Hefty African Development Bank debts await gov’t

By Charles Lotara
The government of South Sudan owes the African Development Bank (AfDB) nearly $300 million in a loan acquired to facilitate the establishment of the Juba’s new power generation plant, the Africa Energy Series has revealed.
The Africa Energy Series report released Monday last week says the bank granted the government $290 million to finance the expansion and improvement of the 100MW electrification project undertaken by Ezra Group, a compound company founded in October 1986 in Ethiopia.
South Sudan has been given a 17-year timeline to pay back the loan, which has so funded less than half of the power generation project in a country where electricity demand is estimated at 300MW – much higher than the current capacity.
In 2017, the government officially initiated the building of the plant under a Public Private Partnership with Ezra Group, with the first phase of the plant coming online in December 2019, adding 33MW to the national grid.
However, only 100,000 households are meaning supplied, leaving a vast number of citizens without access to electricity before the completion of the project and its full operation scheduled to early next year.
Citizens have in recent days raised concerns over the pricing of electricity which has been pegged beyond the reach of low-income households.
“In 2014, the South Sudan Electricity Company (SSEC) changed the tariff system, which took the average rate from $0.22 per kWh to $0.36 per kWh. This adjustment’s main goal was to allow the business to run at break-even plus zero income,” read part of the report.
The tariff review did not work as anticipated after the economy took a nosedive, leading to currency devaluation. The South Sudan Electricity Company became incapacitated, unable to buy fuel, and replacement parts.
Implemented three years ago, the average tariff stands at $0.43 per kWh, higher than tariffs in all East African countries, especially in Kenya and Uganda where tariffs range between $0.24 per kWh to $0.35.
As of 2018, the estimated number of customers connected to the was 30,000, a miniscule share of the population in a country of over 10 million people.
The Ministry of Dams and Energy now intends to replicate the success of PPP in other cities across the country, which means at the moment, the vast majority of South Sudanese people do not have access to the national grid, having to rely on diesel generators to access power.
A member of OPEC+, South Sudan energy sector has been hard-hit by the negative impact of the coronavirus pandemic, which has slowed economic growth and revenue from oil exports.
South Sudan also offers opportunities in renewable energy and according to Africa Energy Series, the government has a plan to produce 10 to 40MW of power from renewable sources. With limited funding available from the government, the African Development Bank agreement to finance the project would mean the accumulation of more debts.
In a statement seen by The City Review, Minister of Petroleum Puot Kang Chol said “I vow to work tirelessly to return oil production to pre-conflict levels as soon as possible.”