Liberia is slowly recovering from the war that ravaged the country between 1989 and 2003. Since the end of the war the economy has grown at an annual rate of 6%, but the country still has a GDP of only $495 per capita. Liberia has possibly the lowest electrification rate (2%) and the highest energy tariffs ($534 per MWh) in the world.
Before the war the country had an installed capacity of 191MW, comprised of a 64MW large-hydro plant at Mount Coffee and heavy fuel oil (HFO) and diesel generators. By the end of the war this capacity was almost entirely destroyed. The Liberia Electricity Corporation (LEC), the integrated national utility, has an installed capacity of only 27MW, most of which is based on HFO generation. A donor-funded project to rehabilitate Mount Coffee Hydro station suffered delays due to the outbreak of the Ebola virus. If the disease’s remission is maintained, the Mount Coffee project is expected to be completed by the end of 2016.
Liberia aims to increase the electrification rate to 30% by 2030. The Electricity Master Plan of 2012 estimates that peak demand will grow from 8MW in 2012 to 94MW in 2018, and 202MW in 2030. Actual needs could be considerably higher when the major iron ore projects promoted by ArcelorMittal and China Union materialize. Much of this capacity could come from hydro and other renewable sources or imports. The estimated total hydro potential is 2,300MW, including numerous small hydropower sites with a combined total capacity of 86MW. While the country is not yet connected to the West African Power Pool, a project to link Guinea, Sierra Leone, Liberia and Ivory Coast was approved in 2013 and is expected to be completed by 2017.
The 2009 National Energy Policy set the target of 30% renewable power generation by 2015. The tax code grants a range of benefits to renewable energy projects, including exemption from import duties for capital goods, exemption from property taxes, tax deductions of up to 30% of the purchase price of equipment and the possibility to carry forward tax losses over five years. The Rural and Renewable Energy Agency (RREA) was established in 2010 with the mission of promoting renewable energies and rural electrification.
The national utility, LEC, has a de-facto monopoly on generation, transmission and distribution under the law that created it in 1973. The company signed a management contract with Manitoba Hydro International in 2010 and in 2013 extended it until the end of 2016. The Liberia Accelerated Electricity Expansion Project funded by the World Bank and running until 2018 is expected to support the Ministry of Lands, Mines and Energy of Liberia (MLME) to develop and establish a framework for private sector participation in electricity generation.
Liberia’s only operating clean energy project is a 4MW small hydro project at the Firestone rubber plantation. Development funds have made possible the rehabilitation of the 60kW Yandohun micro hydro plant and the installation of several distributed solar systems. A sizeable investment to build a 35MW biomass plant was announced by Buchanan Renewables in 2008 with the backing of OPIC, the US export credit agency. The company signed a framework agreement with the government of Liberia in 2009, but the project was abandoned in 2013.
Score Summary
Liberia scored 0.91 in Climatescope 2015, placing it 35th on the list of countries overall, the same position it occupied in 2014. Its highest score by far was on Enabling Framework Parameter I.
Nevertheless, the country dropped four places on Parameter I to rank 12th. It scored highly for the relative price attractiveness of clean energy as well as market size expectations, as well as for policies related to energy access.
On Clean Energy Investment and Climate Financing Parameter II, Liberia was placed 31st. Its score was boosted by the size of investments in previous years relative to its small economy, but weakened by the absence of new investment.
Liberia ranked 40th overall on Low-Carbon Business & Clean Energy Value Chains Parameter III, with few value chain companies or service providers present.
On Greenhouse Gas Management Activities Parameter IV, the country ranked a very poor 54th, above only Haiti.