International Bank (Liberia)

Transcription

NARRATOR>> With the help of USAID and other donors, President Ellen Johnson Sirleaf delivered on her promise to bring a "small light today" to Monrovia. But achieving "big light tomorrow" was much more challenging. The Liberia Electricity Corporation lacked the capacity to rebuild and expand an electricity sector that had been reduced to nothing during, and after, the 14-year civil war. WEYNAND>> The Liberia Electricity Corporation was in a rather broken down building with a huge hole in the parking lot where a sewer pipe had broken loose and sewage was in there and they had holes in the walls and none of the windows were in there. They were a utility basically with no job. They had no generation facilities, no customer base, no electricity that was actually flowing. NARRATOR>> Starting from zero, international donors turned to a unique arrangement for managing LEC. They focused on a management contract developed by the International Finance Corporation of the World Bank. ISABEL>> And so as the government wanted to maintain LEC under public control, and also the donor community was more comfortable with giving money to a public utility than a private utility. So we decided to go with a management contract. NARRATOR>> A five-year, performance-based management contract was awarded to Manitoba Hydro International of Canada. ISABEL>> A management contract is a sort of public-private partnership. The management contract typically transfers part of the operational risk to the private operator. And this requires that the private operator has the authority to operate and you must have management contracts that are performance based, where the operator should be paid depending on results. MOHAMMED>> The management contract started from July 1st, 2010. This is a five years contract and it is the full responsibility for managing LEC. RASMUSSEN>> Norway would finance the management contract, which is the management of the LEC, but has to be discussed with other donors because donors contribute for the running of the LEC, that is the projects for transmission and distribution. ISABEL>> So far it is very successful. It is recognized by all donors as a very successful example. We've been called to other countries to replicate the Liberia experience, so this shows that the donors want to do more of it because they see the value of doing things properly. WHITAKER>> The IFC letting that contract to Manitoba Hydro was proof that EPP had been successful. That would not have happened had we not properly executed EPP and met our goals and made LEC a sustainable business. MOHAMMED>> There are key performance indicators. We have to reduce the losses. We have to improve the collection to 97%. The contract says we have to expand our customer base to 33,000 over a period of five years. We are now targeting that instead of doing 33,000 customers, provided if enough funding is made available, we are targeting to connect 87,000 customers. NARRATOR>> One boost to improving collections and increasing connections was the introduction of pre-paid metering. WILLS>> What was happening in the past was that people would get their bill at the end of the month, determine that they couldn't, they didn't have the resources to pay it, and then we'd go through a back and forth of trying to figure out how to collect the money from them, and perhaps disconnecting them and having to reconnect them. WHITAKER>> I can remember two firm rules we had that everyone pays for his electricity or it gets disconnected. And sometimes we were disconnecting ministers' residences and other times we were disconnecting restaurants owned by influential people. WILLS>> All those collection issues have now gone away. And the fact of the matter is that we connected 5,000 new customers last year and the peak load, that is the load we have to supply from generation, actually went down, primarily because the existing customers can now manage their energy consumption. This was supported by USAID, and became, of course, a very good energy conservation program. MAYAH>> So the prepaid meters have definitely reduced our burden of how we manage the customers. And so far I'm told from the financial reports that also our cash flow has improved. Because now we don't wait for the billing cycle to get income. Now people consume on a daily basis. They just go and buy, and we see steady income throughout the month. NARRATOR>> USAID is now evaluating the relative impacts of pre-payment meters and other new efficiency measures, such as fluorescent light bulbs, on electricity consumption and affordable service. During the first two years of the Management Contract, connection targets were met and should be significantly exceeded in the third year. Collections have improved to better than target, and are expected to be close to 100% in the future years. Operating efficiency is expected to improve as fixed costs are spread over a larger customer base with increased consumption. But as the system expands, the market for illegal connections also expands. MOHAMMED>> The biggest challenge in terms of someone coming from outside and managing the utility is the governance, the local governance. Especially in the developing countries, there is always a tendency of people abusing the product. People steal power. We never anticipated at the time that it could be this paramount. People steal a lot. MAN>> We are being instructed by the CEO, Mr. Shahid Mohammed, what happened last month our losses were up to about 30 to 40 percent, which is so high. It's like putting the corporation at a loss. So we have been instructed and mandated by the CEO to carry on an anti-theft sweep campaign, where we'll be able to root out illegal connections done by people that are tampering with our meters out in the field. MOHAMMED>> We've gotten some good success against it, but at the same time, we're not 100 percent successful and that is still a challenge. And then of course, the procurement lead times. We never anticipated it could take so long. We have a combination of different funders. They have their own procurement procedures and rules and their approval processes. MAYAH>> That we should prepare a financial document, project document that describes the project itself. MOHAMMED>> and that takes quite a lot of our time, which we would have loved to use for implementation of the product as opposed to just continuing procuring those supplies and services. The other challenge is the capacity. Unfortunately in this country, capacity is extremely low. NEYOR>> When we came in at the end of 2005 when President Sirleaf got elected the infrastructures were all gone and the individual technicians were just skeletons as well in terms of their expertise and in terms of their experience, because they are not doing anything in terms of practice, doing their work for over 10-15 years. So that was one of the challenges. NARRATOR>> Another challenge was finding new workers as LEC resumed and expanded business. TEACHER>> So we say three times eight is what? NARRATOR>> During the civil war, education ceased. So at the end of the war in 2003, you had a generation of teenagers and young adults who couldn't read nor write. DASIC>> And now there are fathers, they have families, and they need to feed their families, but they cannot find a job without some kind of education so USAID and some other donors are trying to address that problem in a way that will not embarrass that father to go to school with his child. NARRATOR>> Another challenge to building capacity is recruitment. MAYAH>> It's not so easy to recruit people in a war zone, nationals to come back. So what we needed was a group to come here and help us start a well, professional, managed utility. And of course when you create such an atmosphere, and of course assuming the politics is okay, then you will be able to recruit people to come back to work. So this is the conscious decision that we made with the government of course supporting us. That's how MHI came in. TEACHER>> We have to listen carefully MOHAMMED>> What we did is we went down to the local vocational institution where we picked up star-performing, diploma holders, young graduates, 63 of them. We are training them on job. In class, a combination of in-class training, plus the on job training, they are with us, paying them some little stipend for them to survive and their training is going tremendously well. And the other one is regular, formal training. We have designed a very nice $4 million worth of training program, a comprehensive one, and in that training program, we have several modules for all linesmen, for general care people, for meter readers, for middle managers, financial management. All different kinds of modules are in there. So the capacity building is moving on very fine. And the target is that by the time the management contract is exited, the locals have the capacity enough to take it over from there and then continue. NARRATOR>> Recently, MHI's responsibilities have expanded to include the rehabilitation of the Mt. Coffee Hydropower Facility. The 64 MW facility was stripped to its shell by looters during and after the civil war. WEYNAND>> When we were there in 2006, there were people laying underneath the turbine generator sets pulling the plates out, because they could sell the metal. We saw a place where an I-beam had been stuck out and somebody must have spent hours cutting the end of the I beam off so they would have a piece of steel that they could drag to the capital and sell and be able to feed their family. NARRATOR>> Reconstructing Mt. Coffee will quadruple the amount of power in LEC's grid during the wet season. WILLS>> Mt. Coffee is very important to the government of Liberia. It is definitely, you know, going to be one of those hallmark projects that shows that Liberia is on the road to recovery and of course people are looking forward to it for jobs. Certainly people in the area of Mt. Coffee and those people who were associated with past operations. ISABEL>> I think, in Liberia, what people really want is the power. And if there is an improvement in service I think people will be happy. Although tariffs are very high, today, the highest in the world. It's about .53/kwh because it's a very small system and all diesel based. But we hope with Mt. Coffee the tariffs will come down substantially. And Mt. Coffee would not be possible without the management contract in place. LEC MANAGER>> $3.1 million is transferred into the Mt. Coffee account. SIRLEAF>> We know that your vote was a vote for change RASMUSSEN>> There's no doubt that Madame President. Ellen Johnson Sirleaf, is the main person and the driving force behind the development of Liberia and to attract donors. Look at the Mt. Coffee project. Normally, in my experience we would start, we would prepare and it could take seven, eight years. Not for Madame President, it will take three-and-a-half years because she knew that it was possible. MOHAMMED>> We have to connect about 87,000 customers for us to be able to build 60MW of load, which should be good enough for us to utilize the power that we're going to generate at Mt. Coffee. And for that we need additional funding. Two types of additional funding are urgently required. One funding is for T&D for us to be able to expand our transmission and distribution system and connect more customers. Then we all know that Mt. Coffee is only for six months of the year. And for the other six months of the year during the dry season, we need cheaper, second cheap option of generation. We need HFO 5 generation in Bushrod, installed in Bushrod in the capacity of close to about 80-90MW. Up until now, we only have funding available for 30MW of HFO power. So in total, we are talking about a gap, a funding gap of about $140M to $150M that is urgently required. The timing is crucial. It is required today. ISABEL>> I believe that money is never a problem. What is a problem is to have good projects. So with the help of Manitoba, if you can put in place a credible program of investment of the next five years, I want to believe that the funds are there. NARRATOR>> USAID is now testing a new method for supporting the Liberia Electricity Corporation. RADER>> Typically the way we do business is to work through intermediaries, either contractors or grantees. In this case, in accordance with the precepts of USAID Forward, is giving our money directly to LEC so there's no intermediary. MAYAH>> Utilities like LEC are not normally donor funded. But of course, realizing where Liberia comes from, it is no wonder it is happening that way. So to them we say thank you and we hope that in the future, as we come to the end of the donor cycle and now get into the normal cycle of moving the utility forward. I hope again we can meet at different levels to see what we can do in the future. So we say thank you for all the cooperation over the years.