Sierra Leone signs MoU for $750 million hydro power boost

The Bumbuna hydroelectric dam project is seen in this October 20, 2007 file photo. REUTERS/Katrina Manson/Files

FREETOWN (Reuters) - Sierra Leone announced on Thursday a planned expansion of the Bumbuna hydroelectric project that could more than quadruple the West African country’s generation capacity by 2017.

The government has signed a memorandum of understanding with Joule Africa, a member of the California-based Joule Investments Group, to add 350 Megawatts of generation capacity to the facility in the center of the country.

The deal is expected to cost $750 million, 75 percent financed by debt, the remainder by equity. It was announced by Sierra Leone’s Deputy Minister of Information Sheka Tarawalie said at a news conference in Freetown.

Nine years after the end of its civil war, Sierra Leone’s infrastructure remains weak and electricity supply a problem.

The country today has less than 100 MW of capacity -- one of the lowest levels even in sub-Saharan Africa.

The first stage of the Bumbuna hydroelectric facility on the Seli River came online in 2009 after a 30-year, war-disrupted gestation. That 50 MW initial stage already marked a significant improvement to the power situation in Sierra Leone, but demand still greatly outstrips supply across the country.

Even in the capital Freetown, grid power is highly erratic. A generator is a pre-requisite for ensuring a reliable energy supply, however, recently fuel prices jumped by 30 percent.

The second phase at Bumbuna will increase the facility’s total output to 400 MW. The project will include the construction of another reservoir to improve water supply to turbines during the dry season.

Reporting by Simon Akam; Editing by Mark John