Electricity is a crucial factor for growth. However, it remains a challenge due to the lack of affordable and reliable access. This affects households, businesses, and social institutions. The four main obstacles include an unreliable power supply, high electricity costs, limited access for productive use, and weaknesses in governance and institutional capacity within the power sector.

These challenges are rooted in insufficient and expensive generation sources, inadequate and vulnerable grid infrastructure, the need for technical capacity development in sector institutions, and the need for financial viability. Overcoming these obstacles is critical to fostering sustainable growth and attracting vital private-sector investment.

With a rapidly increasing demand for electricity and plans to increase household energy accessto 80% of the population by 2030, the Government of Sierra Leone (GoSL) has demonstrated a strong commitment to expanding the energy sector and facilitating private sector investment.

Legislative reforms have set the stage for restructuring the sector. In 2014, the Electricity and Water Regulatory Commission (EWRC) was created. In 2015, the former National Power Authority (NPA) was divided into the Electricity Generation and Transmission Company (EGTC) and the Electricity Distribution and Supply Authority (EDSA). Independent Power Producers (IPP) projects were also enabled as a result of these changes. The 2018 amendment further extended GoSL’s commitment to sector reform and increased private sector participation.

The Electricity and Water Regulatory Commission (EWRC) plays a pivotal role in overseeing the regulatory aspects of the energy sector and determining tariffs for both consumers and suppliers including EGTC) and IPPs. Meanwhile, the EGTC is dedicated to electricity generation and transmission. It is important to note that EDSA holds a monopoly as the sole provider to consumers.

In line with the 2018 amendments to the Electricity Act, EGTCs and IPPs now have the opportunity to forge supply contracts with eligible customers, including mining companies and other large-scale industrial and bulk energy consumers. The Ministry of Energy is committed to securing the long-term sustainability of the energy sector by refining the definition of eligible customers through further amendments to the Act, prescribing regulations, and offering clarity on who should supply to such customers.

A comprehensive investment strategy has given rise to the impactful Rural Renewable Energy Project (RREP). Through this initiative, three dynamic private sector companies oversee and maintain 95 mini grid systems, leveraging an impressive £10.8 million in private sector investment as part of a 2018 Public-Private Partnership (PPP) agreement with the government.

Sierra Leone’s energy sector stands to gain from the establishment of the West African Power Pool (WAPP), which will spur the creation of a regional electricity market. This will integrate the national power systems of its 14 member countries, fostering a common operating standard, rules, and a transparent and reliable mechanism for the settlement of power trade
transactions.

The TRANSCO- Côte d’Ivoire-Liberia-Sierra Leone-Guinea (CLSG) inter-connector – a landmark cross-border project involving the construction of a transmission line of over 1,300km, with the aim of interconnecting the CLSG countries’ energy systems into the WAPP regional energy network, is in place to facilitate this trade.

The Millennium Challenge Corporation (MCC) has played a crucial role in supporting Sierra Leone’s efforts to expand its energy sector, including the recent signing of the MCC Compact which aims to bring in $480M USD of grant funding to improve transmission and distribution networks.

Other private sector projects that are under development include Project NANT, a 108.4 MW LPG/LNG Fired Combined Cycle power generation plant financed by the United States International Development Finance Corporation
(DFC), Ecowas Bank for Investment and Development (EBID), and other lenders; Bekongor III – a 120 MW run of river hydro, and Betmai – a 25 MW run of river hydro. In addition, a total of 130 MW of private sector-funded solar
generation is either operational or under development.

Reasons to invest in Sierra Leone’s energy sector

Market demand

Reasons to invest in Sierra Leone’s energy sector Access rate doubled from 16% in 2018 to 36% in 2023. The government’s target is 70%, indicating significantly unmet demand. As the country develops and becomes progressively more
industrialised, the demand for energy in Sierra Leone will continue to increase at a dramatic rate.

Industrial power generation

Sierra Leone has unbundled power generation from transmission and distribution. Private
sector partners are being invited to participate in generation and metering projects. The Government is promoting energy investment at the company level as well. For example, mining companies are encouraged to work with private investors to meet their increased energy demands. The Renewable Energy Association of Sierra Leone is in place to help facilitate these
investments.

Renewable energy

A target of 85% renewable electricity capacity by 2035, presents significant investment opportunities. There are numerous waterfalls for hydropower and abundant sunlight for solar power generation with an estimated hydro
project potential of more than 1000 MW, while solar opportunities are above 240 MW. Wind power opportunities are being explored by UK power company – Octopus, which is working on Sierra Leone’s first windfarm on Sherbro Island.

Infrastructure investment

Sierra Leone has unbundled power generation from transmission and distribution. Private sector partners are being invited to participate in generation and metering projects.

Government commitment

GoSL is committed to enhancing economic growth and development by facilitating investment in renewable and clean sources of electricity and power.

Impact

Increasing affordable and reliable electricity access means that social services such as healthcare facilities and schools will lead to better health and educational outcomes.

Sierra Leone has a tropical climate with a wet season that typically runs from May to October. The average annual rainfall ranges from 5,000 mm in coastal Freetown to 2,500 mm in the northeast. This climatic pattern results in extensive groundwater networks, including rivers, lakes, springs, and relatively shallow water tables in most areas. In 2004, the total renewable water resources per person were estimated at 30,960 m3 per year. However, like many other Sub-Saharan African countries, access to improved water and sanitation services is limited, with access rates of 42% for water and 16% for sanitation services in 2022.

The Ministry of Water Resources and Sanitation (MWRS) is responsible for policy formulation and oversight of the sector. The Sierra Leone Electricity and Water Regulatory Commission (EWRC) handles economic regulation, while the National Water Resources Management Agency (NWRMA) oversees resource regulation. Service delivery is managed by the Guma Valley Water Company (GVWC) for the Western Area including Freetown, the Sierra Leone Water Company (SALWACO) for provincial cities and towns, and local district councils for rural areas. NGOs and small independent providers also offer some services.

Freetown and its environs Water supply Freetown, the capital city of Sierra Leone, is experiencing rapid population growth, with over 1.3 million residents and an expected doubling in size over the next 20 years. This growth haspresented challenges for GVWC. The existing Guma Dam and Water Treatment Plant, constructed in the 1950s-60s, is struggling to meet the current population’s water needs. Currently, only 38% of urban households have access to piped indoor drinking water, and 28% rely on publicly used facilities with water management committees. There is also a gender disparity, with women and children bearing the burden of water collection and often experiencing abuse in the process.

The water distribution network suffers from significant leakages due to ageing infrastructure and because the water pipes (many of which are exposed) are cut or tampered with by people attempting to access water, leading to leaking pipes and illegal connections. This results in an estimated 50% non-revenue water. Additionally, the current water catchment zones in the Western Area Protected Forest Reserve are under threat from erosion/degradation and inadequate land use management. The Guma Dam and Treatment Plant, with a reservoir capacity of 23.6 billion litres, stores 95% of the total water volume available to Freetown year-round. Water is supplied through a gravity-based system, with a treatment plant
design capacity of 86 million litres a day and an average production of 75 million litres a day.

Recognising the critical role of water security in driving social and economic progress, GVWC has formulated a robust water management strategy. This comprehensive approach aims to ensure a resilient water supply for Freetown and its
surrounding areas. It encompasses the development of a water masterplan based on an integrated urban water management approach, specifically tailored to address the escalating service needs of the city. Significant progress has already been made,
thanks to a £48 million investment that has brought about transformative changes in thewater system. This investment focused on rehabilitating key infrastructure such as the Guma dam, treatment plant, transmission, distribution, and pumping stations. Additionally, a $10 million project focused on capacity building to improve service provision and
enhance the commercial viability of the company. With the support of the African Development Bank and Ministry ofFinance, GVWC is actively mobilising approximately $204million in funding for the Freetown WASH and Aquatic Environment Revamping Programme tofinance water and sanitation, while ensuring the sustainability of the vital aquatic ecosystem in Freetown/Western Area.

Notably, 36% of this funding has been allocated to the implementation of the Angola Water Supply system, reservoir construction and rehabilitation works, expansion and rehabilitation of the Allentown Water treatment plant, refurbishment of booster pumping stations, a 45km extension of the distribution system, and the installation of 5,100 customer meters. Efforts made to improve revenue collection are bearing fruit as shown in the figure below:

Sanitation

Freetown faces significant sanitation challenges,but there are plans in place to address them. Aswell as uncontrolled urbanisation and a lack of urban planning, the city’s sewerage network is only about 4km long and in very poor condition.
Limited resources to establish and manage waste management infrastructure and services, and the historic absence of a citywide integrated solid and liquid waste management system with supporting infrastructure, are additional obstacles.
Presently, 90% of households in the city use onsite sanitation, and 50% of households share facilities, leading to an average of four households per latrine. About 355,312 tons of solid waste and 80,000 cubic meters of raw faecal sludge, are produced annually at a per capita rate of 0.5kg for solid waste, but only 21% and 23% of solid and faecal sludge are collected and disposed of at the city’s two official disposal sites, King Tom and Kissy Granville Brook. Regular flooding, landslides, combined with inadequate sanitation lead to related health problems such as malaria and cholera.

On-site sanitation works, Freetown and Western Area

To tackle these issues, a programme is being implemented to provide on-site sanitation, renew sewage pipes, and establish wastewater treatment plants, aiming to cover sanitation for over 160,000 households. This project is the first phase of a larger plan to improve sanitation and stormwater management in Freetown and the Western Area. Additionally, efforts are underway to address the limited resources for waste management infrastructure and services, and to establish a citywide integrated solid and liquid waste management system with supporting infrastructure.

Provincial cities

Water supply and sanitation

The Sierra Leone Water Company (SALWACO) has been a driving force since its establishment in 2001. Its mission is to provide essential water services to the four key regions of the country: North, North-West, East, and South, collectively
serving around 80% of the population.

Currently, the company delivers piped water supply services to 12 key provincial towns: Bo, Kenema, Makeni, Lungi, Kambia, Lunsar, Magburaka, Mile 91 & Yonibana, Port Loko, Kabala, Pujehun, and Kailahun. While access to basic water supply in areas outside Freetown and in rural communities currently stands at 53%, and access to basic sanitation is around 10%, SALWACO is committed to expanding and improving these vital services, to ensure a healthier and cleaner environment for all.

Reasons to invest in Sierra Leone’s water and sanitation sector

The Government of Sierra Leone recognises and is addressing the need for a stronger enabling environment for water-related investment.

Investment in water security generates substantial economic returns, advances gender equality and inclusion, saves lives, improves public health and increases productivity.

People and commercial enterprises in Sierra Leone are generally willing to pay for water services at levels even above the present tariff rates, provided the reliability of the services improves.

Sierra Leone is among the top 10 per cent of countries that are most vulnerable to the adverse consequences of climate change. Investing in water management and infrastructure can help reduce that vulnerability.

Businesses and livelihoods rely on the water sector, which presents opportunities for innovations that deliver smarter water
management.

Acting early provides the opportunity for greater impact and greater returns, because of the sector’s size and relatively few investors.