Abu Dhabi Fund for Development provides Dh33m backing for Sierra Leone solar park
Abu Dhabi Fund for Development is backing a solar power project in Sierra Leone as the country seeks to diversify its energy sources.
As part of the long-term, low-interest loan agreement, ADFD will provide Dh33 million to build a 6 megawatts solar park in the West African country’s capital Freetown.
The project will be directly monitored by ADFD.
“To achieve economic inclusion, we should be able to as much as possible do the required energy generation and achieve a power mix,” said Kaifala Marah, the minister of finance and economic planning of Sierra Leone. “This will be a flagship project not only for our country but for the whole region of West Africa.”
The total cost of the project is US$18 million, funded equally by ADFD and the Sierra Leone government. The country has an installed capacity of 96 megawatts, according to Bloomberg, but that falls short by 200MW of demand. It is also considering hydropower projects as part of efforts to shore up its energy production to attract investors.
The solar park will be constructed along the 21-kilometre Toke-Lumley highway, which ADFD helped to finance in 2011 with a loan of Dh20m.
The project will be linked with the main power grid, and is estimated to help 60,000 people, or 38,000 households, in Freetown and its suburbs, Mr Marah said.
It is expected to start in three months, and will take less than 18 months to complete.
Much of Sierra Leone’s economy depends on mining, including diamonds and aluminium, and in 2011 about 53 per cent of its 5.97 million population lived below the poverty line, according to the World Bank.
The sub-Saharan country ranks 142nd out of 189 countries in the Doing Business index from World Bank. While it scores near the bottom of the table for indicators such as securing electricity and construction permits, it ranks higher in investor protection and ease of getting credit.
ADFD committed in 2009 to pledge loans worth Dh1.285 billion for renewable energy projects in the developing world. The loans will be made in seven cycles of Dh183.6m each. Abu Dhabi-based International renewable Energy Agency selects the projects for the funds.
In May, ADFD funded a solar project in Mauritania for Dh18.36m.
It is also looking to fund four additional projects in Ecuador, Maldives, Mali and Samoa for Dh99.24m.
“We believe in the importance of encouraging investment in renewable energy and that’s why we launched this initiative,” said Mohammed Saif Al Suwaidi, ADFD’s director general.
ADFD, established in 1971, manages foreign aid. Last year it gave loans worth Dh497.11m for four electricity, water and transportation projects in Bangladesh, Albania, Kenya and Mauritania.
It also gave total grants of Dh11.475bn in Jordan, Morocco, Bahrain, Guinea and the Palestinian Territories last year.
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Updated: June 29, 2014 04:00 AM