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Sierra Leone yet again endured prolonged blackouts after Turkish company Karpowership withdrew its operations in the country for several days over a $40m unpaid bill.
Sierra Leone yet again endured prolonged blackouts after Turkish company Karpowership withdrew its operations in the country for several days over a $40m unpaid bill. In the dry season when output from the hydroelectric power stations is low Karpowership is the country’s main source of grid electricity. The Karpowership first deployed a “power ship” – a floating gas-fired power station – under its latest five-year contract with the government, signed in 2020, supplies up to 65 MW of electricity to the country.
The costs of procuring electricity from Karpowership have caught up with Sierra Leone and its Electricity Distribution and Supply Authority (EDSA), the state-owned utility. Power outages have become increasingly common since late 2021 as EDSA’s arrears have accumulated. The exact terms of Sierra Leone’s contract with Karpowership have not been publicly disclosed, the World Bank described the supply of electricity from the company as “costly” in a report last year. Noting that the purchase price of electricity from Karpowership is indexed to global fuel prices, which significantly increased after the Russian invasion of Ukraine, the World Bank has advised Sierra Leone to invest in solar and hydropower generation as an alternative. It is estimated that the cost of electricity from Karpowership would be anywhere between 2.5 and 4 times greater than from new combined cycle power plants or wind or solar farms.
Sierra Leone’s options for settling its reported $40m bill appear limited in the short term, as a major economic crisis continues to bite. Its currency, the leone, lost 37% of its value against the US dollar between September 2022 and February 2023, while inflation is running at more than 40%.
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In June 2018, Karpowership signed a contract with Sierra Leone’s national utility company, EDSA, the Ministry of Energy (MOE), and the Ministry of Finance (MOF) to deploy a Powership to supply 30 MW. In 2018, an addendum agreement was signed to increase the capacity to 50 MW; in 2020 a third addendum was signed to increase the capacity to 65 MW. Karpowership has been operational in the country since 2018 and has been supplying 80% of Sierra Leone’s total electricity needs.
