IPNEWS: Efforts by authorities of the Liberia Electricity Corporation (LEC) to stabilize and expand Liberia’s power grid is at the verge of a major setback if debts to the neighboring Ivory Coast is not settled.
Ivorian government through the Compagnie Ivoirienne d’Electricité (CIE), has warned that it would cut off power to Liberia if the government failed to settle its substantial debt.
In a communication to the LEC, CIE informed the Liberia Electricity Corporation (LEC) that Liberia’s outstanding debt had reached US$19,691,647 as of the end of June 2024. The Ivorian electricity sector, currently grappling with financial difficulties due to rising generation costs, has declared the debt unsustainable.
In the communication, dated August 26, 2024, the Ivorian electricity company expressed frustration over LEC’s failure to honor its commitment to timely payments. As a result, CIE warned that it would be left with no choice but to suspend power supply to Liberia.
Furthermore, please note that during our last collection visit in February 2024, you informed us of a new clearance plan with a view to reducing the level of unpaid MV bills. To date, this plan has not been complied with, as no payment has been made since the start of the period covered by the plan. Therefore, please note that, in the absence of a response from you within fifteen (15) days regarding the above-mentioned situations, we shall have no other choice than to implement the provisions of Articles 11.4 and 21.3 of the Power Sale Agreement, relating respectively to the suspension of power supply and termination in the event of default by the purchaser.
Compagnie Ivoirienne d’Electricité, the Ivorian Electricity Company
The letter stated: “Furthermore, please note that during our last collection visit in February 2024, you informed us of a new clearance plan with a view to reducing the level of unpaid MV bills. To date, this plan has not been complied with, as no payment has been made since the start of the period covered by the plan. Therefore, please note that, in the absence of a response from you within fifteen (15) days regarding the above-mentioned situations, we shall have no other choice than to implement the provisions of Articles 11.4 and 21.3 of the Power Sale Agreement, relating respectively to the suspension of power supply and termination in the event of default by the purchaser.”
LEC Flies to MFDP
In response to the looming crisis, LEC has urgently appealed to the Ministry of Finance to release funds to prevent the Ivorian government from cutting off the electricity supply.
In a letter dated September 3, 2024, LEC CEO Monie Captan wrote:
LEC has received notice from CIE that cross border supply of electricity through the CLSG will be suspended within 15 days. As you will note, the 2024 National Budget allocated the amount of S3m for payment against energy debt to CIE of Cote d’Ivoire with monthly installments of $228,263.20, which was based on a reschedule of our cross-border debt upon the intervention of President Boakai during his official visit to Abidjan in March 2024.
Captan further noted that the government’s failure to disburse payments has left LEC unable to cover its debts. He urged the Ministry of Finance to urgently release US$2,054,368.80 to cover payments for January to September 2024 and requested additional funds to partially settle the government’s US$16 million debt to LEC.
We requested payment from the Ministry of Finance and Development Planning on June 3, 2024, in LEC letter reference LEC-CEO/041/24 in the amount of $1,141,316 covering installments for January to May 2024. An allotment was prepared for this request in August 2024 with no disbursement. Due to the current urgency and notice of suspension of service, I am requesting that the current allocation be upgraded to cover the installment payments for the months of January to September 2024 in the amount of $2,054,368.80 and disbursed before the 15-day suspension notice deadline.
Monie R. Captan, Chief Executive Officer, Liberia Electricity Corporation
Despite repeated attempts by FrontPage Africa to confirm whether the Ministry of Finance had responded, LEC management did not provide an update by the time of publication.
CLSG, an important power contributor
Liberia, along with Sierra Leone and Guinea, has one of the lowest electricity access rates globally, largely due to high fuel costs, insufficient generation capacity, and unreliable systems. The CLSG project, which enables these countries to import electricity from Ivory Coast, has been a critical lifeline, as Ivory Coast boasts a higher electrification rate and lower-cost electricity production.
The Boakai-Koung administration, upon taking office, endorsed LEC’s plan to boost Liberia’s energy supply. In addition to power generated from the Mount Coffee Hydro Plant, the CLSG line has enhanced electricity availability not only in rural areas but also in urban parts of the country.
In March 2024, President Boakai visited Ivory Coast, where he held productive discussions with Ivorian President Alassane Ouattara. A key outcome of the talks was Ivory Coast’s commitment to expanding its electricity grid to Liberia, which was expected to improve the country’s power supply.
However, observers warn that if the government fails to settle its debts and the CLSG power line is disconnected, it would be a severe setback for Liberia’s electricity sector, which is already struggling with rampant power theft.
Currently, Liberia’s electricity supply is relatively stable due to the rainy season. However, with the rainy season nearing its end, there are growing concerns that the loss of the CLSG power supply could cripple the country’s energy sector, especially during the dry season when water levels at the Mount Coffee Hydro Plant drop, leading to severe power shortages.
