Sierra Leone poised to transform renewable energy sector with strengthened public and private sector participation
Sierra Leone has received a $300,000 grant from the Climate Investment Funds (CIF) to prepare a far-reaching national Investment Plan (IP) to transform its renewable energy sector. The IP will be developed under the CIF’s Program for Scaling Up Renewable Energy in Low Income Countries (SREP) in a collaborative approach that includes multiple ministries and stakeholders throughout the country, including private sector, commercial and development banks, and non-governmental organizations (NGOs). The grant to prepare the IP builds on the 2014 decision by SREP to select Sierra Leone to run a US $40-million SREP nationally based pilot program which is policy-oriented and fully aligned with the country’s green development goals. The program will be supported by the African Development Bank (AfDB) as lead implementing agency and by the World Bank Group.
Through the IP, the country will create a series of projects to help reduce barriers for renewable energy development and market transformation. Potential areas of SREP intervention are renewable energy technologies in on-grid and off-grid areas such as solar photovoltaic, hybrid generation systems, mini-hydro, and wind resource mappings, and dissemination of sustainable energy systems with a strong focus on increasing access to energy with private and public sector participation.
As an innovative approach, the IP is likely to support local investment in renewable energy technologies by engaging local commercial banks to facilitate financing for renewables at more competitive terms for local small and medium enterprises and individual households.
“Sierra Leone has great renewable energy potential, including solar, wind, hydroelectricity, and biomass from forests and crops such as rice, straw and sugar cane,” said Joao Duarte Cunha, AfDB’s Coordinator for SREP “However, the country has harnessed very little of this potential so far. The SREP program provides a critical opportunity for the country to tap into those resources and transform its energy profile, raising the level of its citizens’ access to power in a sustainable and climate-friendly way.”
Specifically, the SREP financing is intended to:
- Address the additional costs and risks associated with renewable energy technologies, which adversely affect the viability of investments in the renewable energy space;
- Meet the specific requirements of removing financial and institutional barriers and to leverage additional public and private financing;
- “Crowd-in” the private sector;
- Finance investments and capacity building for both public and private sector entities;
- Increase the installed renewable energy capacity in a country’s energy supply in line with relevant national strategies and policies plans; and
- Support proven renewable technologies.
With the grant in place for the IP’s preparation, work will quickly begin to develop the plan, the government has notified the SREP governing body that it intends to submit the final IP for its endorsement by November 2016.
About the Climate Investment Funds (CIF)
Established in 2008, as one of the largest fast-tracked climate financing instruments in the world, the $8.3 billion CIF provides developing countries with grants, concessional loans, risk mitigation instruments, and equity that leverage significant financing from the private sector, MDBs and other sources. Five MDBs – the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), and World Bank Group (WBG) – implement CIF-funded projects and programs.