Dominovas Energy Corp. (fka DNRG)

[Alinea818]

]LOW COST ELECTRICITY, HIGH EXPECTATIONS - CLSG CHIEF SPEAKS

http://frontpageafricaonline.com/index.php/interview/6356-low-cost-electricity-high-expectations-clsg-chief-speaks

Published: 28 September 2015

“When you look at the social aspect of things, it reduces cost of production and cost of operation. It will also create incentives and opportunities to build more schools, create jobs in which government will be able to employ more health workers. The cost of running a hospital will be extremely low; the same with businesses, which could see their cost of production dropped and profit margin increased. That will definitely lead to more employment opportunities.
Abidjan - Cote ‘d’Ivoire, Liberia, Sierra Leone and Guinea are part of what many consider a flagship electricity gamble that could pay off handsomely for Sub-Saharan Africa – and spark an economic transformation for countries struggling to stay afloat. Andrew M Herscowitz, the Coordinator for US President Barack Obama’s Power Africa and Trade Africa initiatives has said that investment in energy infrastructure in Africa will help unlock potential in what is already the world’s fastest-growing continent, with positive results for global growth, Now a G-20 initiative funded by the World Bank, African Development Bank, European Investment Bank and the KFW is accelerating several regional interconnection line projects including a transmission line to interconnect the States of Côte d’Ivoire, Liberia, Sierra Leone and Guinée (CLSG).

The CSLG’s line is a 1,300 kilometer stretch, coming from Man to Danane; from Danane to Yekepa; from Yekepa to Buchanan; from Buchanan to Mount Coffee; from Mount Coffee to Bo Waterside, which provides huge opportunities for Liberia. The Economic Community of West African States (ECOWAS), through its West Africa Power Pool (WAPP) has made regional power grid access a priority for the next decade. Thus, the establishment of TRANSCO CLSG has created burgeoning opportunities across the region.

The WAPP intends to integrate the various national power systems into a unified regional electricity market – with the expectation that such mechanism would, over the medium to long-term, assure the citizens of ECOWAS member states a stable and reliable electricity supply at affordable costs, facilitating the balanced development of diverse energy resources for their collective economic benefit, through long-term energy sector cooperation, unimpeded energy transit and increasing cross-border electricity trade.

Mr. Mohammed Sherif, the General Manager for the CSLG project sat down with FrontPageAfrica for an exclusive interview at his office in Abidjan recently where he outline the fine points of the ambitious project and addresses the challenges, expectations and potential impact the CSLG countries and sub-saharan Africa as a whole.
FRONTPAGEAFRICA: This project was initiated as far back as in 1982. Why do you think it took so long for it to get off the ground?

MR. MOHAMMED SHERIF: In 1982, it was a concept envisioned by our West African leaders. However, the idea materialized in 2012 when the Summit of ECOWAS Heads of States and Government approved the revised ECOWAS Master Plan for the Generation and Transmission of Electric Power which identifies the Côte d'Ivoire, Liberia, Sierra Leone, and Guinea (CLSG) Interconnection Project as one of the five (5) priority projects of the West African Power Pool (WAPP) for the West African Sub-Region. In West Africa we have fifteen countries and integrating the energy market would provide the opportunities to those countries that are in high demand for energy; to those that have enough to share the excess product and provide opportunity for the people to have access to affordable electricity.

The CLSG project was developed with four heads of states signing an International Treaty. The Treaty was ratified by their respective parliaments, thus giving it an international commitment. Consistent with the Treaty, a supranational company called TRANSCOO CLSG was established to manage the CSLG project. Once TRANSCO CLSG was established, there was an International Project Agreement signed by the four ministers of energy of the CLSG countries. Shareholders’ Agreement, Articles of Association, and Business Plan were prepared. Shareholders of the company include the utility companies in the four CLSG countries: the Liberia Electricity Corporation in Liberia, Côte d’Ivoire Energies in Cote d’Ivoire, ‘Electricité de Guinée’ in Guinea and the Electricity Distribution and Supply Authority in Sierra Leone.

As the General Manager of TRANSCO CLSG, I was competitively recruited and appointed by the Board of Directors of the company on September 5, 2014. My first responsibility was to fully establish the company and to bring the rest of the team on board. So I came to complete the recruitment process already initiated by WAPP to make sure to recruit the best. To this stage, we have a highly professional, skilled and diversified team - from Guinea, Cote d’Ivoire, Benin, Burkina Faso, Sierra Leone and The Gambia.

On Project Financing:

MR. SHERIF: There are four donors that are financing the project. I am pleased to note that the project is fully financed by the World Bank, African Development Bank (AfDB), European Investment Bank (EIB), and KFW – a German Bank. The World Bank is providing about US$176 million (of which US$32m is for WAPP integration project), the African Development Bank, US$133 million, the European Investment Bank, US$105 million and the KFW, US$41 million. The World Bank is financing the line in Liberia and the functioning of TRANSCO CLSG and WAPP integration project. The AfDB is financing the rural electrification component (to be managed by utilities in the four countries) and functioning of TRANSCO CLSG as well. The total financing is about US$476 million.

FRONTPAGEAFRICA: For the layman who does not understand what this project is all about. How would these impact citizens in the CLSG countries – Cote d ‘Ivoire, Liberia, Sierra Leone, and Guinea?

MR. SHERIF: The project will definitely impact our lives in the CLSG countries in many ways. It will seek to enhance basic social services which include education, health, water and sanitation, security and so forth, because they are key services. Currently, the cost of electricity is very high in the three countries - Liberia, Sierra Leone and Guinea given that the main source of power is through diesel fuel. Instead of spending large sum of money on buying fuel to run generators, the money spent could be diverted for other infrastructures including building new roads. For instance in Liberia, people are paying 57cents per kilowatt hour. With the CLSG electricity, this will be reduced by more than 50 percent to 15 or 20 cents. When you look at the social aspect of things, it reduces cost of production and cost of operation. It will also create incentives and opportunities to build more schools, create jobs in which government will be able to employ more health workers. The cost of running a hospital will be extremely low; the same with businesses, which could see their cost of production dropped and profit margin increased. That will definitely lead to more employment opportunities.

FRONTPAGEAFRICA: This is a very ambitious project. For countries that are going to benefit from this project, are you experiencing any challenges? And what are you doing to ensure that everyone, every country is on the same page?

MR. SHERIF: This is indeed a challenge, but like I said earlier I have the task of ensuring that the project is effective. We worked with individual CLSG countries to meet our effectiveness conditions. These effectiveness conditions include but not limited to payment of their counterpart contributions particularly to compensate people affected by the project, interest accrued during construction, and developing various institutional documents. The challenge was to get these countries pay their contributions as well as get the institutional documents signed and ratified by their respective parliaments.

FRONTPAGEAFRICA: But besides the contributions, there are some potential stumbling block. In Liberia for example, it’s being rumored that there are efforts underway to construct a different line which could overstep what the CLSG project is intended for. How are you dealing with this potential stumbling block?

MR. SHERIF: First of all, that report is new to us at TRANSCO CLSG. We are receiving maximum cooperation and support from the Government of Liberia, particularly the sector ministries and agencies. But whatever efforts the government wants to undertake we believe should complement our effort at TRANSCO CLSG. The Liberian government is a signatory to the International Treaty establishing the TRANSCO CLSG. We believe the challenge in Liberia is the non-availability of national transmission and distribution network. As we understood it, the network availability is so low that even if electricity is available on the CLSG line now, Liberia cannot absorb the available capacity.

TRANSCO CLSG line provides huge opportunities for the people of Liberia. We are going to have four sub-stations in Liberia that are fully secured financially, and there is a possibility of securing the fifth sub-station from the same partner, the KFW which is undergoing approval process. The sub-stations will be constructed in Yekepa, Buchanan, Mount Coffee, and Mano. The possibility for the fifth one will be between Yekepa and Buchanan. With these connections, government can build its national transmission and distribution network and top on the opportunity that will exist from the CSG line.

FRONTPAGEAFRICA: What are the specifications of the CLSG line that guarantee its capability to provide electricity to the region and to Liberia?

MR. SHERIF: The CSLG’s line is a 1,303-kilometer stretch, coming from Man to Danane in Cote d’ Ivoire; from Danane to Yekepa; from Yekepa to Zerekore in Guinea; from Yekepa to Buchanan; from Buchanan to Mount Coffee; from Mount Coffee to Mano, from Mano to Yeben in Sierra Leone; from Yeben to Kamakwie in Sierra Leone; from Kamakwie to Linsen in Guinea, which provides huge opportunities for Liberia.

The CLSG line will have a possibility for double circuits but first we would have a single circuit, which is 243 MW. When combined, it would be $US486 megawatts. Mount Coffee alone is just 88 megawatts, when it is optimized. So this is an opportunity for Liberia and the way we’re going to do this, as we build, we are going to energize and by the time we energized, we have the opportunity to tap on to it. And we will have four line segments. It comes from Man (CI) - Yekepa (L) - Nzérékoré (G) --- 202 km; from Yekepa (L) - Sierra Leone/ Liberia border --- 463 km;, from Sierra Leone/ Liberia border - Yiben (SL) --- 419 km, and from Yiben (SL)- Kamakwie (SL) - Linsan (G) --- 220 km. So, before we can even reach to Sierra Leone, Liberia stands a unique chance of tapping into this opportunity to get electricity from the line that will already be available, but if Liberia does not have that backbone of network of national transmission & distribution, Liberia might not enjoy the full potential of the energy being provided by TRANSCO CLSG. Government can complement the CLSG project by developing its national transmission and distribution network by connecting medium and low voltage lines to our CLSG line through available sub-stations in order to supply loads in the various counties.

FRONTPAGEAFRICA: But it seems that they (Liberian Authorities) are moving ahead with this extra line. Is this something you think will be resolved any time soon?

MR. SHERIF: The fact that the Government signed those documents meant that the CLSG project is their project and they will ensure that this project is fully implemented. So I will tend to believe that the government will complement the effort of the CLSG but not to interfere with what is being done to reduce the cost of electricity in West Africa.

FRONTPAGEAFRICA: What level of protection do you hope to put in place to ensure that all the investment in the project is fully protected and there will not be any looting or theft of materials?

MR. SHERIF: I can tell you that we do have mechanisms in place. As a matter of fact, it is important that we maintain the line. Maintenance includes security of the line. For this reason, we are currently doing a study and the first draft has been concluded. Our board has approved the report. The report is recommending that the operations and maintenance be outsourced to a private company that will operate the line, provide maintenance and security. TRANSCO CLSG will develop a succession plan that will replace the contractor after a three-year period.

FRONTPAGEAFRICA: So, if you are living in Sierra Leone, Guinea, Ivory Coast and Liberia, what are the expectations? How soon can the average person in these countries look toward reduced cost of electricity?

MR. SHERIF: I can tell you, the light is coming very soon at the end of the tunnel and by this I mean, we’ve started the second phase of the project implementation. Firstly, the institutional framework has been successfully setup. Secondly, we are currently working on the procurement process. We have agreed with donors on procurement strategy, and we are about to conclude the prequalification process to prequalify contractors. We’ve just concluded the report and at the end of this month, the report will be submitted to donors. In addition, we are preparing the bid documents. By November 2015, we will lunch the various bids and beginning May 2016 after the bids evaluation, we will start awarding contracts and I can tell you, that the physical construction is not too difficult, machinery and things, modern technology is nowadays so fast. It is just the procurement process that takes longer time. Through our leadership we have worked to ensure that we move very, very fast without necessarily compromising controls and due diligence. So I can also say to the people in Liberia, you can expect to see electricity in 2017; as we built, we energize, and we supply.

FRONTPAGEAFRICA: So, what are you looking at in terms of fees? What can the average person look forward to paying after all this is completed? How much decrease in electricity one can expect to pay?

MR. SHERIF: On the issue of the fees, we are discussing the power purchase agreement, between Cote d’Ivoire and the other countries including Liberia. Hopefully, this process is expected to be concluded by November 2015. And I can tell you that the price will be significantly reduced.

FRONTPAGEAFRICA: How optimistic are you about this project because a lot is riding on it? Expectations are high and the G-20 leadership is keen on seeing how this will all play out as a litmus test to see if it can be replicated in other regions of the world? How hopeful are you of all this?

MR. SHERIF: I am very hopeful of this project because I have come with the passion and commitment to serve. What really motivated my passion is basically the need for electricity in the CLSG countries. I have also seen the political will from the CLSG member countries; this is why they made sure that the effectiveness for the project financing was accomplished. I definitely agree with you that this is a project that was ranked 11th by the G-20 in 2011 as a flagship project. Therefore, it should not fail. The idea is, once this is successful, it can be replicated in other regions, say for example, in other parts of Africa, Southern Africa and even Asia and so forth. This is why the donors including the world bank, the African development bank, European Development Bank and the KFW are all sitting with eagle eyes, watching the project. This is why I’m using this medium to encourage all stakeholders, including the various countries, to complement the efforts of TRANSCO CSLG to ensure that this project is fully implemented.

FRONTPAGEAFRICA: Is it possible that countries outside the CLSG could benefit from this electrification project when it is finally completed?

MR. SHERIF: Definitely! The whole idea from the concept of WAPP master plan is to integrate the electricity market in West Africa. We have the ability to tap onto the hub, connected to the OMVG, the link between Guinea, Senegal, Mauritania and The Gambia, supported by the African Development Bank, the Islamic Development Bank, and the European Investment Bank. The CLSG line is going to be connected to the OMVG line and it will have the possibility of connecting to the line in Ghana.

FRONTPAGEAFRICA: So does this mean that Liberia will no longer be relying on the Mount Coffee plant solely to supply electricity?

MR. SHERIF: Exactly. And the thing about the Mount Coffee is that, from study we understand that the peak period is during the raining season. What happens during the dry season when it is less than the full capacity? How do you fill the gap? And also we know that the government is building heavy Fuel Plants to supplement (HFOs) the Mt. Coffee in the dry season, but yet the demand will be higher than the supply as we have companies like Mittal Steel, Western Cluster and other huge companies operating in Liberia that need more electricity.

FRONTPAGEAFRICA: Any final thought you want to share with those who are not aware of the project and its potential for the West African sub region?

MR. SHERIF: What I want to tell the people of the CLSG countries including Cote D’ivoire, Liberia, Sierra Leone and Guinea is that, this is their project and that this project is to make life easier and bring positive impact to their lives. The people of the CLSG countries should not see the CLSG line as a line that is going to be imposed on them. It is rather their line, as the various governments have put money into this, empowered a company to facilitate the bringing of affordable energy, not just electricity but very cheap electricity that they can afford to buy. When they buy this electricity, it will help them in their daily lives. With water and sanitation, health, provision of quality education and of course, availability of factories, companies that will come and do manufacturing as they will be looking at the low cost of production. As production becomes cheaper, they will hire more people, and there will be economic boom. So, we are encouraging them to take this project with their full hands, provide that moral support, political support to the project that is fully funded by international partners. This is the message I want to share.