The U.S. Government’s Millennium Challenge Corporation (MCC) has successfully concluded the latest of several visits to Sierra Leone to progress the design of a potential investment to support economic growth in Sierra Leone – called a compact.
During the visit to Freetown, MCC met with the private sector, government officials, representatives from all parties, and other development partners, particularly those interested in the energy sector.
The Government of Sierra Leone has requested MCC to design a potential compact – in coordination with the Sierra Leone Compact Development Unit (SLCDU) – that directly addresses the lack of affordable and reliable electricity among households, businesses, and social institutions.
“Now that the government of Sierra Leone has asked us to focus on the energy sector, we are grateful to have been able to travel to Freetown and meet with a wide variety of stakeholders with equities in this sector,” said Tina Yu, Country Director for the Sierra Leone Compact Team at MCC. “Our ongoing consultative process will ensure that the final compact is broadly inclusive and will benefit all Sierra Leoneans. I look forward to continuing these conversations as we progress our compact design process.”
Currently, only 26 per cent of Sierra Leone’s households are connected to an electrical grid, mostly in the capital Freetown, and unpredictable service blackouts force most firms to rely on costly diesel generators to support their operations. The lack of electricity also exacerbates Sierra Leone’s food insecurity crisis by limiting the presence of processing and storage technologies that use electricity, contributing to high rates of food loss and waste. The compact design process is analyzing how to address these challenges.
The MCC visit follows the recent allocation of almost $12 million by MCC to advance compact design. The new funds will finance critical feasibility studies to further develop and design the proposed Sierra Leone compact. The compact design process is an analytical, program-design process conducted in partnership with the Government of Sierra Leone to ensure projects are prepared in a comprehensive manner, reducing implementation risks.
MCC’s Board of Directors selected Sierra Leone as eligible to develop a compact in December 2020. The Government of Sierra Leone and MCC subsequently conducted a constraints analysis to assess the binding constraints to Sierra Leone’s economic growth, which identified the lack of reliable and affordable electricity as a key constraint. MCC and the Government of Sierra Leone are now working to further understand the constraint and its root causes and design meaningful interventions. Consultations with key stakeholders across Sierra Leone are critical to project design. As with all partner governments, MCC expects the Government of Sierra Leone to demonstrate its commitment to the principles that underpin eligibility for MCC funding throughout the life of the partnership – including ruling justly and democratic governance, investing in their people, and economic freedoms.
The new compact will follow a $44.4 million threshold program between MCC and the Government of Sierra Leone that concluded in March 20201. The threshold built a foundation of policy reform, sector coordination, and operational management to improve the water and electricity services in and around Freetown.
MCC is an international development agency of the U.S. government, working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants and assistance to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights.