Monrovia, February 2, 2007—
Lars Thunell, Executive Vice President of IFC, the private sector arm of the World Bank Group, today signed an advisory mandate with the government of Liberia to support redevelopment of the country’s electricity infrastructure after nearly two decades of civil war. The agreement marks IFC’s first advisory mandate with Liberia’s government.
IFC will advise on securing private sector investment to supplement the government’s limited resources and provide Monrovia with electricity for the short to medium term, until a more permanent solution can be achieved. IFC expects the mandate to trigger further private sector–driven reconstruction and development in Liberia and to provide a model for other projects in the country.
“Public-private partnerships are a business model that helps increase private sector investment in public infrastructure, helping meet the needs of a growing economy and improve services, especially for people who need them most,” said Mr. Thunell, speaking during his first visit to Liberia.
“As a private sector development institution and a member of the World Bank Group, IFC has a unique capacity to structure private participation in infrastructure projects in a way that balances commercial viability with the public good,” Mr. Thunell said.
The development of the power sector is a crucial component of Liberia’s reconstruction and development strategy. The country’s pre-war electricity generating capacity of 180 megawatts has been completely destroyed, and most related infrastructure has been pilfered. The entire system needs to be rebuilt to ensure basic coverage, reliability, and access. The lack of electricity adversely also affects export-oriented enterprises and discourages foreign direct investment in other sectors.
The Liberia Electricity Corporation manages a temporary scheme that was prepared with support from the European Union, USAID, and the World Bank. This provides about 2.3 MW of electricity to public buildings, such as hospitals and schools, and streetlights in two neighborhoods in Monrovia. The rest of the country runs on individual diesel generators and a few small, run-of-river hydropower plants.
The government recently signed a memorandum of understanding with development partners, including the EU, USAID, the World Bank, and Norway, to commence a second program that will provide an additional 7.9MW of generating capacity and include network rehabilitation, maintenance, and support for fuel costs. The objective is to provide electricity and especially streetlights to additional neighborhoods in Monrovia.
Donor funding for both programs will end in June 2008. Hence IFC’s advisory mandate will focus on advising the government on selecting a private operator to supply Monrovia with electricity from 2008 until a more permanent solution can be found.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC provides financial products for private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides advisory services to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in advisory services. For more information, visit
www.ifc.org.
