With a GDP per capita of just EUR 1,371 Liberia is one of the world’s poorest countries. The country also suffers from low levels of installed generation capacity (155MW for a population of 4.8 million) and electricity access, which as of 2018 stood at only 26%. Liberia is also possessed of one of the most unconducive regulatory frameworks for pursuing SDG7 in Africa.
It is perhaps no surprise that Liberia has failed to attract significant private sector investment and has instead relied heavily on highly concessional donor support. In response to Liberia’s economic situation and to ensure that the government and electricity utility are not placed under any additional financial stresses, the entirety of European ODA commitments and 82% of disbursements to SDG7-compliant projects over the period 2014-2019 have taken the form of grants. The remaining 18% of disbursements over the period were in the form of concessional loans.
The transmission and distribution sector has been a key focus of European support, having accounted for 69% (EUR 98 million) of its ODA funding over the period under review, and equal to 52% of global ODA financial flows to the sector. This financial support has helped Liberia to significantly increase its electricity access rates from just 9.4% in 2014 to 25.9% by 2018.
Liberia is an example of the many LDCs across Africa which have a huge need for improvements to their electricity sectors – but have neither the capital available from local financial markets nor the enabling environment to attract foreign private investment. Donors play a key role in expanding generation, transmission and distribution capacity, and in providing policy support and capacity-building which should, if historical precedents set by other countries can be replicated across the continent, unlock the as-yet unavailable forms of finance necessary for achieving universal access to sustainable energy.