West Africa Rising: Can big infrastructure projects help Sierra Leone lure investors?
At an investment conference in the capital city of Freetown last week, President Ernest Bai Koroma described his hopes to build a massive new bridge, new airport, and new city in the sleepy village of Lungi.
Freetown, Sierra Leone — • West Africa Rising is a weekly look at business, investment, and development trends.
In a bid to lure investors to this poor but growing West African nation, the president of Sierra Leone has vowed to rehabilitate one of the country’s greatest economic weaknesses: its flimsy infrastructure.
At an investment conference in the capital city of Freetown last week, President Ernest Bai Koroma described his hopes to build a massive new bridge, new airport, and new city in Lungi, a sleepy village that’s separated from Freetown by a nine-mile-wide bay.
Sierra Leone’s only international airport – an aging structure that includes the country’s lone paved runway – is already located in Lungi. But to get there from the capital, visitors must travel either by boat or helicopter. To go by car involves a bumpy ride of four or five hours.
“This country must no longer allow the state of our airport to deter investors and visitors,” Mr. Koroma told an investors conference in Freetown last week. “We must no longer allow ourselves to be offering apologies to our visitors for the difficult time they have crossing over from Lungi.”
Off-the-cuff estimates of the cost of such a mammoth project range from $900 million to $5 billion, but no one knows for sure. Koroma told the conference on Thursday that “a number of conglomerates” had expressed interest in the investment, but so far no contracts have been signed.
“It’s all pretty speculative,” says one diplomatic official, who notes that there have long been separate rumors that the government would abandon the airport in Lungi and build one in Hastings, which is on the Freetown side of the bay. “For now it’s all talk, but we’ll see what happens,” he says.
While plans for the bridge to Lungi are still up in the air, the government is already moving ahead on another infrastructure project: improving the country’s electricity supply.
Apart from the diesel-chugging generators that can be heard rumbling throughout Freetown, Sierra Leone currently has a single sole source of electricity: the Bumbuna hydropower dam, which came online in 2009. But even at the height of the rainy season, the dam generates less than 100 megawatts of electricity, making Sierra Leone one of the least-electrified countries in West Africa.
The lack of a robust power supply is a major drag on investment, as any businesses that operate in the country have to set aside hefty sums to buy fuel for their generators. It also renders impossible any major refining or processing plants, which would require substantially more electricity than the country produces.
But Koroma, who will be up for re-election next year, says that boosting the country’s electricity supply is one of his top priorities. Earlier this month, his administration signed a memorandum of understanding with Joule Africa, a branch of the California-based Joule Investments Group. The company plans to build a hydropower station that would triple the country’s current electricity supply, bringing total capacity to 400 megawatts.
But businesses in Freetown shouldn’t sell their generators just yet. The company will conduct feasibility studies over the next two years, Joule Africa’s press officer Patrick Beckley said in an e-mail. They hope that the project, which should cost somewhere in the region of $750 million, will be commissioned by 2017.