Notice of Entering Into a Compact With the Republic of Sierra Leone, 80962-80963 [2024-22902]

Agencies

• Millennium Challenge Corporation

[Federal Register Volume 89, Number 193 (Friday, October 4, 2024)]
[Notices]
[Pages 80962-80963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22902]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 24-09]


Notice of Entering Into a Compact With the Republic of Sierra 
Leone

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: In accordance with the provisions of the Millennium Challenge 
Act of 2003, as amended, the Millennium Challenge Corporation (MCC) is 
publishing a summary of the Millennium Challenge Compact (Compact) 
between the United States of America and the Republic of Sierra Leone. 
Representatives of the United States of America and the Republic of 
Sierra Leone executed the Compact on September 27, 2024. The complete 
text of the Compact has been posted at: https://www.mcc.gov/resources/doc/compact-sierra-leone/.

(Authority: 22 U.S.C. 7709 (b)(3))

    Dated: September 30, 2024.
Peter E. Jaffe,
Vice President, General Counsel, and Corporate Secretary.

Summary of Sierra Leone Compact

Overview of MCC Sierra Leone Compact

    The Millennium Challenge Corporation (MCC), on behalf of the United 
States of America, has signed a five-year Compact with the Republic of 
Sierra Leone aimed at reducing poverty through economic growth. MCC 
funding of $480,669,000, together with a voluntary contribution of 
$14,200,000 from the Government of Sierra Leone, will support economic 
growth in Sierra Leone through investments in the energy sector to 
address the constraints of insufficient availability of affordable and 
reliable electricity. The Compact will address these constraints 
through three projects: (1) the Transmission Backbone Project; (2) the 
Distribution and Access Project; and (3) the Power Sector Reform 
Project.

Background and Context

    Sierra Leone's economy suffers from a power sector that cannot 
serve its existing customer base or keep up with future business and 
household demand. This is due to limited and high-cost supply, low 
capacity and poor reliability of the transmission and distribution 
networks, and the ineffectiveness of sector policies and institutions. 
These bottlenecks negatively impact current customers, most of whom are 
in the capital city, and prevent Sierra Leone from expanding 
electricity service to the 70% of the population without electricity. 
As the economy grows and the grid expands, load forecasts suggest 
demand will more than double by the end of the compact term.
    Meeting this demand will require large investments in foundational 
infrastructure and institutional capabilities. The need to 
simultaneously address multiple sector constraints, combined with the 
long lead times required to plan, finance, and construct large scale 
infrastructure, poses a major coordination challenge for public and 
private investment in the sector. This coordination challenge is 
magnified by the lack of capacity at sector institutions to reassess, 
update, and execute against sector planning documents--as well as 
sector wide issues with transparency and governance. As a result, much 
needed public and private investment is all too often delayed, 
withdrawn, or exceedingly costly due to the risks and uncertainties 
involved.
    Given this sector context, the Compact strengthens the foundations 
of a reliable electricity sector through investments in transmission 
and distribution infrastructure, development of a strong enabling 
environment for independent power producers, and substantial capacity 
building support for the utilities and key sector institutions.

Project Summaries

    The compact program consists of three projects:
    (1) The Transmission Backbone Project ($226,702,000) will expand 
Sierra Leone's transmission network to increase network coverage, 
increase the throughput capacity needed to evacuate increasing 
electricity supply, and increase reliability of service. With less than 
500 miles of transmission lines currently in Sierra Leone, the 
country's extremely limited grid means most citizens do not have access 
to power. This project connects a high-voltage West African Power Pool 
transmission line to the capital city. The project also builds and 
operationalizes a main and back up transmission dispatch center 
critical for network reliability and integration into the regional 
power marketplace. Technical assistance supports critical capacity 
development for the transmission utility in transmission operations and 
maintenance.
    (2) The Distribution and Access Project ($123,634,000) is designed 
to increase reliability of the grid, improve the financial viability of 
the distribution utility, and make strategic investments in connecting 
new customers to the grid and regularizing existing connections. This 
project refurbishes critical components of the distribution network in 
the capital city where 80% of power is consumed in Sierra Leone and 
reduces both technical and commercial losses through the provision of 
new meters and organizational change. Access investments include 
distribution line and substation expansion as well as direct 
connections to select end users, driven by socioeconomic data and 
planned transmission expansion. In addition, this project will involve 
the construction and operationalization of a main and a back-up 
distribution dispatch center to improve the Electricity Distribution 
and Supply Authority's operations and maintenance performance.

[[Page 80963]]

    (3) The Power Sector Reform Project ($50,490,000) is designed to 
improve sector financial sustainability, reduce the cost of service, 
and improve regulation by investing in priority sector reforms and 
capacity-building for key sector actors, including the utilities, 
regulator, and Ministry of Energy. The project includes embedded 
support to key sector institutions such as the regulator, the 
Electricity and Water Regulatory Commission, and the Ministry of Energy 
(especially its planning functions) to help them develop the 
capabilities needed to shepherd sector development over the coming 
decade. This support is intended to help Sierra Leone implement its 
Power Sector Reform Roadmap and Action Plan, including achieving 
improvements on key sector performance indicators targeting improved 
sector financial sustainability, reduced cost of service while 
fostering cost recovery for supplied electricity, and improved 
regulation. Additionally, this project seeks to spur private sector 
financed generation through project preparation support, transaction 
advisory services, and de-risking mechanisms.

Compact Budget

    The table below presents the overall compact budget of 
approximately $495 million, which includes MCC funding under the 
Compact of up to $480,669,000 and a voluntary Government of Sierra 
Leone contribution of $14,200,000.

------------------------------------------------------------------------
                        Component                             Amount
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1. Transmission Backbone Project........................    $226,702,000
    Activity 1.1: Transmission Dispatch Center..........      23,447,000
    Activity 1.2: Southern Transmission Corridor........     170,900,000
    Activity 1.3: Bumbuna-Freetown Line Upgrade.........      24,390,000
    Activity 1.4: EGTC Capacity Building................       7,965,000
2. Distribution and Access Project......................     123,634,000
    Activity 2.1: Distribution Dispatch Center..........      30,554,000
    Activity 2.2: Distribution Refurbishment............      44,335,000
    Activity 2.3: Access................................      26,850,000
    Activity 2.4: EDSA Capacity Building................      21,895,000
3. Power Sector Reform Project..........................      50,490,000
    Activity 3.1: MIAA..................................      25,250,000
    Activity 3.2: Financial Sustainability..............       8,300,000
    Activity 3.3: Policy & Planning.....................      10,420,000
    Activity 3.4: Cross-Cutting Capacity Activity.......       6,520,000
4. Monitoring and Evaluation............................       7,800,000
5. Program Administration and Oversight.................      72,043,000
                                                         ---------------
    Total MCC Compact Funding...........................     480,669,000
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Total MCC Compact Funding...............................     480,669,000
Government of Sierra Leone Contribution.................      14,200,000
                                                         ---------------
    Total Program Funding...............................     494,869,000
------------------------------------------------------------------------

[FR Doc. 2024-22902 Filed 10-3-24; 8:45 am]
BILLING CODE 9211-03-P