22 November 2013, Monrovia – The Arab Bank for Economic Development in Africa (BADEA) has come to the rescue of Liberia, loaning the sum of US$12 million to Liberia to finance the Bushrod Power Generation Expansion Project, and by extension, to provide affordable power to the people of Liberia.
Deputy Minister of Finance for Expenditure and Debt Management, Angela Cassell-Bush, who travelled with President Sirleaf to Kuwait, signed on behalf of the Liberian Government, while the Director General of BADEA, Mr. Abdelaziz Khelef, signed for his institution.
Madam Cassell-Bush thanked the Director General and BADEA for being so generous in extending this loan facility to Liberia, which she said will go towards the financing of the Bushrod Power Generation Expansion Project.
The project aims to reduce the power deficit in the country and ensure reliable power supply to residential, commercial, industrial areas, health centers, government centers, schools and other institutions in and around the capital, Monrovia, she said.
“This will help to improve the socio-economic development status of the people, reduce poverty and create jobs,” an Executive Mansion statement from Kuwait quoted her as saying.
Deputy Minister Cassell-Bush recalled that after the HIPC Completion Point, Liberia, through the generosity of its bilateral and multilateral partners, including BADEA, had much of its debt waived while a small portion was restructured.
“As a forward-looking measure, a Public Financial Management Law is now in place, as well as other guidelines, such as the Debt Management Strategy, for prudent practices in the management of debt for the establishment of a good and sustained macroeconomic environment,” she indicated.
Although the amount of the loan may seem small, compared to the nation’s infrastructure needs, the Deputy Minister said it will be a great help for a country impacted by the setbacks of civil conflict. She requested greater collaboration and partnership with BADEA and other Arab bloc partners, to finance prioritized Liberian Government projects. She assured the Director General of Liberia’s commitment to ensure that the loan will be executed in line with the terms and conditions of the agreement.
In his response, Director General Khelef expressed his gratitude for the opportunity for BADEA to participate in financing the Bushrod Power Generation Expansion Project, pointing out that this new agreement is actually an extension of other relationships that exist between BADEA and Liberia. The Bank, he said, was aware of Liberia’s recent history, when it went through difficult times, and BADEA was pleased to participate in additional projects in Liberia.
According to Director General Khelef, the project will consists of four major components: civil works, involving work on the foundation for the diesel units; transformers, fuel tankers and the power house; the supply and erection of 2X5 MW HFO generator sets, electromechanical equipment and auxiliaries, including spare parts and maintenance tools; and provision for the training of operators on plant operation, among other activities.
According to the term of the agreement, the loan period will last for 30 years while repayment starts in 20 years as grace period with 10 years interest Rate at 1% per annum.
“The loan does not carry commitment and administrative charges. Furthermore, if repayments are effected within 30 days of their due dates, the interest rate will be reduced by 0.25%,” the statement said.
Mr. Khelef also disclosed that BADEA will collaborate with the Saudi Fund and the European Investment Bank to finance the rehabilitation project of the Roberts International Airport – another priority project for the Government of Liberia.