Power Cuts Hit Sierra Leone After $40 Million Unpaid Debt
Turkey’s Karpowership has switched off electricity supply to Sierra Leone’s capital city Freetown over an outstanding debt of some $40 million, the energy minister of the West African country told Reuters on Friday.
Karpowership has 36 powerships with a total of 6,000 MW of installed capacity, and powers towns and communities in more than 20 countries.
Sierra Leone’s debt “was accrued over time because the government subsidises more than half the cost the ship charges per kilowatt hour,” Kanja Sesay told Reuters.
The government is spending a lot of money on subsidies because consumers pay for power in the local currency, the Leone, which is one of the worst-performing currencies globally against the U.S. dollar. Sierra Leone, however, pays to Karpowership for the electricity in dollars.
Karpowership is one of the three power sources for Sierra Leone’s capital. The other two are a hydropower dam and electricity from an interconnection with the Ivory Coast. The interconnection also supplies power to neighboring West African countries Guinea and Liberia.
Energy consumption in the country is largely dominated by biomass sourced from fuelwood and accounts for around 80% of the energy used, according to the U.S. government. The country imports petroleum products for power generation which account for 13% of energy consumption.
As of 2021, only 15% of the total population in Sierra Leone and about 2.5% of the rural population had access to electricity.
The West African country’s power sector is small, with less than 150 megawatts (MW) of energy capacity connecting fewer than 150,000 customers, while the cost for electricity is heavily subsidized. The entire country lacks a stable and reliable public power supply and domestic demand remains significantly unmet.
“Although Sierra Leone is endowed with energy potential in various forms including biomass from agricultural wastes, hydro and solar power, it remains underutilized,” the International Trade Administration says.
By Charles Kennedy for Oilprice.com
Sierra Leone faces power disruptions as Turkish power ship turns off electricity supply
Freetown, the capital of Sierra Leone, is experiencing power outages as Karpowership, a Turkish company, has halted the electricity supply due to an outstanding debt of approximately USD 40 million, as announced by Alhaji Kanja Sesay, the Minister of Energy, on Friday, September 8, 2023.
The energy minister explained that this debt had accumulated over time because the government subsidizes more than half of the cost per kilowatt hour charged by the ship. The government’s increased subsidy is necessitated by the fact that they bill consumers in the local Leone currency, which has significantly weakened against the dollar, the currency in which they pay the power provider.
In response to the crisis, a government commission has been established to reassess consumer electricity tariffs, which could potentially double in order to address the financial shortfall.
Karpowership, a prominent operator of floating power plants globally and a division of the Karadeniz Energy Group, had previously entered agreements in 2018 and 2020 to supply electricity to Sierra Leone’s state power utility. The company has established similar agreements with numerous African countries grappling with electricity shortages. As of now, Karpowership has not provided any comments on the situation.
According to the information on its website, Karpowership has been providing Sierra Leone with approximately 65 megawatts of power generation capacity since 2020, covering 80 percent of the country’s total electricity requirements.
Sesay revealed that the suspension of electricity supply by Karpowership has resulted in a 13 percent reduction in power availability to the capital. Consequently, electricity is now being rationed in Freetown, with households and businesses enduring daily hours without power.
Karpower represents one of three primary sources of electricity for the city, the other two being the country’s hydro dam and power from an interconnection with Ivory Coast, which also serves Guinea and Liberia. Sesay noted that Karpower’s supply is particularly crucial during the dry season when water levels at the dam are low, while reliance on the company diminishes during the rainy season. Currently, Sierra Leone is in the midst of its peak rainy season, which spans from May to November.
Credit: Reuters
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