MCC’s CEO Alice Albright with President Julius Maada Bio
The Millennium Challenge Corporation (MCC) has announced its intention to negotiate a Millennium Challenge Compact with the Government of Sierra Leone.
The proposed $480,669,000 compact aims to address the insufficient availability of affordable and reliable electricity in the country, which is a major constraint to economic growth.
The compact includes three key projects: the Transmission Backbone Project, the Distribution and Access Project, and the Power Sector Reform Project. Sierra Leone’s economy currently suffers from a power sector that cannot meet the existing demand or keep up with future growth. Limited and high-cost supply, poor reliability of transmission and distribution networks, and ineffective sector institutions are hindering the expansion of electricity access to 70% of the population without electricity—the proposed compact aims to address these challenges by investing in foundational infrastructure and institutional capabilities.
The Transmission Backbone Project will focus on increasing the coverage and reliability of the transmission network with modern centralised system operations.
Investments will be made in centralised control, a new transmission corridor, and network upgrades to ensure continuity of service during and after construction. The project also includes the construction of a southern transmission corridor to support grid expansion to southern parts of the country.
The Distribution and Access Project aims to improve the delivery and consumption of electricity in Sierra Leone while reducing barriers to access in selected communities. Upgrades to the distribution network, establishment of new connections, and regularizing of existing connections will lead to reduced outages, improved power quality, increased access to electricity, and reduced technical and commercial losses.
The Power Sector Reform Project seeks to improve the financial sustainability of the electricity sector in Sierra Leone. Support will be provided to key sector institutions to develop the capabilities needed for sector development, including achieving improvements in financial sustainability, cost recovery for supplied electricity, and regulation. The project also aims to spur private sector-financed generation through project preparation support and de-risking mechanisms.
The overall compact’s economic rate of return is estimated at 10.3%, with the potential to benefit 4.6 million Sierra Leoneans, 28% of whom fall below the national poverty line. MCC will continue to refine its assessment of the compact’s impact as new sector data becomes available.
The negotiation of the Millennium Challenge Compact with Sierra Leone represents a significant step towards improving the country’s electricity sector and promoting economic growth and development. The proposed projects aim to address the current challenges in the sector and pave the way for a more reliable and accessible electricity supply for the people of Sierra Leone.
