DALLAS, TEXAS – The U.S. International Development Finance Corporation''s (DFC) Deputy Chief Executive Officer (DCEO) Nisha Biswal and Chief Minister of Sierra Leone David Moinina Sengeh today announced up to $412 million in financing and political risk insurance in support of the country''s plans to address rolling blackouts and expand its power system through renewable energy solutions in the future.
DFC approved a new loan of up to $292 million to the Freetown-based Western Area Power Generation Project to help develop and upgrade the power plant''s infrastructure, promoting reliable access to power throughout Sierra Leone. DFC will also provide up to $120 million in political risk insurance to crowd-in private investment. The financing package is bolstered by a $40 million loan from ECOWAS Bank for Investment and Development (EBID).
"Sierra Leone''s vision for a sustainable energy future is becoming a reality," said DCEO Biswal. "DFC is proud to support the country''s first, large, utility-scale, independent power project and lay the foundation for reliable and affordable electricity in Sierra Leone."
Project sponsors Milele Energy and TCQ Power are developing the project – the first utility-scale, independent power project in Sierra Leone, which will be constructed by Shapoorji Pallonji with gas and steam turbine equipment as well as long-term servicing, and operation and maintenance from Siemens Energy. The project will become Sierra Leone''s main source of power generation upon completion.
The Chief Minister of the Government of Sierra Leone said, "The Government of Sierra Leone is committed to providing reliable, clean, affordable, and sustainable energy solutions to support our national development efforts. We are happy to do so via innovative public and private sector programs like this one that prioritize impact. We will provide all the requisite support for this partnership."
U.S. Ambassador to Sierra Leone Bryan David Hunt said, "The Western Area Power Generation Project is poised to revolutionize Sierra Leone''s energy landscape, bringing opportunity to communities across the nation. Its impact will be profound, fueling progress, prosperity, and a brighter future for all Sierra Leoneans. The United States is proud to support this private sector initiative."
"The unwavering commitment shown by DFC and EBID to ensure that this transformational project is realized will improve the lives of millions of Sierra Leoneans," said Milele Energy CEO Erik Granskog. "Milele Energy is dedicated to unlocking some of Africa''s most critical energy projects and we applaud the Government of Sierra Leone to conclude this project that will lower cost, improve reliability, and allow for the expansion of industrial demand."
"We are immensely grateful for this support from DFC and EBID that enables this next stage of development. It demonstrates their belief in, and commitment to, the people of Sierra Leone," said TCQ Power Limited CEO Karim Nasser. "We also extend our profound gratitude to His Excellency President Maada Bio for his steadfast support over the years. We are committed to delivering this sustainable power solution to the people of Sierra Leone and look forward to executing on the next steps and construction."
The U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, infrastructure, agriculture, and small business and financial services. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.
TCQ Power is a turnkey power project developer with a focus on early conceptualization tailored towards the MENA markets. Through strong cooperation with local governments and suppliers, TCQ Power aspires to mitigate risks at an early stage of development prior to breaking ground, thus lending credibility to sustainable, long-term, independent projects that are fully operable assets by the host nations at the time of handover.
The funding, unlocked by the passing of the Bipartisan Infrastructure Law in late 2021, will be administered by the US$20 billion US Department of Energy (DOE) Office of Clean Energy Demonstrations, which was opened as part of the landmark legislation.
The DOE announced yesterday that energy storage technologies offering between 10 and 24-hours storage duration will be eligible for a slice of the US$349 million total. Up to 11 demonstration projects will be selected that have the potential to move the needle towards the Department''s long-term goal of reducing the cost of LDES by 90%.
"Advancing energy storage technologies is key to making energy generated from clean renewable resources—like wind and solar—available for 24/7 use, and is critical to achieving a decarbonised power grid and reaching President Biden''s ambitious climate goals," US Secretary of Energy Jennifer Granholm said.
"DOE is taking huge steps to lower the cost and increase the duration of energy storage technologies so that clean, reliable, affordable electricity is available whenever and wherever to everyone, especially Americans living in remote and underserved communities."
As the penetration of renewable energy on the US grid grows, so too does the need for energy storage to balance out peaks and troughs in demand and production. The duration requirement of that storage also grows at higher percentages of renewables.
Lithium-ion batteries commonly used for grid storage are typically considered more cost-effective for durations of up to 4 hours. Although some recent projects announced will see 6- and even 8-hour lithium-ion systems deployed, the energy industry seeks viable alternatives for technologies that can offer scalable long-duration storage for several hours, overnight use, or in some cases even longer.
The state of California recently just paid out US$31 million funding for a hybrid microgrid using vanadium redox flow battery and zinc hybrid cathode battery technology, which is the first project to get funded from a US$380 million pot.
It has been a strategic aim of the US government to reduce the cost of long-duration storage even during the term of Donald Trump as president, with the Energy Storage Grand Challenge competitive funding opportunity launched during his tenure.
However, as with other clean energy efforts, long-duration energy storage market seeding activity has stepped up since Joe Biden took office, with the DOE funding a new US$75 million centre for LDES research at Pacific Northwest National Laboratory (PNNL).
Biden described the pair as the greatest steps taken to fight climate change in US history, with the IRA offering incentives for downstream deployment of solar PV, wind and batteries, and the Bipartisan Infrastructure Law offering incentives and stimulus to the upstream, supply side of the clean energy sector.
Other Bipartisan Infrastructure Law initiatives underway include a US$335 million programme to support battery recycling and US$675 million funding for critical minerals R&D. A total of about US$7 billion support for domestic electric vehicle (EV) and stationary energy storage battery value chains will be paid out through the law.
Energy-Storage.news’ publisher Solar Media will host the 5th Energy Storage Summit USA, 28-29 March 2023 in Austin, Texas.Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.
The tender pertains to finding an EPC for phase 1 of the project. USTDA is currently supporting the development of phase 1 and the launch of phase 2 with a grant which will fund a feasibility study – currently being carried out by Power Engineers Incorporated – to assess the technical, financial and economic viability of the project.
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