Finance Minister Samuel Tweah has described ArcelorMittal’s 800 Million agreement as a good deal that will help the Government of Liberia (GOL) to transform the energy sector.
Tweah said the government’s agreement with ArcelorMittal is a “significant improvement to an existing contract” that will enable the company to contribute to the shared cost of energy.
Minister Tweah told a team of journalists in Monrovia that ArcelorMittal and other concessions have agreed to use the Côte d’Ivoire, Liberia, Sierra Leone, and Guinea (CLSG) power supply, which will make a substantial contribution to the cost of electricity.
The CLSG electricity networks interconnection project is constructing a 1,357-km-long double circuit high voltage (225 kV) line to connect the national networks of the four countries.
“ArcelorMittal is coming to help us with the CLSG line, and without ArcelorMittal using the line the government alone will not be able to afford the US$48 million annually,” Minister Tweah stated.
He continued that when connected to the CLSG line, AML could absorb about US$10 million of the US$48 million, while other companies like Bea Mountain could pay up to US$5 million, which can help the government in a great way.
Annually, Liberia is expected to pay about US$48 million to utilize 60 megawatts of CLSG power supply for stable electricity in and across Liberia.
Minister Tweah added that the “ArcelorMittal deal is a good deal in the sense that it is an improvement in the existing contract”.
According to the Minister of Finance and Development Planning, the people of Grand Bassa, Nimba and Bong counties need more from ArcelorMittal, and the government and the company have agreed to do more.
It is crucial, according to him, for the National Legislature to pass the agreement so that ArcelorMittal can expand its mining operations by building a massive processing plant in Nimba, which will require an enormous power supply from the CLSG line and help the government shoulder energy cost.
He warned that, for the next 9 years, no other company will be able to use the Buchanan-Yekepa railway if the Legislature fails to pass the Arcelormittal MDA before it; arguing that the agreement was well negotiated by some of the best experts in the sector.
He noted, “ArcelorMittal has exclusive right over the rail in the current agreement, and for the next nine years, no one else will be able to use it. For the government to bring anyone else to use the rail, according to the current agreement, ArcelorMittal has to agree. That’s what is in the law.”
At the same time, Minister Tweah said that Liberia must handle the new ArcelorMittal agreement with care, noting that if the Legislature refuses to pass the amended agreement which is before them, the company could ask for an extension after its remaining nine years.
If the government refuses this extension, the company he said could sue Liberia on account that “it has its investment here” and cannot be denied investment.
Minister Tweah underscored that the government’s agreement with AML calls for a multi-user arrangement as opposed to the ongoing MDA, which did not anticipate multiuser possibility.
Liberia’s connection to the CLSG line, Minister Tweah believes, is one of the “best and only way” available to solve the country’s electricity nightmare at the moment.
The construction of this power line is part of the backbone of the Mano River Union countries and the priority projects of the West African Power Pool (WAPP) Master Plan.
According to the African Development Bank (AfDB), the CLSG line will help establish a dynamic electric power market in the West African sub-region and secure power supply for participating countries that have a comparative advantage in importing power, rather than producing it at high costs using their national systems.
The project, estimated at an overall cost of US$331.51 million, net of taxes, has been implemented since 2014. The contribution of the Bank Group (ADF, FSF, and NTF) amounts to US$128.15 million (or 38.66% of the total cost).