How Sierra Leone Exited Energy Poverty -Amb Henry Macaulay
Sierra Leone’s energetic former Minister of Energy and Power,Amb Henry Macaulay in this interview shortly after the Sierra Leonean election reviewed the nation’s energy sector under his watch.
What should be the role of the energy sector in Sierra Leone’s plan to reach the middle-income status by 2030?
Macaulay- Energy as a significant enabler has a key role to play in both our current economic recovery and in our vision to reach the middle-income status. Energy is also critical for the development of a country and the stimulation of its economy to grow. In Sierra Leone, we need to provide the foundations of an environment where businesses can operate and thrive. The post-Ebola Recovery Strategy and the Agenda For Prosperity as initiatives launched by our former President, was directed towards enabling Sierra Leoneans to make the necessary leap forward. However, entrepreneurs still face extra difficulties as they do not have sufficient access to electricity.
In 2014, when I took office, the former President gave me the mandate to increase the country’s power generated capacity from the existing 100MW to 1000MW. We elaborated a very clear Energy Strategy Plan to achieve it. Our vision was that this electricity would not be only directed to supply individual customers that want to use their appliances, but would also extend to industrial customers which are a key support pillar for our economic recovery. With available electricity, we can stimulate investment: energy is a major factor when decision-makers study future options. With a reliable supply of energy, operational costs will decrease.
Your Ministry launched a 5-year Road Map to increase the generation capacity to 1000 MW by 2017. What was the rate of success?
Macaulay-Conventionally, we see that demand creates supply. However, with electricity we have experienced the opposite seeing that supply creates more demand.
In order to guarantee electricity provision, a holistic approach must be taken, including a regulatory reform, a powerful and diversified generation system and good transmission and distribution networks. The area in which we are lagging was in generation. It is unfortunate that we have not made as much progress as we should, given the amount of effort, creativity and energy we have put into developing our generation capacity.
We have experienced several constraints that delayed our plans. Nevertheless, we have also seen several achievements starting by an increase in the customer awareness and customer service of the energy sector. One of my mantras is “Light is a Right” as we consider that to have electricity is a right. Another of my mantras is “Electricity is Everybody´s Business”. In Sierra Leone, we do not have electricity consumers anymore: we have customers.
Until 2014, the national utility company was government owned. On its privatisation, it was unbundled by separating the generation and transmission operations from the distribution and supply operations; a model which has proved successful in other African countries like Nigeria and Ghana.
The newly established utility companies have therefore had to look for their own income and become self-sustained. A regulator was also established for the sector. Guiding the mindset of the new utilities into a business driven one was a major challenge I faced when I arrived at the Ministry. Now, faults are repaired faster: the loss of income is better appreciated as it is directly linked to the salaries of the employees. Government subsidies are also being eased out because our current system has become performance based. This is an important achievement. The appetite for electricity is also growing as we have seen a multiplication by ten in the figures of people requesting new connections. This is a result of the increasing expectations created by our new model.
Were there new initiatives in renewables like biomass?
Macaulay- Addax Bioenergy Project was one such projects the Government welcomed. It produced sugarcane ethanol and offered renewable electricity from the biomass to power its operations and provide the excess energy to the national grid.
As with many other businesses at the time, the project was affected by a number of unexpected problems including the Ebola outbreak in May 2014. The project was transferred to a group of investors led by Sunbird Bioenergy Africa. We hope the project can now realise its objectives and positively contribute to our clean energy goals.
What were the main improvements that you implemented in the transmission network?
Macaulay-The WAPP Project Agreement was signed by the Ministers of the CLSG countries (Côte d’Ivoire, Liberia, Sierra Leone and Guinea) and construction for the lines commenced by the second quarter of 2017 to be completed by the end of September 2018.
For the transmission network, we recently concluded an upgrade on a key network in the east of Freetown providing much needed access to over 20,000 homes. This was an IDB (International Development Bank) funded project. With the support of JICA (Japan International Cooperation Agency).We also rehabilitated the network in the west (11kv and 33kV lines). In the provincial towns, much needed rehabilitation and expansion work was planned for the Bo-Kenema Axis. (DFID and AFDB funded).
What were the investment opportunities arising in the off-grid technology?
Macaulay-The majority of our population uses solid fuels and coal to meet their basic needs, yet causing detrimental effects to their health. To provide access to clean and renewable energy, the Energy Africa Campaign was launched in Sierra Leone in collaboration with the Government of the United Kingdom, at the Energy Revolution Expo held the 10th May 2016.
The Compact outlines bold energy access targets: Power for all citizens by 2025 (5 years ahead of SDG7 and Energy Africa Access Campaign target 2030) and modern power to 1 million people in Sierra Leone by 2020. To set the pace, the government of Sierra Leone set a target rollout of at least 200,000 units by the end of 2017.
The Rural Renewable Energy Project sponsored by the DFID and implemented by UNOPS is an example of a project meeting the Compact objectives. In 2017, the project provide more than 50,000 homes with solar units and increase access to public services through the electrification of priority institutions such as Community Health Clinics, schools and agricultural business centres through 6kWp PV installations. At least 5,000 solar lamps were also be provided to potential customers on a pay-as you-go basis to further increase the interest in solar products.
Additionally, through private investors including the Renewable Energy Association of Sierra Leone (REASL), various models were developed to provide nationwide access to energy through solar home systems.
In the energy sector, Sierra Leone was the first country participating in the UK’s Energy Africa campaign to sign an energy agreement. How was Sierra Leone perceived by UK investors?
Macaulay- The UK had staunchly supported Sierra Leone through every step from crisis to recovery and forwards to development. I believe it is because the UK recognises that the Sierra Leone Government is serious about changing the trajectory of its progress. For energy in particular, this was shown by us being the first country to sign an energy compact agreement and do so with the UK. UK investors normally see this as evidence that Sierra Leone is open to developing clean and renewable energy and that we welcome businesses looking to enter the market to provide energy supply and support services.
Let me take you back. Could you please describe your master plan to enhance power generation as a minister ?
Macaulay-The government of Sierra Leone then headed by President Koroma sought to rapidly increase power generation installed capacity from about 100 MW to a 1000MW.
That was the energy sector strategy in the long term, which is properly documented. So that was a way to ensure we not only provide electricity for domestic use but also for industrial use and to stimulate economic growth.
Sierra Leone’s Energy potential is tremendous – 27 possible hydropower sites, 500 to 700 million barrels of oil, 2200 Kwh/m for solar power. How did you exploit this potential for energy sufficiency?
Macaulay-The hydro potential is actually almost 5000 kWh/m split between small mini hydro, small hydro and medium large hydro. We have about 5 kWh/m2 per day of Sun so we have a huge solar potential as well. I am not sure about the figures for petroleum because the Ministry of Energy is more fully concern with power and not with petroleum.
With these figures it’s obvious we have a good opportunity to move quickly into renewables, which will promote climate change responsibility and will mitigate against some of the negative results of fossil fuels. This is not to take away the fact that in our situation you definitely need to have a base load because we are still bellow the industrial growth. So we need to have that kind of reliable base load of 24 hours a day which for now as far as technological constrains allow us, regarding the storage of electricity, you can only get that using fossil fuel.
But of course is still important for you to have an energy mix so you can complement fossil fuel generation with other forms of more climate friendly electricity.
We were considering and planning each one of these electricity generation sources with its pluses and its minus. In the case of hydro, it was expensive initially to install, takes time (3-4 years) but after that time you will be able to see a lower tariff and a lower cost of operation.
Solar of course is faster to set up and to achieve commercial results but of course we have to deal with inconsistences of solar; clouds passing by and so on. Also, you need to have some kind of greed flexibility for when you will have those interruptions so the greed will still be protected and maintained.
Hydro has its own seasonality also which we have to consider. In fact our own hydro here, which is the largest power source, will give us 50MW in the raining season but in the dried season can go as low as 5 MW. We are not the only country suffering from this; Kenya has the same problem, Uganda, Ghana and Zambia as well. These are considerations that Government took into account to ensure that you are able to deliver the maximum of electricity.
One of the main objectives of the Agenda For Prosperity (A4P) was to attract and diversify FDI in the country and boost private sector investment, then estimated at only 10% of GDP. What did the Ministry of Energy do to attract investors?
Macaulay -When the former President first came to office, his first program was called the “the agenda for change”, that was focus on five sensitive sectors to make sure that we would turn around our mentality, the way of thinking and the way of doing things to promote and stimulate growth on the country. Later we were talking about “the agenda for prosperity” because we then believed we no longer should be talking about poverty alleviation, we should be talking about wealth creation.
That was the same focus the Ministry of Energy had. I always said that we should not be focussing only on providing electricity for domestic use but we want to make sure that energy provides jobs, that energy provides businesses; energy provides growth, energy provides investment and stimulates the economy.
In the former President’s programme we looked at all the ways that components of the Government come together and gives this one desire outcome.
So in Energy it was simple, if we can have enough electricity for people then you will automatically be able to save more lives, you will improve on healthcare, education and education is very important for long term growth and development and you will improve agriculture because you will have powerful irrigation.
Electricity is also useful for safe water delivery because you will be able to provide powerful pumping stations to costumers. Electricity is also useful for private sector, business small and medium business and also provides peace and security. Electricity plays all these roles.
We were very conscious of the importance of Energy. But the problem of electricity is that it has a reverse economic model, is not demand that creates supply is supply that creates demand.
So when you attract investors to come in they want now two things: how much profit I am going to make and how much money am I going to save.
In terms of how much money investors are going to make you can work that out through the agreements you have with them. But in terms of securing their investment and how much money they are going to save you have to provide them risk mitigating instruments that guarantees their investment. This was why we looked at creative ways to attract investors and to be flexible so that we can provide the necessary conditions for them to come in.
As I said earlier our goal was to rapidly increase power generation installed capacity from about 100 MW to a 1000MW and we pushed for that. We had some challenges but we were almost hitting the target.
The Action National Coalition at their Award Ceremony awarded the Ministry of Energy as the Best Performing Ministry on Saturday 4th February 2017 . What were the main reasons behind this success ?
Macaulay- Energy I called it the most primitive sector because either you have light or you don’t, there is no middle term. In a way it is a very sensitive sector and is one that is very easy to major; if you performing and people has electricity of course they will tell you that you are preforming. If they don’t have electricity they will say right away that you are not preforming. It doesn’t matter for them if I was coming at 7 am in the morning and spent all day working until 10 pm, if people don’t have electricity they will say the sector is not working.
Because of the improvements in electricity we were able to see a better appreciation to our efforts but then it came with a risk to the Ministry, because you raised expectations. And now also knowing electricity is available people were on more demand.
I frequently gave the example of Tunisia because it was an example that impressed me when it comes to Energy. They have 99.8 % energy access. That is because they started delivering planning since 1960’s. They have a pick demand of about 3000-3200 MW but they have installed capacity of 5.000 MW, and every year they add 120 MW. And this is because in electricity you have to have what we call spinning reserve.
When I was in charge we were running our power plans at maximum, and we were not suppose to do that because you are shorting their life span. You should run them at 60 – 70% of the installed capacity, that what is supposed to happen. You need to have more power than what you need today, because machines will break down.
What happens is you are always on and off power because you have more than what you need. So what happens if you have one down, another replaces it and you are fine. So you need to have more power than what you need. But that comes with a price as well.
This was some of the challenges that we faced but the appetizer has been stimulated, appreciation for power was there even at the time when we did a tariff adjustment (last one was in 2008). People complained naturally because of theses tariff adjustment. But at the end of the day people were able to work with the Government.
Our plans then was to keep planning for the future. We just wanted to be constant and remained focus despite of all the issues we were having. We believed we need to ensure we spread the power specially to rural areas where we have most of the solutions such as the “Energy Evolution” which the former President launched in 2016 .
11th August 2016 marked another milestone to the Energy sector when the government of Sierra Leone and the Exim bank of India signed a 78 million US dollars loan agreement at the Ministry of Finance and Economic Development Conference hall for the construction of transmission lines from Bumbuna to Freetown through many routes with sub stations. Could you explain a little bit this project? What is its impact on power generation in the country?
Macaulay-We had one high tension ,the 161KV which is coming from the Bumbuna Town down to Freetown (which is 220 Km). It doesn’t have enough capacity to push the nation to desire destination of electrification. So what the government developed is a three-leg transmission backbone strategy
We had on leg coming from south of Sierra Leone passing trough a potential site of hydro almost at the border of Sierra Leone with Liberia. So this line, original transmission line is coming from Cote d’Ivoire into Liberia and enters in Sierra Leone by this mini hydro site until East of Sierra Leone where we have another mini hydro site with 160 MW up to Bumbuna Fase II and then out of Sierra Leone. It’s a 225 KV and is afforded by the 4 Governments; Cote D’Ivoire, Guinea, Sierra Leone and Liberia and also by development partners: World Bank, European Bank and much more.
We also had the Indian Exim Bank project that you talked about which is another transmission line supposed to start from Bumbuna face II that is also going to be a 225 kV. It’s to come from Bumbuna face II down to Freetown. So it’s a very important line . Because it is a 5KV large capacity will be able to transport more electricity at a time. The third line we had which is going to complete the triangle is a line planned to conclude quickly. That was to be our transmission backbone project.
What was your plan then to make Sierra Leone power sufficient?
We had a plan for 2030, by then we should be power sufficient in Sierra Leone. We were working towards that destination knowing fully well that power never stops, the more you supply the more you need to supply and we are fully aware of that and we hope to be sufficient attracted to investors so they can help the Government to achieve this goal.
Something a bit personal. Your resume is off the charts as your international experience and your languages skills have made you the best performing ministry and minister. What were you most proud as a minister ?
Macaulay- First of all, thankfully for me, I had some preparation before I was appointed a minister . I am an electrical engineer and I had the experience of being a quite successful businessman from the private sector before becoming a diplomat. So I think during those stages I had enough preparation for the job, which some people called a “piousness challenge” because being the Minister of Energy was probably one of the most difficult tasks you can ever have.
I came in as the Minister of Energy at the most transformational time, the time we had to transform the sector. Get rid of the old National Power Authority which was completely Government funded and turn the mentality of the sector around to business oriented.
When I entered I realized I was clearly the only business minded person of the all sector, everyone else was an engineer and they had no idea about business. So it was a very difficult task to change the mind-set of people. I was trying to pass the message that “light is right” is not a privilege is a right, I was trying as well to show that electricity was a business, also telling people that customer comes first and another tool I used was talking to several social media groups for Energy and get all my officials added .
Our people were constantly put under pressure, because my people were constantly reporting. So that was a high-risk strategy because you bring the public into our private space. Before it was shaded and in some kind of mystery where the public only gets what it gets and cannot ask questions back. So that’s something that I did. I put my people under pressure and that’s when I got some results. I tried to tell them that they can’t run away from their responsibility. That was one of the successes I achieved and I look back with some level of satisfaction on being able to change the mentality of people because that was the most difficult.
I remembered been asked in the beginning of my mandate; “Mr. Minister why do you think you will succeed when others had failed?” And I said I am not coming here to teach people engineering because I am sure most of them have more experience then I do. I think its all about management and If I have been able to manage people of other nationalities when I was an Ambassador (for 7 countries based in Nigeria) and also the permanent secretary of ECOAS, I should be able to bring some management skills to the table. So I look back with satisfaction on that.
On the technical aspect I also look back with some delight on the growth we had made in electricity 538% growth on the electricity production.
And also I was able to attract investors and grow the investor’s appetite and I also look with delight to some of the mechanism we were able to develop. So I think my time as Minister of Energy was very well spent and will certainly build a secure foundation for the future and existence of energy sector in this country.
What message to stakeholders in the energy sector?
Macaulay- We must not underestimate a nation’s appetite for electricity. It cannot be said that the manner in which one country increases its demand for power will be mirrored by another. The telecoms sector in Sierra Leone is a case in point that proved wrong all expert assumptions and growth forecasts.
Today technology has not bypassed Sierra Leone and our young ones are as hungry for more gadgets as any other. Even in the most rural of communities, charging sales kiosks for mobile phones are prevalent and notwithstanding the high cost per charge to the consumer.
It is therefore important that any support to be given by a third party or donor agency looking to assist our development plans must support us not according to their assumptions and past experiences elsewhere but based on a model tailored and sensitive to us. The model has to capture our unique characteristics and variances as well as our aspirations and dreams. In short, any support must be to help achieve our agenda and not theirs or any other.
On change of leadership in Freetown,I believe Government should be in continuum and the best way to build a Nation is to BUILD, not to destroy. Let me draw your attention to a newspaper article of July 2014, in which I pleaded not to politicize electricity because of its importance to the nation’s development.
I hold the same view today and pray that my successor builds on the irrefutable successes of the Energy Sector in Sierra Leone.My support is always freely at his disposal and wish him the best of luck.