PPAs, TSAs Crucial for CLSG Project Implementation

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The General Manager of TRANSCO CLSG, Mohammed M. Sherif has underscored the significance of the Power Purchase Agreement and the Transmission Service Agreement as condition for the company’s viability. He said the signing of these agreements is so significant for the CLSG project implementation.

Mr. Sherif emphasized that TRANSCO CLSG has been mandated to implement the CLSG project and that in order to make the company viable and put it in the position to pay back all the loans, there should be trade through a Commercial framework, which will serve as the basis of this trade.

He told authorities in Liberia, Sierra Leone and Guinea at the just concluded Commercial Framework meetings held in those countries to discuss and validate the Power Purchase Agreement (PPA) and the Transmission Service Agreements (TSA), that the signing of these agreements is a crucial condition for disbursement of fund by the donors.

“Without completing this process, we cannot receive any funding for the CLSG project,” he cautioned.

Mr. Sherif informed the authorities including representatives from the Ministries of Energy, Finance and Development Planning and national utilities that TRANSCO CLSG is almost completing the bidding process.

“We are at the stage now that our bidding is way advanced. In the month or two, we will begin to sign contracts with the contractors, but we have to pay advances to these contractors. If we cannot complete this process, the donors will not disburse the fund and the contractors will not commence work and if they can’t, then the project will not go forward. And then we have no CLSG project.”

The stage is very high, he stressed and urged the relevant stakeholders to ensure the signing of these crucial agreements. “It is in our own interest that we move this process forward and ultimately we can have a successful project implementation and completion.”

Mr. Sherif said the PPA and the TSA process is a product of relentless effort of the relevant stakeholders. “We all came together over the course of two years to discuss, agree and endorsed the Term Sheets as well as the Master Form contract.”

According to him, a significant part of the agreement has been endorsed by all parties and it’s a question of validating them and discuss the price mechanism.

He furthered explained that the Côte d’Ivoire, Liberia, Sierra Leone and Guinea (CLSG) electricity networks interconnection project involves the construction of a 1,357-km-long double circuit high voltage (225 kV) line to connect the national networks of the four countries. The construction of this 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.

The General Manager said the project will help establish a dynamic electric power market in the West African sub-region and secure power supply for participating countries which have a comparative advantage in importing power rather than producing it at high costs using their national systems. The project will be implemented over the 2014-2017 period.

The direct beneficiaries of the project are the residents of its impact area (24 million inhabitants) who will have reliable electric power at competitive cost. The project will raise the average electricity access rate in the four countries. The increased electricity access will generally contribute to improving the welfare of the beneficiaries and lead to the development of social and income-generating activities.

The General Manager also explained the essence of the Commercial Framework meetings. He said the power purchase agreement (PPA), or electricity power agreement, is a contract between two parties, one which generates electricity (Cote d’Ivoire) and one which is looking to purchase electricity (the CLSG). The Transmission Service Agreement (TSA) Agreement is an agreement between the CLSG country utilities and the TRANSCO CLSG, which owns the 1,303km line from Cote d’Ivoire linking Liberia, Sierra Leone and Guinea.

Mr. Sherif led a senior level delegation to these meetings which commenced on May 2, 2016 in Monrovia, Liberia. The delegation traveled to Sierra Leone on Tuesday, May 3, 2016 and later to Guinea on May 9, 2016. The General Manager was accompanied by the Director of Finance and Administration, Jigba Yilla, the Director of Project Implementation Unit, Etienne Baily and the Communication Officer, Sidiki Trawally.

For a successful outcome of these meetings, the TRANSCO CLSG management team collaborated with the Ministry of Energy of each country. Representatives from the Ministries of Energy, Finance and the National utility of each CLSG county adopted the Term Sheets in December 2014 followed by another meeting in January 2015 at which time they approved the Master form contracts of the Power Purchase Agreements (PPAs) and the Transmission Service Agreements (TSAs).

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