reported to be 51.4 cents/kWh excluding duty on fuel and 53.4 cents/kWh when fuel duty is included. The comparable price in the sub-region ranges from a low of about 5 cents/kWh in energy-rich countries such as Nigeria to about 25 cents/kWh for less energy endowed countries like Cape Verde. The average electricity price for countries in the Sub-Saharan Africa is about 15 cents/kWh with the highest being about 35 cents/kWh. By any comparison therefore, the current price of grid electricity in Liberia, which appears to be driven primarily by the cost of fuel, is rather high and has micro as well as macro-economic implications for the country.

6.2. Fuel Pricing Since the fuel component currently accounts for 80% of the cost of electricity supply, all the subcomponent in this cost build-up (ie commodity price, shipment & handling, storage & delivery, duties, taxes and other charges) require detailed review and analyses in order to explore avenues to reduce the cost burden imposed on consumers and the economy as a whole. In order to address the high cost of electricity supply, the dominant mode of generation must of necessity be shifted from diesel fuel oil to a lower cost alternative such as HFO in the shortest possible time. In the meanwhile however, the current delivered cost of diesel fuel oil for power generation is reported to be $4.31. It is understood that this delivered cost includes 64 cents for duties and taxes; hence these account for 15% of the total. In the interest of mitigating the cost of electricity during the period while expensive diesel is still the main source of fuel, the Government may wish to consider the temporary removal/reduction of the duties, taxes and other charges until a more reasonably priced fuel such as HFO becomes the primary fuel source for power generation. Furthermore, since the fuel requirements for power generation are set to increase exponentially with the proposed addition of new generators, it is important that the capacity, reliability and cost effectiveness of fuel delivery arrangements and infrastructure are reviewed.

6.3. Fuel Supply and Fuel infrastructure for Thermal Generation Fuels for power production as well as all other petroleum products available in the country are imported from the international market. The LPRC has the exclusive right to import, which it now cedes on a franchise basis to some seven importers who have met franchising criteria. The importers deal with traders on a CIF (cost, insurance, freight) basis in Monrovia, and the traders generally obtain supplies in the Gulf of Guinea area-most commonly from the SIR refinery (Abidjan, Cte d'Ivoire) or SNR refinery (Limbe, Cameroon). Usual cargo size varies between 3500-7000 tons, which results in unusually high delivered costs attributed largely to: (a) high risk premiums for Liberia charged on FOB price, marine freight, and cargo insurance; and (b) deteriorated condition of the receiving terminal and lack of acceptable international safety standards. At the old LEC central power station site located on Bushrod Island, about 1.5 km north along the shore from the Bong Mines pier, there are eight storage tanks that were used for Heavy Fuel Oil (37,120 barrels) and Automotive Gas Oil (23,140 barrels). There also appears to be the remains of a receiving jetty on the shoreline near these tanks. If HFO-based power plants are to be commissioned in the coming years, urgent attention would need to be given to upgrade the fuel supply infrastructure. The March 2011 feasibility study for the supply of HFO to Monrovia also reviewed the state of the fuel delivery infrastructure. The conclusion of this review was that the most probable scenario aimed at providing a secure source of HFO for the LEC power plant would be as follows: The arrival of HFO cargoes at the rehabilitated BMC pier for discharging into the adapted BMC tank by means of a new twelve-inch pipeline, The construction of a new eight-inch line from the tank would join the existing rehabilitated eight-inch line, towards the rehabilitated LEC tanks.

The cost of carrying out the recommended rehabilitation works was estimated to cost US$ 4.9m. It has however been pointed out that there may be legal issues relating to the proposed rehabilitation and use of the BMC facilities. If the rehabilitation and use of the identified existing facilities are not possible, then the report estimates that US$ 2.44m and US$ 3.85m may

be required for the provision of new pier operating equipment and new main storage tanks respectively. In addition, the report also noted that Extensive environmental protection work will be required for each element of the project.

6.4. Fuel Requirements and Sizing of Fuel Import Infrastructure In March 2011, a review of the fuel delivery infrastructure was undertaken by OPTEC Energy Services of Canada as part of a feasibility study for the supply of HFO to Monrovia for electricity generation. The study reviewed the infrastructure, including the oil jetty; single point mooring; offshore and onshore pipeline; tank farms and the strategic storage. It also analyzed the distribution/delivery arrangements. The study considered the optimal sizing of fuel infrastructure for a various power generation scenarios concluded that for the 40 MW (study) case, the optimum cargo size is 10,900 tonnes with a yearly HFO requirement of 74,460 tonnes and a storage capacity of 18,520 tonnes. The report also determined that the corresponding optimum cargo size for a 30 MW plant was 9,100 tonnes with a yearly HFO requirement of 55,845 tonnes and a storage requirement of 15,000 tonnes. The corresponding annual expenditure on HFO has been estimated to be US$ 50.0 million or US$ 37.5 million for the 40MW and 30MW installations respectively. 6.5. Implementation Arrangements for Development of Fuel Supply Infrastructure The Minister of Energy has indicated that the Government of Liberia has decided to undertake the rehabilitation of the fuel delivery infrastructure as a necessary public expenditure item in order to remove this potential bottleneck. Furthermore, this is a desirable approach because it will avoid placing this critical infrastructure under the control of a private entity and rather leave it under public control. The facilities for handling HFO are to be operated as an integrated whole. The equipment and contractors needed to execute this kind of marine work may not be available in Liberia and may therefore have to be mobilized from outside the country. Phasing of the project such that it requires repeated mobilization may turn out to be expensive. For these reasons, it is recommended that the work scope relating to HFO infrastructure be executed at the same time as the situation does not lend itself to phasing of investments.

Accordingly, the Government is encouraged to expedite the implementation of this decision and ensure that the capacities of the pipelines, storage tanks and other related infrastructure will allow the optimization of the parcel size for petroleum imports.

7. Financial Performance of the Utility and Quality of Service for the Users

7.1. Commercial Management Ensuring financial sustainability of an utility providing electricity to end users require an efficient management of the utilitys commercial activities. Commercial management covers the efficient execution of all activities related to: (i) contracting of new services; (ii) regular commercial cycle (metering, billing and collection at periodic intervals); (iii) management of unpaid bills, including service disconnection/reconnection; (iv) attention of customers (both under prepaid or credit regimes) in commercial agencies and through call centers. Since the late 80s and early 90s, most utilities in developed and emerging countries have incorporated a Commercial Management Systems (CMS) to enable efficient, transparent (and thus accountable) execution of all commercial processes and activities described in items (i) to (iv) above. The CMS is an Information Technology (IT) application developed for utilities and other massive retail companies. Its functionalities are currently standardized, and there are several software packages available in the IT market providing them. Thus, LEC should implement as soon as possible a state-of-art CMS to support its commercial operations. The whole process should take no more than 8 months from the date the contract with the selected provider is signed. Incorporation of the new CMS requires building up and keeping constantly updated a reliable customer database.

7.2. Connection cost The one-time connection cost by the households is often a major barrier in enhancing access to electricity. The average unit cost in LEC is about $900/household inclusive of the distribution system, service line, meter, etc. Thus, expansion of electricity access in Liberia requires the adoption of concrete actions in three fronts to address that barrier. On the one side, efforts should be made to reduce the connection cost by optimizing the physical design of the facility and the procurement of its components (replacing expensive imported material). On the other hand, a very pragmatic approach on how to cover that cost should be implemented. It should include

both financial arrangements targeting consumers who can afford to pay that cost, and subsidization of those segments of the population unable to bear it.Last, given the high cost of electricity services, it would be useful to monitor the lasting impact of programs to subsidize the connection to check the extent that the cost of electricity acts or not as deterrent for actual consumption.

7.3. Tariff methodology and principles GoL has followed the system of cost-reflective price of electricity for the customers so far. However, based on the diesel generators, the unit cost of electricity tends to be $0.50-0.54/kWh (May 2012 price) which makes the cost of doing business prohibitive. It is anticipated that by switching to HFO generation, and by rehabilitating Mount Coffee hydro plant, the average cost of generation could come down significantly. Pending development of detailed tariff methodology, following broad principles are being proposed on the basis of which a tariff schedule may be developed: i. Tariffs for each category of customers (households, commercial and institutional, industries/mining/forests, street lights, agriculture) should be determined as to reflect cost of efficient provision of electricity service to users in the category. ii. In case direct subsidization of targeted low income consumers is considered unviable or inconvenient, an Increasing Block Tariff (IBT) system may be introduced for the household sector. Residential users who consume very little represent the the first block (0-30 kWh) and will pay a lifeline block, which may be slightly subsidized (say 75% of the actual cost of supply); those users whose consumptions fall within the second block (30-150 kWh) may be priced at full cost of supply; and those who consumed above, the third block (above 150 kWh) should be priced such so as to recover the full subsidy provided to the lifeline household customers. To avoid subsidizing non-poor users, it is important to clarify that these tariffs apply to different users based on their total consumption, so that a client using more than 150kWh will pay the highest price even on his first 29 kWh consumed. iii. Commercial and Institutional customers, street lights, and agriculture, if supplied at low voltage, should be charged the full price based on the cost of efficient supply. iv. Industries/mining/forestry entities, generally supplied at high voltage, should not be charged the distribution costs corresponding to lower voltages, as they are not creating any costs to LEC at those levels. v. Electricity generation costs faced by LEC (own production and purchases to other generators) should be passed-through into tariffs paid by end users through the periodic and automatic application of clear and publicly disclosed mechanisms, based on strict recovery of those costs. While Liberia has a thermal component based on imported fuel, the pass-through mechanism should be applied on a quarterly basis.

vi.

vii.

Calculations should be carried out by a group of independent experts and publicly disclosed before the date of effective application. Till such time that sufficient generation capacity is available in Liberia, interruptible tariffs for commercial and institutional customers, and for Industries/mining/forestry entities (especially those with self-generators) may be introduced as part of a menu of options made available to the customers. The interruptible tariffs should be set as to reflect the principle of recovery of efficient costs, which should result in a discounted level compared to firm-supply tariffs. Feed-in tariffs must be developed for LEC to receive excess energy from mining companies or other large generators, or from other renewable sources. They should reflect a fair allocation among both parties of benefits resulting from those transactions.

7.4. Customer Mix For a financially-viable utility, it is important for LEC to have a balanced customer mix. This means that while meeting its target of connecting poor households in the coming years, it should also make efforts to connect well-paying commercial and institutional customers (hotels, embassies, etc) and light/small industries as a matter of priority. It is important to highlight that the sustainability of the expansion of the electricity service relies on the achievement of a critical mass of wealthy consumers, able to pay tariffs reflecting costs incurred by the utility to efficiently serve them and also subsidize low income users. This has been the path for every country in the world that achieved universal access (or is close to that target) and it is fully applicable for the case of Liberia.

7.5. Attention to the Customers and Quality of Service Monitoring LECs performance is likely to be judged by its customers by the quality and reliability of electricity supply, as it expands its operations in the coming years. International experience indicates that customers are willing to pay cost-reflective electricity prices if they are satisfied with the quality of the service provided by the utility. It is, therefore, extremely urgent to develop and disseminate standards on quality of service provided to customers, as well as mechanisms to effectively measure them and ensure their enforcement. Besides, LEC must implement operational procedures to receive customers complaints due to bad quality in electricity supply, and effectively address them.

Centers of attention to the consumers need to be established and customer rights and obligations need to be articulated. Similarly, technical performance standards and targets (forced outage; voltage profile; frequency stability; maximum duration of interruptions, fatal and non-fatal incidents; etc) need to be developed and widely disseminated. Monitoring of compliance with these quality standards and making public how well (or how badly) the utility compliance with them is an important tool towards promoting better services to the consumers, and developing loyalty of customers to their utility. The use of the website, the radio and other communication media are important tools for users to be able to comment on the type of service received, and they all play an significant role in increasing accountability of the service providers. A key tool to support a better attention to customers and improvements in the quality of the service is an Incident Resolution and Management System (IRMS). Like the CMS, IRMS is an IT application that becomes a highly effective tool for attention of customers claims and improvement of quality in electricity supply. It allows to minimize time elapsed between reception of the claim and restoration of regular electricity supply and, at the same time, maximize efficiency in execution of the activities that the company must carry out for that purpose. Conceptual design of IRMS is based on setting a link between each point of electricity consumption and the electric networks involved in the supply. This allows quick identification of the potentially faulty components of the networks related to a claim presented by a customer and sending the operational crews straight to those installations. At the same time, this makes possible to properly manage potential overflows in claims related to faults involving large number of consumers. Links between customers and network assets are the components of the database of the IRMS.

7.6. Capital and operating cost estimates, and phasing of investments for system improvements Based on international experience, the investment cost for the implementation of the tools discussed above (CMS+IRMS) should amount to US$ 2-3 million for LEC as a whole.

7.7. Implementation arrangements for handling commercial aspects There is a growing trend of outsourcing a number of commercial operations, and thereby keep the headcount low. Functions like meter-reading, distribution of bills, collection, service disconnection and reconnection can be competitively bid out. However, the out-sourcing process has to take into account the objective conditions existing in Liberia (availability of qualified private companies; competitive environment; socio-economic conditions; etc), and the

capacity of LEC to oversee proper performance of these contractors, including the definition of clear responsibilities the capacity to supervise results and ensure the transfer to the utility of all relevant commercial information. Therefore, the decision to outsource these types of activities need to focus on the development of reliable providers of those services, on the use of competitive selections of providers and periodical rebidding of contracts to promote competition, and ensure that LEC has the capacity to manage these contractors.

7.8. Reducing losses from thefts An important aspect of an effective commercial management in an utility is its capacity to reduce losses from theft. In that respect, experience in many countries has shown the effectiveness of public campaigns to promote payment of bills, of the capacity of disconnecting non-paying customers, and perhaps most importantly the effectiveness of focusing the efforts to improve payments of larger customers, which may be fewer in numbers but which account for the bulk of the utilitys revenues. The latter has the trickle down effect of fostering compliance among smaller users, when they see that other larger ones have been sanctioned for non-payment. Efforts to improve the payment record of government agencies is also a central part of this campaigns to reduce losses, since in many developing countries, the government is a major customer of the utility. (Part of the challenges in this case, is often the existence of unclear accounting, as government consumes electricity but also provide financing, subsidies and other resources to the utility). LEC in Liberia has used several of these techniques to reduce losses and improve rate collection. It also has adopted in many cases a system of prepaid consumption which can be effective in low income areas to help customers manage their electricity use, but will not be sufficient in itself to increase collection rates, since as stated already the bulk of revenues comes rather from larger users. LEC has also embarked on using high voltage distribution systems with relatively small transformers, in addition to the prepayment meters, even though the initial capital cost is high for this type of intervention. The initial results appear to be favorable to reduce electricity theft in poor neighborhoods.

8. Renewable Energy, Off-grid System, and Rural Electrification

8.1. Overview of renewable energy resource resources in Liberia As Liberias energy sector develops, the GOL is analyzing the options available to meet the populations demand for modern energy services in a sustainable manner while also striking a balance for rural and urban energy services. While the emergency situation urged to focus on meeting Liberias short-term power supply needs, it is Governments priority to review options

that are available to Liberia for the medium and long term, as well as the capacity to feed into an interconnected grid and the options for off-grid. In this regard, renewable energy resources play a key role to meet the populations demand for energy in a sustainable and affordable manner. The Government of Liberia has been supported by donor in order to identify the renewable energy resources. Studies indicate that Liberia is endowed with significant renewable energy resources, including biomass, hydropower, and solar energy. The following section summarizes the key findings over the past years, and section 5.5 on supply options discussed the most significant of these options to use renewable resources to expand Liberia generations capacity. A detail renewable resource assessment for Liberia would help determine the applicability and the schemes of renewables for Liberia. RREA, through donor-funded programs, is including a series of assessments with the purpose to define the technical and feasible potential as well identify the possibilities of grid and off-grid development.

8.1.1. Biomass Biomass resources currently meet about 99.5 percent of the Liberian populations energy needs and are therefore vital to basic welfare and economic activity. Traditional biomass products such as firewood and charcoal are the primary energy source used for domestic cooking and heating. But other more efficient biomass technologies are available that could open opportunities for agriculture and rural development, and provide other socioeconomic and environmental benefits Considering the potential biomass resources or the expansion of key existing resources such as oil palm, coconut, and sugarcane, Milbrandt (2009) evaluated fuel and power production potential on available cropland. The study estimated that of the total cropland in Liberia, only 6 percent is currently cultivated and that the remaining cropland amounts to some 3 million hectares. It is unrealistic to assume that all of this land would go to cash crop cultivationa portion of it may be needed to maintain forest ecosystems and their unique biodiversity, or be used for food crop production and other agricultural activities, or be converted to urban land. Therefore, the study evaluated the fuel and power production potential of biomass resources under three scenarios: using 10 percent, 25 percent, and 50 percent of the available cropland for cash crop expansion. Milbrandts assessment concluded that Liberia has a power production potential from biomass resources of 21,600 GWh/year assuming up to 30 percent of the cropland were to be used for expanded cash crops production. These figures have to be considered with great caution and certainly only refer to the theoretically available resources evaluated largely on the basis of satellite imaging.

Beyond Milbrandts (2009) general biomass resource assessment, a scoping study carried out by Schaffer & Associates International in 2008 (Aah-Kee, 2009) found that there is concrete potential to develop over 80 MW of power from rubber trees on five sites in Liberia. The proposed sites include Kakata, Guthrie Plantation, Saint Paul River, the Fendell Campus of the University of Liberia, and the Firestone Plantation. At the Guthrie Plantation site, there are sufficient confirmed supplies of water and rubber trees for a 20MW wood-fired power plant. With regard to the fuel wood and charcoal consumption, the latest data from the National Charcoal Union of Liberia (NACUL) shows that charcoal production in Liberia in 2005 stood at 36,500 tonnes per year. There are no firm data on firewood consumption in Liberia, but findings from a survey conducted by the Center for Sustainable Energy Technologies (CSET) in 2004 indicated that scarcity of firewood is becoming a serious problem in most parts of Liberia. Nationally, Liberia is harvesting above the level that can be sustained annually without depleting the current stock and degrading the environment. It is estimated that about 960,000 trees are cut down annually for charcoal to serve the Monrovia area alone. Forecasts for the country estimate an annual increase in demand of about 0.6 m3 per household. Therefore, as Liberias dependence on its biomass resources continue to evolve, it is critical that measures are put in place for sustainable harvesting and replanting practices, as well as measures to reduce consumption. In addition, the impacts of firewood shortages need to be researched to formulate policy that will protect the resource. Without such a policy, demand for charcoal and firewood will continue to grow in the absence of electricity and energy efficiency measures. The use of woody biomass as a source of energy will continue to increase in relation to rural population growth and poverty. If this demand is not met in a sustainable manner, it will eventually lead to deforestation, environmental degradation, and desertification in Liberia.

8.1.2. Hydro Liberia has six major rivers, which drain 66 percent of the countrys water. These include the rivers Mano, Saint Paul, Lofa, Saint John, Cestos, and Cavalla. Short coastal waterways drain about 3 percent of the countrys water. This intensive drainage pattern indicates considerable potential for hydroelectric power in Liberia. A number of feasibility studies were carried out over the period 19761983. At least 14 large-scale schemes were identified in the 6 main rivers. About 24 sites have been identified for small hydroelectric schemes. In 1988 the LEC sought investment capital to develop six mini-hydropower schemes with total installed capacity of about 20 MW, which was intended to supply 3 rural grids serving 14 major population centers in the northern half of Liberia. This proposal was disrupted by the civil conflict. The 24 potential sites identified are shown in Table XX, and span most of the country.

Table XX Potential sites for small hydroelectric development, reported March 1988 Design flow River basin Region Head (meters) 3 Site (m /sec) MR1 Grand Cape Mano Mount, Gbarpolu and Lofa MR2 MR3 MR4 MR5 LR1 LR2 Lofa, Gbarpolu and Grand Cape Mount LR3 LR4 LR5 LR6 Farmington Margibi FR1 SJR1 Bassa, Bong, and Nimba SJR2 SJR3 SJR4 Timbo Rivercess TR1 CR1 Cestos Grand Gedeh and Nimba CR2 CR3 SR1 Sehnkweh Grand Kru SR2 Buto Grand Kru BR1 3.47 0.26 12.0 20.0 10.40 9.47 8.09 3.61 2.43 55.70 37.10 3.48 3.42 3.35 3.25 16.90 60.40 57.50 37.70 2.32 6.51 8.30 7.35 6.51 5.78 30.0 30.1 25.0 20.0 12.0 17.0 20.0 55.0 10.0 7.0 6.0 15.0 33.0 28.0 28.0 25.0 12.0 12.0 10.0 15.0 12.0

Installed kW potential 2,474 2,252 1,603 572 231 7,508 5,884 1,517 271 186 153 2,010 15,806 12,767 8,370 460 619 789 582 774 550 330 44

Lofa

Saint John

Cavalla

River Gee

GR1

0.66

25.0

130

Source: LEC

8.1.3. Solar Although Liberia has high rainfall, annual solar insulation shows good prospects for the application of solar technologies such as PV and solar thermal systems for health care, education, agriculture, community livelihood, and microenterprises. Despite the lack of national data on solar resources in Liberia, global weather data obtained from RET Screen International of Canada and NREL show that the monthly average daily solar radiation on horizontal surfaces in Liberia is between 4.0 and 6.0 kWh/m2/day. During the summer months of the rainy season, insolation averages between 4.0 and 5.0 kWh/m2/day; during the winter months of the dry season it is higher5.0 to 6.0 kWh/m2/day. Inland areas of Liberia receive slightly greater insolation than coastal areas.

8.1.4. Other sources Finally, there are few data available on wind speeds in Liberia since no assessment has been performed. However, global and regional wind maps show a poor resource for West Africa. Mechanical turbines for water pumping could nevertheless be well suited for Liberia. There does not appear to be a geothermal resource in Liberia. Though higher heat flow values are found offshore to the south and west in the Guinea and Sierra Leone Basins, and are attributed to possible tectonic activity, the thermal effects of the activity are not thought to extend inland to the Liberian Shield.

The map in Figure XX shows the hydropower resources identified in Liberia prewar, as well as the rubber and oil palm resources currently available under concessions.

Source: World Bank Unit, 2011

8.2. Strategy for Rural Electrification: Framework.

Policy objectives, and Implementing

The NEP, adopted in 2009 as the policy framework for the electricity sector provided a broad context for sector reform, and sets the framework in particular for expanding electricity services to rural areas outside of Monrovia. It calls notably for the creation of the Rural and Renewable Energy Agency (RREA). Following up on this, President Ellen Johnson Sirleaf by Executive Order established in January 2010 Liberias Rural and Renewable Energy Agency (RREA) and a Rural Energy Fund (REFUND) to bring modern energy services to Liberias rural areas. The

establishment, capacity building and funding of the RREA is being supported from USAID, the World Bank and recently the European Commission. The next critical step is that the RREA should be fully endorsed by the legislature with relevant statutes, which include GOL budgetary support and creation of the REFund, the proposed rural electrification fund. While the Government of Liberia develops its rules and procedures for access expansion program and rural electrification program, it is crucial to have a clear policy objectives and implementation framework. This implementing framework covers rules and procedures regarding among others: assessment of potential productive uses; criteria for prioritization of sites, and the criteria for choosing grid extension vs. off grid option. Appropriate approaches for institutional, technical, and economic design and implementation are crucial to carry out access expansion programs. Based on lessons learned by other countries over the past 40 years by developing institutional and planning strategies for rural electrification, it is recommended to incorporate following aspects:

identification of the areas/population to be reached; definition of the components of the investment program (comprising technological options to be applied); methods for economic and financial evaluation (including criteria for assigning priorities), procedures for effective implementation and monitoring, and identification of sources of revenues needed to carry out investments and ensure service sustainability.

For each task, it is necessary to set with clarity and apply with transparency the methods and procedures to be followed, including a precise definition of roles and responsibilities of stakeholders involved (government agencies, beneficiaries, incumbent service providers, contractors, non-governmental organizations, and so on). Public disclosure of all the phases in each specific program, from early design to effective execution, and active dissemination of this information can help ensure economic and financial viability of electrification efforts and to protect them against the risk of undue political pressures and discretionary decision-making. Because the cost of providing electricity to rural households is usually high, optimized design, including detailed planning, becomes all the more important. Failure to carry out any one of the above tasks may render a program unsustainable or leave it in the identification phase, as shown by several examples worldwide.

8.3. Planning Access Program.

The Government of Liberia, in particular the MLME is well suited to carry out the planning of electricity access programs at central level that incorporates the activities for on-grid and off-grid expansion, supported by the LEC and RREA. In this regards, the three institutions require technical support and assistance and donors are usually able to provide. It is recommended that in the planning access exercises for rural access, the RREA in conjunction with the MLME consider the common features of successful rural electrification planning:
a clearly established system to prioritize the areas to electrify and the projects to be selected; a long-term multiyear vision aimed at coordinating grid extension and off-grid efforts that should be supported by studies on the optimization of technology options and a grid/off-grid comparative economic analysis, and publicly disclosed market studies; a broad regional development approach that takes into account other conditions for rural development (access to education and health services, an adequate transport system, agricultural potential, access to markets, and the capacity of the local manufacturing industry); and the design and effective implementation of an institutional framework clearly establishing the roles and responsibilities of the public and private agents involved.

It is recommend that independently of the approach adopted by the government, the planning of rural electrification program and criteria for project selection in each program should be established upfront through clear, transparent, and publicly disclosed rules.

8.4. Institutional Options In addressing the populations demand for modern energy services, Liberia can benefit from the experiences encountered in other countries over the past 40 years by developing institutional and planning strategies for rural electrification. Broadly, there are four main distinct approaches: Electrification through public companies. While in the 1990s there was a strong move to privatize public power companies because they were considered inefficient and driven by political agendas, in many countries the state-owned utilities have taken the lead in addressing rural electrification programs. Examples include Lao PDR, Mexico, Thailand, and Tunisia. Private and decentralized electrification companies. Countries with private distribution companies have been able to address their rural electrification needs through these companies, in spite of the commonly held notion that their business interests are not compatible with extending the service to markets that are perceived unprofitable. This has required creative subsidy programs, Chile being one example, to encourage private companies to serve rural areas.

Rural electrification agencies (REAs). In response to the lack of interest of distribution utilities in engaging in rural electrification, and in the hope of minimizing political interference, many countries have opted to establish a specially designated institution to manage multi-year earmarked resources to support rural electrification projects. This approach is often accompanied by a rural electrification fund (REF) that is managed jointly or by a separate entity. Rural electrification cooperatives. Several countries have adopted the cooperative approach derived from the U.S. experience. Examples of developing countries include Bangladesh, Costa Rica, and the Philippines. In this model, the people being served by the cooperative are the owners of the distribution company, which is supervised, and often supported, by a centralized agency.

Based on the international experience, some countries have used a mix of these approaches, demonstrating that they are not mutually exclusive. Additionally, there appears to be no evidence that countries with successful electrification programs follow one specific institutional model. This indicates that the institutional form is not as important as the adherence to strict business principles in operating distribution companies in rural and urban areas and strong and sustained backing from the respective governments.

8.5. Pricing and Subsidy Policy An important condition for the sustainable development of the power sector is the presence of a tariff system that guarantees overall revenue that covers the costs of efficient operation and provides the right price signals for an efficient allocation of resources and rational consumption. This condition can be met through an appropriate tariff structure and level that reflects the costs of supplying electricity that differ on account of location, type of consumer, and time of day. Under these circumstances, a suitable system of subsidies is needed to ensure that service in rural areas and low-income urban neighborhoods is not neglected and remains an important focus of the distribution company or the model adopted. Most rural electrification programs in the world include some sort of subsidy that is justified on equity grounds. Common subsidies include capital subsidies, connection subsidies, and cross-subsidies:
Subsidies for capital costs of rural electrification projects are usually covered through special purpose funds (e.g., REF) and frequently supported by donors. Often substantial, this subsidy covers the full investment cost in some cases. Many countries apply a project selection process that aims at minimizing this subsidy, thereby reducing the subsidy per connection and enabling a

larger number of households to be connected. Typically, the contributions of local governments and/or private providers reduce the size of the capital cost subsidy by 20 to 30 percent. Subsidies for connection costs address what is often the last main obstacle to electrification, as many poor households cannot afford the cost of connection and house-wiring, which often amounts to a considerable sum. Common practices range from a delayed monthly payment of the connection fee over a relatively long period to a complete subsidy (regarding connection costs as capital costs and subsidizing connection through the capital subsidy). Recent output-based aid approaches combine schemes that provide a performance-based subsidy to cover connection costs linked to the delivery of pre-agreed outputs, including the provision of services on a sustainable basis and an energy efficiency component (Maurer and Nonay 2009). Cross-subsidies within the tariff system include those within a consumer category, such as lifeline tariffs which aim at favoring low-consumption households; between consumer categories, e.g., from commercial and/or industrial to residential; or through uniform tariff policies, e.g., from urban to rural consumers. While cross-subsidies are common and have proven to be quite effective in financing rural electrification in middle-income countriesa good example is Thailand, where a very successful rural electrification program was financed mostly through an urban to rural cross-subsidythey may not be as effective in low-income countries with lower levels of electrification rates. For example, in Sub-Saharan Africa where only 29 percent of the population has access to electricity and where the average residential tariff at $0.13/kWh is already relatively high (Eberhard et al. 2008), there are not enough existing consumers to provide the financing required to bridge the electricity access gap through cross-subsidies at costs that most consumers would consider reasonable.

8.6. Technical Options for Off-Grid Extension The electricity needs of Liberias population are relatively low, especially in rural areas. They mainly include home and community lighting, improved healthcare and educational facilities, and communication tools for access to information through radio, telephone (cellphone charging), and television. Electricity provides only some of the energy needs. For thermal applications such as cooking, needs are most often met using firewood or charcoal. For Liberia, given the limited range of the current grid and the relatively low load requirements of the current rural population, decentralized off-grid solutions including minigrids and stand-

alone systems designed for small loads and single applications, appear the best strategy. Serving the areas not accessible to the Monrovia grid or regional interconnection with an integrated electric power network will be a long-term process, and this is impractical for the more remote areas of Liberia. Running power lines over long distances and between isolated households is costly and it is unlikely that associated costs be borne by the rural population past the donor support period. Renewable energy technologies are particularly well suited to an off-grid, distributed generation scenario, and Liberia is endowed with significant renewable energy resources, including solar, biomass, and hydropower resources. Table XX below provides an overview of the renewable energy applications that are available as an alternative to the conventional fossil-fueled or grid based approach, and the needs they meet. There is no single technology that is most suitable for providing rural energy services in Liberia. Determining the appropriate technology, supply, and delivery options will require economic, financial, technical and considerations.

Table XX Renewable energy services for off-grid applications

Energy services Renewable energy applications Hydropower (pico-scale, microscale, small-scale) Lighting and other small electric needs (homes, schools, street lighting, telecommunications, hand tools, vaccine storage) Biogas from household-scale digester Small-scale biomass gasifier with gas engine Village-scale minigrids and solar/wind hybrid systems Solar home systems (SHSs) Small hydro motor Small industry with electric Candles, kerosene, batteries, central battery recharging, diesel generators Conventional alternatives

Biomass power generation Diesel generators and electric motor Biomass gasification with gas engine

Water pumping (agriculture and drinking)

Mechanical wind pumps Diesel pumps Solar photovoltaic (PV) pumps Biomass direct combustion Biogas from smallmedium-scale digesters Solar crop dryers Solar water heaters Ice making preparation for food and Liquefied petroleum gas (LPG), kerosene, diesel generators

Heating and cooling (crop drying and other agricultural processing, hot water)

The rural energy master plan to be developed by the RREA is expected to use geographic information system (GIS) mapping, socioeconomic surveys, and resource assessments to determine which technology, delivery, and supply options are most appropriate for Liberias diverse geographic areas. General technology delivery options include: Minigrids Stand-alone systems Distributed appliances

9. Investment Planning and Financing

The table below summarizes the investment requirement for transmission, distribution and management of the electricity sector in Liberia. Investment requirements in additional generation to bridge the supply gap that would emerge during the period 2013-2018 will depend on the decisions that the GoL makes on what supply option to pursue, and therefore, these requirements have not yet been integrated in this first version of the document.
Investment Requirements for Transmisssion, Distribution and Power Sector Management Transmission Investment Requirement
Phase Description Phase 1 Monrovia (2013-2015) Lines and Substations Phase 1 Monrovia (2013- 2016) As Per LEC Master Plan Phase 2 All Liberia (2016-2020) Lines and Substations Phase 3 All Liberia (2021-2025) Lines and Substations Phase 4 All Liberia (2026-2030) Lines and Substations Pahse 2-4 Provision for Skywire Supply ($ 15,000 each for 50 Towns) Phase 1-4 SCADA Sub-total Physical and price contingencies (10%) Total For Transmission Grid Investment Cost (US $) 19,543,045 81,583,604 20,335,612 22,991,799 34,194,246 750,000 4,000,000 183,398,306 18,339,831 201,738,137 Cost (US $) 82,400,000 130,200,000 78,500,000 78,500,000 78,500,000 448,100,000 44,810,000 492,910,000

Distribution Investment Requirement

Phase Description Phase 1 Distribution Works Monrovia (2013 2015) Phases 2-4 Distribution works Monrovia (2016 2023) Phase 2 Distribution Works All Liberia (2016 2020) Phase 3 Distribution Works All Liberia (2021 2025) Phase 4 Distribution Works All Liberia (2026 2030) Sub-total Physical and price contingencies (10%) Total for Distribution Investment requirements

Power sector management

Phase 1-4 Phase 1-4 Utility commercial services - Incident Resolution and Management System (IRMS) Institutional Capacity Development* 3,000,000 56,012,500 59,012,500 753,660,637

Total for Power Sector Management

Total Investment

10. Institutional Development and Capacity Development Strategy 10.1. Clarification of roles and responsibilities

The Energy Access Action Plan cannot be complete without a comprehensive review of its institutional structure, and a clear demarcation of role and responsibilities of key institutions in Liberia. In this regard, the roles pertaining to: (a) policy formulation and implementation; (b) ownership; (c) regulation; and (d) day-to-day operations have to be fully recognized and assigned to existing (and/or new) institutions. Following is envisaged to be the structure for the energy sector in Liberia:

a) Ministry of Land, Mines and Energy (MLME): MLME is envisaged to be the apex energy institution in Liberia, responsible for the following functions: (1) Policy formulation and implementation i.e. to develop policies in accordance with Government guidelines on all facets of energy sector (e.g. fuel supplies and infrastructure; generation; transmission, distribution, sales; pricing; investments; private sector participation; etc). (2) Ownership function i.e. nomination of Directors on the Board of public utilities and institutions to represent the interest of Government of Liberia (e.g. to participate in Board meeting, and oversee the implementation of GoL policy guidelines without going into the day-to-day operation of the utilities or institutions). (3) International contracts i.e. signing such contracts where GoL is liable in any way. (4) Other functions i.e. inter-ministerial relationships; doner relationships; high-level contacts with stakeholders (general public, CSO, etc); and related activities. b) Ministry of Finance: MoF would have the important role of providing the necessary resources from GoL budget for the development and operation of the energy sector entities; facilitation of donor funds; and provision of Guarantees, wherever needed. c) Regulator: While a full-fledged independent regulator for Liberias energy sector may not be called for in the short-run, it is proposed that a small group of professionals (2-3 persons) may be assigned the responsibility of regulating the pricing (tariffs) and nonpricing (safety; specifications; customer services; etc). This group may be placed under an appropriate Ministry (MoF or MLME) to assure the independence of its decisions/actions. d) Liberia Electricity Corporation (LEC): LEC has the mandate to own (on behalf of GoL) the generation, transmission and distribution assets, and maintain and operate these in a safe and cost-effective manner to provide reliable electricity supplies to its customers. Its jurisdiction extends all over Liberia unless any specific area or specific customer(s) is carved out and handed over to another entity. MLME may choose ta appoint the Managing Director/Chief Executive and the Board, or may decide to hand over the dayto-day operations to a Management Contractor (as is presently the case). e) Rural and Renewable Energy Agency (RREA): RREA has the mandate to facilitate and accelerate the rural electrification program, and promote the use of renewable energy technologies all over Liberia. f) Liberia Petroleum Corporation (LPC): LPC has the role and responsibility to facilitate import of petroleum products, maintain the necessary infrastructure, carry necessary stocks and undertake and oversee the distribution and supply of petroleum products throughout Liberia.

10.2.

Skills needed for the energy sector

Based on the institutional roles and responsibilities, it is important that a cadre of trained professionals is created to perform the duties in an effective manner. The skills needed would inter alia be in the following illustrative areas: g) h) i) j) k) l) m) n) o) p) Policy analysis and formulation. Public sector management and oversight. Long-term planning, investments and solicitation of private finances. Capital budgeting and financial management. Regulatory mechanisms and controls. Technical management and operation of utility systems (electricity/petroleum). Commercial and business operations in electricity and petroleum sectors. Health, Safety and Environment (HSE) in energy systems. Personnel management and human resource development. Communication, information dissemination and public relations.

10.3.

Gaps and capacity-building strategies

As a matter of priority, a study needs to be undertaken to identify the skill sets required for undertaking key responsibilities in the energy sector, and an inventory should be taken of available persons with the required capacities. Based on this work, specific capacity gaps should be identified for each professional category, and strategies may be developed for capacitybuilding in the short- and medium-term. Typical strategies may include: (a) in-country training and development; (b) secondment of selected staff with utilities in the region; (c) twinning arrangement with utilities in the region and elsewhere; (d) overseas training; (e) management contract; and (f) procurement of skills through expatriate staff. The choice of capacity-building strategy would be dependent on a number of objective criteria to be developed through the Skill Gaps Study.

10.4.

Identification of potential sources of financing for institutional development

and capacity building Investment in institutional development and human capacity-building is imperative for sustainable development of energy sector in Liberia. In this regard, GoL would do well to either allocate sufficient financial resources from the budget, or earmark part of the LEC revenues for capacity-building activities. MLME may also explore the possibilities of securing training funds from a number of multilateral (WB, UNDP, UNIDO, AfDB, EU, etc) and bilateral institutions

(USAID, CIDA, DfID, GIZ, NORAD, etc) to embark upon a short-term and medium-term program at an early date.

11. Conclusions and Recommendations

[To be completed upon discussion of first draft with the Ministry of Mines, Lands and Energy]

Annex I Subtransmission Investment Requirements for Monrovia 2013 2015

Unconstraint funding scenario for years 3-5 during the Management Contract as per LEC Master Plan

Map Item # 1 2 3 4 5 6 7 -

Description Saye Town 22kV Feeder Extension 12th Street 22kV Feeder Extension Soniewein 22kV Feeder Extension Doe Community 22kV Feeder Extension Logan Town 22kV Feeder Extension Bushrod Island 66/22kV 24/32/40MVA Transformer Addition Bushrod Island Fan Upgrade 13.3MVA Krutown Fan Upgrade 13.3MVA Year 3 Customer Connections $ $ $ $ $ $ $ $ $ Scenario A3 - Year 3 Total $

Cost 11,200.00 42,000.00 16,800.00 8,400.00 5,600.00 2,100,000.00 10,000.00 10,000.00 9,762,698.00 11,966,698.00

Map Item # 1 2 3 4 5 6 7 8 9 10 11

Description Express 22kV Feeder to Virginia Express 22kV Feeder to Island Clinic Sayon Town 22kV Feeder Extension Jamaica Road 22kV Feeder Extension Express Feeder to Somalia Drive Bushrod Island 66/22kV 24/32/40MVA Transformaer Addition Bushrod Island Sub-Station 22kV Feeder Upgrades New 66/22kV Substation at Congo Town 66kV Line Extension from Paynesvaille Fish Market 22kV Feeder Extension Express 22 kV feeder to Smythe Community Express 22kV Feeder to Matadi Estates Relocate 10/13.3MVA Transformer from Bushrod Island to paynesville Year four Customer Connections $ $ $ $ $ $ $ $ $ $ $ $ $ $ Scenario A3 - Year 4 Total $

Cost 112,000.00 56,000.00 14,000.00 14,000.00 84,000.00 2,100,000.00 120,000.00 4,000,000.00 675,000.00 22,400.00 16,800.00 98,000.00 447,000.00 15,181,846.00 22,941,046.00

Map Item # 1 2 3 4 5 6 7 8 9 12 13 14 15 16 17 18

Description New 66/22kVSubstation at Gardnersville 66kV Line extension Express 22kV Feeder to Pipeline Community Express 22kV Feeder to Jackob Town Community Express 22kV Feeder to Red Light Community Express 22kV Feeder to Stephen Tolbot Express 22kV Feeder to MTA Community Express 22kV Feeder to Barnerville Community Express 22kV Feeder to Chocolate City Express 22kV feeder to Congo Town North Paynesville Fan Upgrade 13.3MVA Kru Town Substation Upgrades includes 2x66/22kV 15/20MVA Transformer Additions Relocate 10/13.3MVA Transformer from Kru Town to Capital Express 22kV Feeders to Down Town Monrovia 12th Street 22kV Feeder extension Express 22kV Feeder to Sinkor Johnson Bridge 22kV Feeder Extension Year 5 Customer Connections $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Scenario A3 - Year 5 Total $

Cost 4,200,000.00 420,000.00 126,000.00 126,000.00 168,000.00 14,000.00 5,600.00 28,000.00 53,200.00 30,800.00 10,000.00 3,500,000.00 447,000.00 8,400.00 39,200.00 39,200.00 8,400.00 37,452,060.00 46,675,860.00

Accumulative total investment requirements for three consecutive years of the Management Contract that is presented above.

Year Year 3 Year 4 Year 5 Total

Investment requimenet (US $) 12.0 22.9 46.7 81.6

Annex II - Transmission Investment Requirments

Item

Description

Specification A Phase 1

Unit

Qty

Route (km)

Unit Cost (US$)

Total Cost (US$)

A1 A2 A3 A4 A5

Mt. Coffee - Monrovia (Paynesville) Bushrod - Bomi Hills Paynesville - Airport (Harbel) Harbel - Kakata Mt. Coffee Kakata Substations at Bomi Hills, Kakata and Harbel Sub-total Phase 1

66kV, 265AAC 66kV, 265AAC 66kV, 265AAC 66kV, 265AAC 66kV, 265AAC

km km km km km

0.03

38 64 45 58

47,875 47,875 47,875 47,875 47,875

1,799,144 3,063,968 2,154,353 2,776,721 2,398,859

0.04

50

A6

66/22kV, 20MVA

no

N/A

2,450,000

7,350,000 19,543,045

B Phase 2 B1 B2 B3 B4 B5 B7 B8 Yekepa Saniquelli Bolata Gbarnga Mano Tubmanburg Mano Robertsport Buchanan Harbel Buchanan - Cesstos City Substation at Harbel Sub-total Phase 2 C Phase 3 C1 C2 C3 C4 Saniquelli Karnplay Karnplay Ganta Gbarnga Zorzor Zorzor Voinjama 33kV, 150AAC 33kV, 265AAC 33kV, 265AAC 33kV, 150AAC km km km km 0.025 0.046 0.082 0.072 31 58 103 90 38,386 43,087 43,087 38,386 1,202,122 2,482,819 4,425,895 3,462,111 33kV, 265AAC 33kV, 265AAC 33kV, 265AAC 33kV, 150AAC 33kV, 265AAC 33kV, 265AAC 33/66kV, 20MVA km km km km km km No 0.062 1 0.028 0.035 0.06 0.081 35 44 75 101 86 78 N/A 43,087 43,087 43,087 38,386 43,087 43,087 2,750,000.00 1,511,281 1,889,102 3,238,460 3,894,874 3,705,486 3,346,409 2,750,000 20,335,612

C5 C6 C7

Tubmanberg - Bopoli Cesstoss City - Greenville Mano - Foya Sub-total Phase 3

33kV, 150AAC 33kV, 150AAC 33kV, 265AAC

km km km

0.04 0.074 0.11

50 93 138

38,386 38,386 43,087

1,923,395 3,558,280 5,937,177 22,991,799

D Phase 4 D1 D2 D3 D4 D5 D6 D7 D8 D9 Bolata - Ganta Bolata - Zwedru Zwedru - Fish Town Zwedru - Greenville Fish Town - Barclayville Fish Town - River Gbeh Fish Town - Pleebo Pleebo - Harper Foya - Voinjama 33kV Switching Station at Fish Town Sub-total Phase 4 Total Transmission Investment Requirments 33kV, 265AAC 33kV, 265AAC 33kV, 265AAC 33kV, 150AAC 33kV, 150AAC 33kV, 150AAC 33kV, 150AAC 33kV, 150AAC 33kV, 150AAC km km km km km km km km km 0.06 0.14 0.092 0.137 0.065 0.024 0.06 0.028 0.06 75 175 115 172 81 30 75 35 75 43,087 43,087 43,087 38,386 38,386 38,386 38,386 38,386 38,386 3,238,460 7,556,407 4,965,639 6,587,627 3,125,516 1,154,037 2,885,092 1,346,376 2,885,092

D10

4 Bays and Busbar

No

N/A

450,000

450,000 34,194,246 97,064,702