The government of Sierra Leone and the US’ International Development Finance Corporation (DFC) have signed an agreement for up to US$412 million in financing and political risk insurance for the 108MW Western Area Power Generation Project (WAPGP).

The deal was signed during the US-Africa Business Summit being held in Dallas between 6 and 9 May and aims to support the country’s plans to address rolling blackouts.

The DFC has approved a new loan of up to US$292 million for the development of the WAPGP in Freetown, the country’s capital.

The WAPGP is the first utility-scale independent power project (IPP) in Sierra Leone and will become the country’s main source of electricity upon completion, expanding national generation capacity by 75%.

The project developers are Nairobi-based Milele Energy and TCQ Power, an African-focused early-stage power developer. The output will be sold to Sierra Leone's Electricity Distribution and Supply Authority (EDSA) under a 20-year power purchase agreement.

The combined-cycle thermal plant will be constructed by India’s Shapoorji Pallonji, while Germany's Siemens Energy will provide the steam and gas turbines.

Exciting news for Sierra Leone! 🇸🇱 DCEO Nisha Biswal and CM @dsengeh announce approval of a $292M DFC loan, backed by $120M in political risk insurance, for a power project that will provide access to reliable power amid rolling blackouts. https://t.co/vJE4vTzY3U pic.twitter.com/lPNgnP1NNz

— DFCgov (@DFCgov) May 8, 2024

The power plant will be located near the Kissy Dock, some 4km from the centre of Freetown. It will connect to the existing transmission line at the project site. The main fuel for the plant will be liquefied petroleum gas (LPG), which will be delivered by ship to the nearby jetty and will require a 1km connecting pipeline.

Diesel will be used as a back-up fuel and the facility is expected to convert to natural gas in the future. Desalinated water will be used for cooling, steam generation and other uses at the plant.

Sierra Leone Western Area Power Generation Project (WAPGP)Source: David Moinina Sengeh / Twitter

The DFC will also provide up to US$120 million in political risk insurance to crowd-in private investment, alongside a US$40 million loan from the Ecowas Bank for Investment and Development (EBID).

“The government of Sierra Leone is committed to providing reliable, clean, affordable and sustainable energy solutions to support our national development efforts. We are happy to do so via innovative public and private sector programmes like this one that prioritise impact,” said Sierra Leone’s chief minister, David Moinina Sengeh.

“Milele Energy is dedicated to unlocking some of Africa’s most critical energy projects and we applaud the government of Sierra Leone to conclude this project that will lower cost, improve reliability and allow for the expansion of industrial demand,” said Milele Energy CEO, Erik Granskog.

Sierra Leone has an electricity access rate of just 26%, which falls to 5% in rural areas. The government has committed to increase the national electrification rate to 92% by 2030.