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The analysis of governance issues in the energy market in Sierra Leone
Context of Energy Policy in Sierra Leone
In December 2004, a study sponsored by ECA CEMMATS Group Ltd., a local consulting firm, involved various stakeholders in the sector to develop an energy policy. CEMMAT energy agenda for Sierra Leone in terms of policy and management is an important set of tools that basically encapsulates a multidisciplinary structure that brings together sectors of the energy community – the Ministry of Energy and Power (MEP), the Ministry of Trade and Industry, the Ministry of Finance, the Ministry of Agriculture and Food Security (MAFS), Presidential Commission on oil, and the Ministry of Mineral Resources (MMR). These ministries of importance to the energy agenda, in their various roles are specified, have dominated the country's development of energy policy. The basic premise This is multidisciplinary structure that is crucial for effective coordination and efficient management of energy resources in the Indian country. However, sounds as if it would be impossible to coordinate with these organizations for many in a country with a story of corruption and mismanagement. But it is not unusual to have various ministries working in coordination to achieve national development goals. In addition, specific tasks and methods of operation that affect the ability of these Ministries to create the enabling environment for private interests to carry out value-added activities with business skills the country's energy resources are defined.
This structure, for example, places in the Ministry of Energy of energy in a central position as the governmental authority responsible for electricity and water and their mandate includes the formulation of sector policies, sector planning and coordination. The Ministry with the support of the Office of Permanent Secretary, Water Supply Division (WSD), the Radiation Protection Unit, and National Energy and Water Policy, Planning and Coordination (NEWPPCU). Under the jurisdiction of the Ministry, and is handling matters relating to electricity supply, including from hydropower plants schemes and, nominally renewable energy matters related to solar and wind power through the utility companies – National Power Authority (NPA) / Bo-Kenema Power Services (BKPS), the Guma Valley Water Company (GVWC), the Water Company of Sierra Leone (SALWACO) and Bumbuna Hydroelectric Project (BHP).
The functions of other ministries are limited to the handling of oil sales and marketing in the scope of the Ministry of Trade and Industry and the Ministry of Finance issues biomass (vegetable matter and animal), especially the wood managed by the Ministry of Agriculture and Food Security (MAFS), and the extraction of minerals, including energy related minerals such as coal and ore treated by the Ministry of Mineral Resources (MMR).
The energy sector remains such an organizational structure to develop and implement policies related to interdisciplinary energy. Features these various ministries and other authorities in relation to their responsibilities for various energy resources are described in the relevant laws of the Parliament (accessible through Bulletins of government) and the relevant regulations. Some of the relevant Acts are the NPA Act, 1982, the Academy of Police (Amendment) Act, 2005 Forestry Law 1998 and the Petroleum Act 2002. There is also a draft energy policy document prepared by CEMMATS not yet been adopted. The policy document has been formulated in the context of the standard economic, social and environmental well aware of the nature and linkage of the energy sector other sectors and international and regional linkages of the sector.
Moreover, the efficiency and the pursuit of economic value from an investor's perspective internationally, within a complex monitoring system is made less complicated with the "Sierra Leonean Export Development and Investment Corporation (SLEDIC) a statutory body established by section 2 of the Act SLEDIC 1993 with the aim of facilitating the registration of commercial enterprises, helping investors in obtaining permits, licenses, certificates or permits, as appropriate, necessary for the commencement of work, providing information to potential investors on investment, and assist potential investors in identifying joint venture partners in Sierra Leone. "priority investment areas SLEDIC is promoting both, include:
· Energy and energy (power providers)
Agriculture · Agro-Processing
· Department of Mining (kimberlite)
· Exploration and Exploitation of Oil
• The privatization of state enterprises
· Establishment and development of export processing zone (EPZ)
· Infrastructure (rail, roads, telecommunications, water supply), etc.
Energy Outlook
Sierra Leone is very low on the curve utilized in terms of energy provision. The fact is that there are untapped resources of energy, the nation needs these resources, and that the energy industry can coordinate the exploitation of these resources with less environmental impact. indigenous resources of Sierra Leone from renewable energy which include biomass, solar, wind and hydropower has the potential to provide opportunities for households in Sierra Leone all levels. The volume of the country is approximately 656 000 tonnes of biomass crop wastes. It has a potential of 2,700 GWh annual energy that can be exploited for cooking, lighting and power some applications. A commercially viable source of biomass, but there, so the discussion centers biomass has not attracted much discussion and promotion by the government. The Government of Sierra Leone has not seriously addressed energy, fuel and water efficiency in all sectors of economic activity and industrial capabilities has not for optimal use of natural resources for sustainable biomass (unicellular, energy crops, waste, waste). But despite their lack of interest in exploration biodiversity, the government will not stand in the way if the traditional business of biomass in Europe and the United States are interested in developing this potential in Sierra Leone.
The country also has a potential of solar radiation between 1460 and 1800 kWh/m2/yr kWh/m2/yr annually. This can be exploited for lighting and pumping of water, among other applications. These resources provide a fascinating insight into a nation that could have a sustainable supply of energy and economic operation promising its energy resources, energy efficiency was still a core value of the country after independence. The target for sustained economic growth and development must be seen in terms of managing the full utilization of these resources.
The country's hydroelectric potential has also been a history epic. The network of rivers in the country offers an opportunity for hydroelectricity with more than 21 sites already identified as capable of producing hydropower potential. The output conservatively estimated at 1,200 MW, registered in 1996 Power Sector Master Plan by Lahmeyer International, is necessary because the country's extensive network of rivers and tributaries. The current project implementation Bumbuna (Phase I of the capacity of 50 MW, total capacity 275 MW) and the planned Bekongor (III Bekongor capacity of 85 MW capacity total of 200 MW) – two of the many large projects that are economically exploitable – it's good for the country's development and Sierra Leone jobs. But political will have to be there to bring the project to completion Bumbuna 100%. There is also the need to build support environment for private companies to invest in mini-hydro , or "run-of-the river hydro. Bumbuna The project, which "may eventually become the backbone of a national network, has the potential to make a considerable positive impact on the national electricity supply "(CEMMAT policy document, 2004).
In terms of energy infrastructure, national centers in major cities and towns which are actually a collection of regional plants, the needs of both new infrastructure and new ideas. "Most of the provincial stations and networks are in a state of total abandonment. The cost needed to get back to their pre-1994 levels is estimated at 13 million euros "(CEMMAT policy document, 2004). The Bo-Kenema Power Services (BKPS) that has an operating capacity of 5 MW mixed hydrothermal and 4 MW at Bo and Dodo (Kenema), respectively, is facing management problems the same with their business operations as NPA. rural electricity supply is nonexistent. A new electricity policy has expired, although the specific case, the project of CEMMATS on energy policy is instructive in this regard.
There is enough quantified fossil fuels (hydrocarbons) with commercial value in Sierra Leone. These contain important deposits of crude oil on and have not been exploited. Those fossil fuels have not been adequately evaluated to determine its potential value for practical and profitable exploration. Although previous administrations had offered to sell concessions to explore for oil and other valuable mineral resources in the country, had always been institutional secrecy that encloses the possible existence of oil as a source of wealth creation for Sierra Leone. "The location, extent and quality of discovery has remained a subject of uninformed speculation, intense curiosity, and often wild speculation. It a state of affairs to which both secrecy and lack of transparency in the conduct of public affairs in Sierra Leone have contributed greatly "(Focus Sierra Leone). The Petroleum Resource Unit under the authority of the current president and headed by a Director General continues to monitor the possibilities of exploring these oil resources, especially in Europe and / or U.S. investment companies. It is the position of President Koroma that whatever economic benefits attached to the exploration of fossil fuels must be in the interest of national development.
good government groups and the masses was much criticized by government previous inadequate measures of energy supplies in the country. Previous governments failed to put real money in the energy sector which would have a direct impact on the progress of adequate and sustainable supply of electricity in the country. More opportunities may also have been created to effectively support other forms renewable energy. All in all, the energy potential is indeed great. But more emphasis must be placed on an energy policy more conducive to investment, especially in the energy market opening to such huge capital investment and expansion of incentives for investment. Reality is that there is a need (market) for more domestic energy and more energy imports.
The best talents in the energy industry must be accessible and contracted to coordinate and run an efficient A + energy to Sierra Leone. The country needs a balance of vision in the form of a grand strategy to reduce the difficulties facing the country with supplies of commercial energy, particularly electricity supply. Achievable in the short, medium and measures long-term so that the country has to be practically established. And while the grand strategy is getting in place, the government should stop applying power climate change. Global warming has proved so horrendous a global challenge as the War on Terror.
Investment and Capital Market Energy
No doubt an important factor for successful energy policy and management of financial resources. But the energy sector in Sierra Leone struggles with limited budgets and inadequate legislation has prevented the growth of the energy sector, let alone provide a sustainable supply electricity to urban and rural consumers. Clearly, over the years, previous administrations were not in a position where they can afford investing wisely or even create an enabling environment for foreign investment in the energy sector simply because of the widespread corruption in the administration public. The National Energy Authority, for example, has outstanding debts of Le23.4 million dollars of unpaid bills Le16.2 million customers and As fuel bills to oil companies LE8 billion. The authority of utility also has a faulty transmission and distribution system with a 35% technical losses and a drop of 28MW of electricity from the five diesel engines for 6MW of a diesel engine and other problems.
Other logistical problems including the collection, storage and transportation of petroleum products. "Sierra Leone is almost entirely dependent on imports for all its needs of oil and machinery and spare parts "(CEMMAT Policy Paper, 2004). Petroleum products are transported by road in tankers. The poor state of roads exacerbate many problems with transportation.
In addition, funds committed to increasing supplies Power has only contributed relatively little, given the state of impoverishment of the country. Sierra Leone has the lowest gross national product (GNP) amounts allocated to sector so much less than the investments made by countries with higher GNP. However, it is not only the total dollar amount of GDP that matters, but also how that the allocation of GDP is supplemented by foreign direct investment and how such investments in the sector are spent.
It is also possible that government to find funds to support its energy sector. In 2001, for example, World Bank Group funds estimated at U.S. $ 7,500,000 were made available Sierra Leone's government under former President Ahmed Tejan Kabbah to buy a new engine to increase power capacity. But poorly used and rebuilt a 7.5 megawatt was acquired diesel engine.
And most recently, coinciding with the visit of the President of Sierra Leone to the UK, Douglas Alexander, Secretary of State for Development International announced two programs of assistance to Sierra Leone for a total of £ 36 million [- with] £ 20 million to support the construction of energy in Sierra Leone [that] should provide a sustainable supply of electricity to a million inhabitants of Freetown and provide lighting and energy centers health, water pumping stations, schools and police stations "(Press Release).
Given all these possibilities, a perennial issue should be addressed to build sustainable capacity in the energy sector is a change of mentality in society and decision makers. "There is no capacity building initiatives will succeed if governments and the public are not determined to change the situation "(EMBO Reports). Now there is hope with the new dispensation democracy. Of course the office, President Koroma made a statement that energy is his top priority. By far, the Government Koroma is therefore conducive to investment capital in the energy sector. Perhaps, what Koroma administration also has to do is support a clear energy sector initiative in creating capacity to address the problem of appropriate allocation of funds and management of a mechanism for sustainable energy supply.
The strategy is already being pursued by the Koroma administration, which is an update of an energy plan "stimulus" of Freetown and the whole country is commendable. Group A Presidential Emergency Work has been created to monitor the growth of electricity capacity in the country. Have also been taken to involve private interests in the energy sector. Two 48MW independent power producer (IPP) contracts with the investment company of Nigeria Electrix income and investment company Delamore U.S. have recently been signed by the Government of Sierra Leone to add the ability to supply electricity. Income Electrix has shipped equipment and mobilize the commission a 10 MW generator at Black Hall Road to the mains to the eastern part of Freetown. A collaboration between the Government of Sierra Leone with the Nigerian company Income Electrix is a good investment strategy for both countries. Even though Nigeria is focused on being a leading economy through its oil industry have its challenges, Nigeria's participation in global oil reserves is quite impressive. The challenge for Nigeria oil exploitation is not a shortage of oil reserves worldwide-but that connects to the oil reserves to commitments to long-term customer and the capital required to build oil refineries or multi-mil pipeline miles. oil reserves of Nigeria to create a great opportunity to align and integrate with Africa, Africa instead of holding hostage a shortage. A large part of any diplomacy with Nigeria should focus on helping Nigeria to see the benefits of such a relationship.
In general, the energy of Sierra Leone "industry shows the potential to contribute as much as 46 billion (approximately U.S. $ 16 million) annually to government revenue on Excise Tax and the Tax to road users "(CEMMAT policy document, 2004). The potential is significant, even when demand for energy in industrial and commercial sectors is fundamentally the self-generation car that has negative economic consequences. Michael Conteh, a resident technical advisor who is playing a coordinating role in the Ministry Energy and Power and its relations with other ministries and public utilities and power system monitoring and providing advice technical ministry has spoken quite reassuring about the state underused potential energy of Sierra Leone. According to their expert knowledge of the energy sector "Currently, there are no programs in the country for alternative energy. Sierra Leone mixture of power is very limited. Apart from the kitchen that is 95% dependent on biomass, Sierra Leone is almost 100% dependent on imported petroleum products and electricity for all its energy needs. "Once again, restoration operations of the Sierra Leone Petroleum Refinery Corporation (SLPRC) that has a potential capacity of 700,000 metric tons distillation has the potential to generate more revenue for the government. The company requires investment to maintain healthy distillation capacity. The union of the five major foreign oil oil and oil services companies operating in the country, namely Mobil, National Oil Company (NP), Safecon, Unipetrol and Leonoil, and / or other investors in SLPRC is essential to modernize the operations of the refinery and to invigorate the future market potential and encourage the emergence of alternatives.
Royalties Structure and Costs of Corruption
The reward structure of energy is explained in the Local Government Act, 2004 (Local Government Act, 2004). But energy sector in Sierra Leone, with its mixture of multiple public and private actors, has a dark history of poor supervision, lack of transparency and non-payment of public administration and benefits, and incentives for illicit gain are common. The sector has the potential to generate the cash significant operations in comparison with other services and infrastructure sectors like water and sanitation or use of roads. But the most common forms of corruption affecting the sector involving petty corruption that prevails at the interface with customers when bribes are paid to or demanded by meter readers or safety inspectors and the illegal sale of fuel oils. There are also many low-income illegal connections and high-income households and commercial establishments. The impact total of "petty corruption" may be far from stingy, because the losses can amount to more than $ 10 million each year. inadequate collection income and other corrupt practices lead to deterioration in service with frequent power outages and interruptions of supply.
The viability of the energy sector involves therefore a strategic study of the complex systems of sustainable energy supply and revenue collection. Governments can act decisively to address corruption in the privatization of the energy sector, increased participation, competition, more transparent rules, and the revelation. Reforms in the energy sector may be in the form of sale of specific activities, such as power distribution system using prepayment meters strategic investors with a history and a long-term interest in the business. The prepayment meter system currently being tested in Freetown has the potential to increase revenue and reduce corruption in the sector. About 2,000 prepaid meters are currently in use. The government has hired a Chinese investment firm, from Sierra Leone Investment and Development Goujian, SA CV for the supply of 100,000 prepaid meters. "China's influence in the investment climate is in constant expansion [European replacing] and the investment of U.S. to the extent that a Chinese Chamber of Commerce and Industry was launched in 2005. The government has supported investment initiatives in China, apparently due to many years Chinese government's assistance to Sierra Leone. The Hotel Bintumani, ravaged by the invading rebels in 1999, is the lease for 25 years to the construction of Beijing. The Chinese have transformed an old house the displaced, the national workshop, in a [tractor plant masterpiece-concentration from which the prepayment meters Goujian phase Freetown pilot also distributed] "(African Review of Business and Technology). However, a new Sierra Leone under President Koroma is now Open for Business and reforms in the energy sector of the new administration is moving forward include more transparent market rules and coordination of an independent regulatory body with greater presidential oversight management to monitor efficiency of the energy sector more creative.
Opportunities
Efforts to address energy supply and coordination of the challenges should be placed in a policy framework that addresses other issues social. More specifically, these strategies should be part of policies designed to use modern energy services and efficient for achieving development goals sustainable. adequate resources should be available for investment in oil exploration and development activities and must be favorable legal and investment regulatory framework for attracting oil exploration companies. There are issues of supply and storage limitations of various petroleum products and the need refining operation was relaunched in the country. And when clear and unified standards for the operation of retail outlets are also put in place, access to the modern and efficient energy resources is guaranteed.
Guiding national research and development effort to focus on these challenges will require broad international cooperation, increasing the energy sector financing and incentives for private companies. Also lead to the creation of an atmosphere that is tolerant of the use of emerging technologies in the implementation of the objectives of sustainable energy sector. Having a sound energy policy can be seen as strategic for the country's national interests.
Credit: Research Papers Global Integrity
About the Author
Kenday S. Kamara is a native of Sierra Leone, where he attended Fourah Bay College, University of Sierra Leone, 1982-1986. Kenday is an international development consultant in administration, policy development and capacity building. Kenday has consulted for VVMZ (a consulting firm based in Slovakia) as Administrator Expert for the 2007/2008 ACP-EU BizClim Microfinance Demand Survey (a project implemented for the National Commission for Social Action (NaCSA). Kenday is also consultant for Global Integrity – www.globalintegrity.org (an independent, nonprofit organization based in Washington, D.C., tracking governance and corruption trends around the world) and Konesens Research, Inc. – www.konesens.com (a US-based global research and development consulting firm). Kenday is a Ph.D. scholar-practitioner in applied management and decision sciences at WaldenUniversity, specializing in leadership and organizational change. Kenday can be reached at kenday.kamara@waldenu.edu or via Skype at: medcallconsultants
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