Analysis of Governance Issues in the Energy Market in Sierra Leone
The context of energy policy in Sierra Leone
In December 2004, a study sponsored by ECA and CEMMATS Group Ltd., a firm of consultants, stakeholders in the sector to formulate an energy policy. The agenda of energy CEMMAT for Sierra Leone in policy and management form an important set of tools that includes essentially an interdisciplinary bringing together sectors of the Energy Community – Ministry Energy and Energy (MEP), Trade and Industry Department, Ministry of Finance, Ministry of Agriculture and Food (MAFS), the Presidential Commission of Petroleum and the Ministry Mineral Resources (MPR). These ministries on the agenda of energy, with their different roles to be identified, have dominated the development of the country’s energy policy. The basic premise of this multi-disciplinary structure is that it is crucial for the effective coordination of management of local energy resources of the country. However, it sounds like it was impossible to coordinate so many organizations in a country with a history of corruption and mismanagement. But it is not uncommon for different departments, working in cooperation to achieve national development goals. In addition to the tasks and specific procedures that affect the ability of departments to create an environment conducive to private interests to perform skillfully value-added business with the country’s energy resources are defined.
This structure, for example, places the Department of Electrical Energy in a central position as the governmental authority responsible for electricity and water sector and its mandate covers the areas of development, planning and coordination . The Ministry is supported by the Office of Permanent Secretary, Water Supply Division (WSD), the Radiation Protection Division, and National Energy & Water Policy, Planning and Coordination Unit (NEWPPCU). According to the department and the handling of issues relating to electricity supply as hydroelectric plants and, because of the size of renewable energy on Bo solar and wind power by utilities – National Power Authority (NPA) / -Kenema Power Services (BKPS), the Guma Valley Water Company (GVWC), Sierra Leone Water Company (SALWACO), and the Bumbuna Hydroelectric Project (BHP).
The roles of other departments is limited to dealing with sales marketing oil down for Trade and Industry Ministry and the Ministry of Finance Affairs biomass (plant and animal), especially treated wood Ministry of Agriculture and Food (MAFS) and the extraction of minerals, including energy related minerals such as coal and ore processed by the Department of Mineral Resources (MPR).
The energy sector is the organizational structure to develop and implement interdisciplinary energy related policies. The functions of these various ministries and other authorities regarding their responsibilities for different sources are described in the Acts of Parliament (available from state newspapers) and legislation. Some of the relevant laws include the Law on the IR 1982, NPA (Amendment) Act, 2005, the Forestry Act 1998 and Petroleum Act, 2002. There is also an energy policy bill drafted by CEMMATS awaiting adoption. The policy document was developed as part of standard economic policies, social and environmental attention and the nature and links with the energy sector with other sectors, and international and regional relations in the sector .
In addition, to find effective ways and the economic point of view of international investors in a system with such a complex regulatory be less complicated with the development of Sierra Leone Investment and Export Corporation (SLEDIC), a body established by Article 2 of the Act SLEDIC, 1993 May, with the main objective of facilitating the registration of commercial enterprises, helping investors to obtain permits, licenses, certificates or permits, if applicable needed to initiate activities, provide information to potential investors on investment issues and to assist investors to identify potential partners in Sierra Leone. ” The priority investment areas SLEDIC thus facilitates the following:
· Energy and Energy (independent contractors)
• Agriculture and Agri-Food
· Mining (Mining Kimberlite)
· Petroleum Exploration and Exploitation
· Privatization of SOEs
• Designing and development of Export Processing Zone (EPZ)
· Infrastructure (railways, roads, telecommunications, water), etc.
Energy Outlook
Sierra Leone at the bottom of the curve under-used on insurance staffing of energy. The fact is that there are untapped energy resources, the nation needs these resources and the energy industry can coordinate the use of these resources with less impact on the environment. Indigenous energy resources of Sierra Leone to renewability, including biomass, solar, wind and hydropower has the potential to create opportunities for households to Sierra Leone at all levels. Volume of biomass, the country is about 656,000 tonnes of waste collection. It has an annual energy potential of 2700 GWh, which can be used for cooking, lighting and some power applications. A supply of commercially viable biomass is, therefore, but discussions on the biomass plant has not generated much discussion and promotion of government. Government of Sierra Leone was not serious energy, fuel and water in all sectors of the economy, and have not developed the capacity for optimal use of natural resources for sustainable biomass (unicellular-energy crop residue waste). But despite his lack of interest in bio-prospecting, the government will not remain within its traditional biomass in Europe and the United States is interested in developing this potential in Sierra Leone.
The country also has a potential of solar radiation between 1460 kWh/m2/yr and 1800 kWh/m2/yr annually. This can be used for lighting and pumping water among other applications. These resources provide a fascinating insight into a nation that may have had access to sustainable and profitable exploitation of their promising energy sources, energy efficiency remained a core value in the country after independence. The objective of sustainable economic growth and development should be considered in terms of dealing with the full utilization of these resources.
The country’s hydroelectric potential has been an epic story. The network of rivers in the country offers an opportunity for hydroelectricity with more than 21 sites already identified as being able to produce hydroelectric energy potential. A conservative estimate of production of 1200 MW, registered in 1996 Power Sector Master Plan which Lahmeyer International, is necessary because of its vast network of rivers and tributaries. The completion of the project being Bumbuna (Phase I capacity of 50 MW the total capacity of 275 MW) and the proposed project Bekongor (III Bekongor capacity 85 MW, total capacity 200 MW) – two of many major projects are economically recoverable – which is good for developing countries and Sierra Leone jobs. But the political will must be there for Bumbuna project 100% completed. It is also necessary to create an enabling environment for private enterprises to invest in small hydro, or “run-of-the-” hydro River. Bumbuna The draft, which “may eventually become the backbone of a national network, has the potential to generate a significant positive impact on the national electricity supply “(CEMMAT policy document, 2004).
In terms of energy infrastructure needs of national power in the larger cities, which is actually a collection of regional plants, both new infrastructure and new ideas. “Most provincial stations and networks in a state of complete disrepair. The costs to reduce the level of 1994 is estimated at 13 million euros (CEMMAT policy document, 2004). Bo-Kenema Power Services (BKPS) which has a mixed hydro-thermal operating capacity of 5 MW and 4mW Bo and Dodo (Kenema) and deal with management problems along with its business under the NPA. The supply of rural electricity is nonexistent. A new political power is outstanding, but the specific issue is the proposal CEMMATS on energy policy instructive in this regard.
It is quite quantify fossil fuels (hydrocarbons) with a commercial value in Sierra Leone. These include large deposits of crude oil ignited and was not used. These fossil fuels have not been properly evaluated for their potential value to exploration and profitable practice. While previous administrations had offered to sell concessions to prospect for oil and other valuable mineral resources in the country, had always been the institutional secrecy that surrounds the potential presence of oil as a source of prosperity for Sierra Leone. “The location, extent and quality of discovery has been the subject of uninformed speculation, intense curiosity, and often wild guesses. This is a situation that both the secrecy and lack of transparency in the conduct governance in Sierra Leone has made a significant contribution “(Focus Sierra Leone). Petroleum Resources Unit, headed by current President and is headed by a Director-General continues to review opportunities to explore oil resources in particularly in Europe and / or U.S. investment company. It is the government’s position, President Koroma to some economic benefits associated with the exploration of fossil fuels should be of interest to national development.
Good governance groups and crowds openly criticized previous administrations for inadequate measures for energy supply in the country. Previous governments have not put real dollars in the energy sector, where they have had a direct impact on forward-looking, a sufficient and sustainable supply of electricity in the country. More opportunities could be created to effectively support other forms of renewable energy. Overall, the potential energy undoubtedly great. But the emphasis must be placed in more investment-friendly energy policy, particularly in the energy market open to high capital investment and expand incentives for investment. The reality is, it is necessary (the market) for more domestic energy and more energy imports.
The best talent in the energy sector must be achieved and maintained to coordinate and effectively manage an A + energy program for Sierra Leone. The country needs a balance between vision in the form of a grand strategy to reduce the problems it faces in the commercial energy supply, including electricity. Achieved in the short, medium and long term to reduce the country it should be virtually absent. And while the grand strategy are implemented, the government should not lack the energy to connect to climate change. Global warming has been proven to be so horrible a global challenge that the “war against terrorism.
Capital investment and energy market
Course is an important factor in energy policy and the successful management of financial resources. But the energy sector in Sierra Leone is struggling with limited budgets and insufficient legislation does not allow growth in the energy sector, let alone provide a sustainable supply of electricity to urban and rural consumers. Clearly over the years, previous administrations were not in a position where they could afford to invest wisely and create a climate conducive to foreign investment in the energy sector only because of widespread corruption in public administration. The National Power Authority, for example, 23d outstanding debts. 4 billion, and unpaid bills LE16 client. 2 billion fuel bills to oil companies in LE8 dollars. Administration tool also has a bad transmission and distribution of 35% technical losses, and a statement of 28 MW of electricity from five 6mW diesel engines with a diesel engine, among other problems.
Other logistical challenges include the supply, storage and transportation of petroleum products. “Sierra Leone is almost entirely dependent on oil imports every need, and machinery and spare parts” (CEMMAT policy document, 2004). Petroleum products transported by tanker. In poor roads exacerbate many problems with transport.
In addition, increased funding for energy supplies have contributed only a relatively small, given the depleted state of the country. Sierra Leone has a gross smaller gross domestic product (GDP) with the amount allocated to this sector has much lower than the investments made by countries with high GNP. However, it is not only the total amount of money from the GNP account, but also how the distribution of GDP is supplemented by foreign direct investment and how investment in the sector are spent.
In addition, it is possible for the government to find funds to support the energy sector. 2001, for example, the funds of the Group of the World Bank, estimated at $ 7. 5 million available to the government of former Sierra Leonean President Ahmed Tejan Kabbah to buy a new engine to increase the production capacity of electricity. Without a redesigned and misused 7th 5-megawatt diesel engine has been acquired.
And very recently, “coincided with the visit of the President of Sierra Leone in the UK, Douglas Alexander, Secretary of State for International Development has announced two programs to assist Sierra Leone in total 36 million pounds [- to ] 20 million pounds to support the strengthening of energy sector in Sierra Leone [that] ensure a sustainable supply of electricity to one million inhabitants of Freetown and provide lighting and electricity for health centers, the water pumping stations, schools and police stations “(press release).
Given all these possibilities, a recurring question to solve in order to create sustainable capacity in the energy sector is a change of attitude in society and among policymakers. No initiative for capacity building successful only if governments and the public is determined to change the situation “(EMBO reports). Now there is hope with the new democratic regime. In his office, President Koroma on the statement that energy is his top priority. To a large extent is the Koroma government is conducive to investment in the energy sector. Could be that the Koroma administration also needs to do is support the initiatives of a strong energy sector in building capacity by addressing the problem of allocating adequate resources and management of a mechanism for sustainable energy.
The strategy already followed by the Koroma administration is carrying out a plan “energy incentive” for Freetown and the entire country is commendable. A Presidential Task Force of emergency has been established to monitor the increase of electricity production in the country. Measures were also taken to involve private interests in the energy sector. Two 48MW of independent power producers (IPP) contracts with the Nigerian company Electrix Investment income and investment company American deal recently signed by the Government of Sierra Leone to add capacity of electricity supply. Income Electrix has already sent materials and vows to order a 10 MW generator at Black Hall Road in the electricity supply in eastern Freetown. A government of Sierra Leone in collaboration with the Nigerian Corporate Income Electrix is a good investment strategy for both countries. Although the focus on Nigeria a leading economy with its oil industry has its challenges, from Nigeria of world oil reserves are quite impressive. The challenge for oil in Nigeria is not a lack of global reservoirs of oil, but rather linking the oil reserves for long-term commitments to customers and the capital required to build refineries oil or pipelines thousands of millet. The oil reserves of Nigeria to create an extraordinary opportunity to customize and integrate with Africa rather than holding Africa hostage by the shortage. Much of any diplomacy with Nigeria should focus on assistance to Nigeria to see the benefits of such a relationship.
In high-energy performances of Sierra Leone “industry’s potential to contribute as much as LE 46 billion (about U.S. $ 16 million) annually to government revenue in the form of excise duty and road tax (CEMMAT document Policy, 2004). The potential is remarkable, even when the energy demand in industry and commerce is largely borne by self-generation car that has negative economic consequences. Michael Conteh, a resident adviser, who is the coordinating role of the ministry of energy and power and its relations with other departments and energy companies, and monitoring of the electricity system and provide technical advice to his office have spoken to all is reassuring that the state of under-utilized enormous energy potential of Sierra Leone. According to his expertise in the energy sector, “there is currently no programs in the country for alternative energy sources mix energy. Sierra Leone is very limited. Apart from cooking, which is about 95% dependent on biomass, Sierra Leone is almost 100% dependent on imported petroleum products and electricity for its energy needs. “Once again, restore operations in Sierra Leone Petroleum Refinery Corporation (SLPRC) which has a potential capacity of 700,000 tons of distillation has the potential to generate more revenue for the state. The company requires investment to maintain safe their distillation capacity. Bringing the five major oil companies oil and foreign oil companies operating in the country namely, Mobil, is the National Petroleum Company (NP), Safecon Unipetrol and Leonoil, and / or other investors in SLPRC essential to renew refining operations and future potential of healthy market and stimulate the emergence of alternatives.
Structure of fees and costs of corruption
The fee structure energy defined in the Local Government Act 2004 (Local Government Act, 2004). But the energy sector of Sierra Leone, with its mixture of multiple public and private, has a lamentable history of poor control, lack of transparency and inadequate public service pay and benefits and incentives for illicit gains are legion. It has the potential to generate significant cash transactions in relation to other services and infrastructure such as water and sanitation or road use. But the common forms of corruption plaguing the sector includes the petty corruption that occurs in interaction with clients such as bribes paid to or required by the meter readers and inspectors and safety sale Illegal fuel. There are also many illegal connections, low income households with high income and commercial enterprises. The combined effect of “petty corruption” May be far from minor because losses could amount to more than 10 million U.S. dollars annually. Revenue collection and inadequate corruption of others leads to worse service with frequent power cuts and disruptions.
Profitability in the energy sector is a strategic study of complex systems for a sustainable supply of electricity and tax collection. Governments can act with determination to fight against corruption in the energy sector privatization, competition, clearer rules and more information. Reforms in the energy sector in May as the sale of specific activities such as system power distribution for prepaid meters to strategic investors who have proven experience and a continuing interest in the company. The prepaid metering system on trial in Freetown has the potential to increase tax collection and reduce corruption in the sector. About 2,000 prepaid meters are today. The Government accepted the PRC investment company, Sierra Leone Gouja Investment and Development, Ltd. for the supply of 100,000 prepaid meters. “The Chinese influence on the investment climate is steadily increasing [replaced the U.S. and European investment] to the extent that trade and the Chinese Ministry of Industry launched in 2005. The government supported the initiative of Chinese investment, apparently due to many years of support from the Chinese government for Sierra Leone. Bintumani Hotel, destroyed by the rebel invasion in 1999, is leased for 25 years for the construction of Beijing. The Chinese have turned a former home for displaced people, the national workshop in an assembly plant centerpiece of the tractor [where Gouja prepaid meter run in Freetown has 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, the new government went further and understand the rules of the market more open and to coordinate an independent regulator with greater presidential control to monitor the effective management of energy more creatively.
Facilities
Efforts to address energy security and the challenges of coordination should be placed in an important political framework that addresses other social issues. More particularly such strategies should be part of policies to use modern energy services and effective in achieving the objectives of sustainable development. Adequate resources should be made available for investment in oil exploration and development, and it must be the main investor friendly laws and regulations to attract oil exploration companies. There are problems of supply and limited storage of various petroleum products and the need to resume refining operation in the country. And when the clear and uniform standards for operating points in detail is also included, access to modern energy efficient and is guaranteed.
Guiding national research and development efforts to focus on these challenges will require broad international cooperation, increased funding of energy and incentives for private companies. It will also create an atmosphere that is tolerant to the use of new technologies in the implementation of the objectives of energy sustainability. Has a stable energy policy can be considered as strategic for national interests.
Credit: Global Integrity Research Papers
Category: Hydro Energy
