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On Thursday, August 26, 2021, U.S. Ambassador Michael McCarthy visited the Liberia Electric Power Company (LEC) Bush Rhode Island facility to better understand how the U.S. uses power sector assistance and the challenges that the sector faces today. Earlier this year, the U.S. Embassy and Liberian government officials celebrated the end of the Millennium Challenge Corporation contract, a five-year project funded by the United States at a cost of 257 million U.S. dollars and focused on the restoration of the largest coffee mountain hydroelectric power station. . The country’s power source and Liberia’s most valuable fixed asset. During the visit, the ambassador learned that business losses (theft and unpaid bills) accounted for more than 50% of the electricity produced by LEC, which seriously threatened the organization's financial viability.

After the visit, Ambassador McCarthy held a press conference at the US Embassy in Monrovia. He pointed out, “I am both impressed and frustrated by what I have seen and heard.” LEC's international management team has greatly improved LEC's operational preparation and facilities. Even so, widespread electricity theft and unpaid electricity bills have plunged LEC into a financial crisis, and it cannot recover from it without the immediate intervention and support of the Liberian government.

Ambassador McCarthy emphasized four main messages in the call to action of the people of Liberia.

First, he emphasized that power generation, transmission and distribution are very expensive. "Utilities around the world have invested a lot of money in infrastructure, operations and maintenance to'keep up normal operations'-but the return on investment they get is very low. The power sector in Liberia is no exception, just Loss." He continued: "No place in the world is free. I pay for electricity at my home in the United States. As Minister Tweah said last week, Liberia is no exception: if you want electricity, you have to pay. Never No one promised to provide free electricity to the people of Liberia."

Secondly, Ambassador McCarthy pointed out that more than half of all electricity generated by LEC is not paid for. He made it clear: "Every connection that does not generate revenue is a step towards the collapse of the grid... About two-thirds of the electricity generated by LEC did not generate revenue [mainly because of power theft]. Without this revenue, How does LEC solve technical problems? How do they respond quickly to power outages? How can they continue to connect more areas of Liberia to the grid?" He admitted that electricity bills in Liberia are expensive, but this situation is difficult to change because "for illegal connections to power lines For everyone, they are making others bear the cost of electricity and making it more difficult to reduce costs. Those who pay. They also reduce the reliability of all connections, which will lead to higher subsequent maintenance costs. Reduced The only way to cost electricity is to get each LEC customer to connect correctly and pay the electricity bill."

Third, the ambassador asked all Liberians to do their part to ensure that LEC can continue to provide electricity: "Now and here, I call on every electricity user in Liberia to pay the bill so that the electricity sector can survive here." He pointed out that there is no The culprit is individuals and some big users who are obviously using their political connections to prevent payments from stealing power. The Liberian government must do a lot to solve this problem. problem. "It is not enough to say that the situation of electricity theft is complicated or difficult to solve. To protect our investment and your future, and to put Liberia on the path of opportunity, we need to see action-paying electricity bills, prosecuting, convicting ——We need to see huge judgments and fines for electricity theft. This needs to become a systemic focus. Without the support of the highest level of the Liberian government and the strong response of the entire judicial system, nothing will improve. In In his speech to power Heping Island, President Weah also called for the same."

Finally, Ambassador McCarthy asked the Liberian government and the Liberian people to take power theft more seriously. "There is so much investment in the power sector here. It is not too much for the U.S. government to ask the Liberian government to take more measures to protect our investment and our own power sector. Multiple sources tell us that there is a well-organized power theft cartel. , Benefiting close companies and even government officials. We know that some LEC investigators trying to solve this problem have been harassed by some self-proclaimed security officials. This is absolutely unacceptable. As a major investor in the Liberian power sector, we call on Government officials do everything possible to stop this corruption and prosecute the perpetrators, no matter how important they are."

Solving and combating corruption is the top priority of the Biden-Harris administration, which has elevated corruption to the core issue of US national security, and today the US Embassy in Monrovia is taking action on this priority. President Biden said in a White House statement: “Corruption erodes the foundations of a democratic society. It reduces the efficiency of government, wastes public resources, and increases inequality in access to services, making it more difficult for families to feed their loved ones. Corruption. Attacking the foundation of the democratic system, promoting and intensifying extremism, making it easier for authoritarian regimes to corrupt democratic governance. Corruption poses a threat to our national security, and we must recognize this."

The United States and Liberia have a long and lasting relationship. As Ambassador McCarthy pointed out in his speech, "We plan to maintain this relationship... Liberians sometimes call the United States their big brother, but because we are 245 years old. And you are 174 years old. I prefer the idea that we are old partners. We are not perfect. Sometimes, true partners need to deliver a strong message. This is why we are here today. Corruption hinders progress, and We are building the future together."

Ambassador McCarthy's complete speech

Thank you everyone for joining us today.

I just finished visiting the facilities of the Liberia Power Company in Bushrod Island. To be honest, I was impressed and frustrated by what I saw and heard.

LEC's international management has greatly improved LEC's operational preparations and facilities. They are supported by donor funds and have the ability to provide Liberians with electricity on a consistent basis. Donors such as the United States and the European Union have contributed to more than 15,000 new connections in the past three years, and plan to connect another 160,000 homes and businesses in the next two years.

But as we all know, for most Liberians, a reliable and stable power supply is not a reality.

Earlier this year, we just celebrated the end of the millennium challenge company contract and the full restoration of the coffee mountain dam. The compact is a $257 million, five-year effort to support the development of Liberia, especially its power sector. Our goal in this endeavor, and every endeavor we do here, is to support the people of Liberia—everyone in every county, not just people living in Monrovia, but also It's not just elites or people in government.

Now, imagine me, the European Union and other donor countries — and my colleagues in Washington, D.C. — continue to see concerns about problems in the power sector so soon after investing hundreds of millions of dollars — if not more — In the development of the industry.

The first major message I want to convey to you and all Liberians-our visit to LEC's Bushrod plant today further strengthens this message-that power generation, transmission and distribution are very expensive. Utilities around the world have invested a lot of money in infrastructure, operations, and maintenance to "keep things up and running"-but their return on investment is very low. The power sector in Liberia is no exception, but it is losing money every day.

Take the coffee mountain dam, the largest source of electricity in Liberia, as an example. Through the Millennium Challenge Pact, the American people provided more than 150 million U.S. dollars to repair the power plant. That is a grant; this is not a loan. This is a gift that Liberia will never have to repay. In order to invest in Liberia’s future, funds must be provided for sustainable and proper maintenance. The lack of commitment will result in the need for more funds to restart and rebuild the hydropower station, and there is no guarantee of the source of funds.

In addition to capital investment, the cost of operating a power company is also very high. LEC needs employees, engineers, and customer service representatives. It needs facilities like the one we visited today. It requires wires, poles, trucks, and meters to ensure that the generated electricity reaches your home and can be used safely. All of this requires money.

Nowhere in the world is free. I pay for electricity at my home in the United States. As Minister Tweah said last week, Liberia is no exception: if you want electricity, you have to pay. No one has ever promised to provide free electricity to the people of Liberia.

This brings me to my second message: more than half of all electricity generated by LEC is not paid. Every connection that does not generate revenue is a step towards the collapse of the grid.

I want you to look at this chart.

You are looking at the total electricity supply that has been steadily increasing since 2015. Now, green is the amount of electricity that LEC customers sell and pay for correctly. Gold is the amount of electricity lost due to unpaid connections (commercial and household) or technical issues.

As you can see, about two-thirds of the electricity generated by LEC does not generate revenue. Without this income, how can LEC solve technical problems? How do they respond quickly to power outages? How can they continue to connect more of Liberia to the grid?

LEC is a public, government-owned utility company that regularly generates reports on the status of operations. LEC revealed in its latest report that its bill has not been updated for many years. This is not because it has been wasting money. I believe that the current international management team has been operating LEC as professionally and efficiently as possible, and it was only recently that the Millennium Challenge Company paid for it. The reality is that no utility company anywhere in the world can survive with less than half of its electricity payment. LEC is no exception. If LEC cannot solve this electricity theft problem, it will continue to weaken financially, become more dependent on government funds, and reduce the reliability of operations. This in turn will have a serious impact on the country’s economic development, which, like any other country, relies on reliable electricity to attract new investment and develop its economy. This is the severity of what we are facing.

I know that electricity bills in Liberia are very expensive. In 2020, Liberians will pay 49 cents per kilowatt-hour for electricity. In comparison, Americans spend about 13 cents. The salary of the French is about the same as that of the Americans. Ghanaians spend an average of 6 cents; Guineans pay an average of 10 cents; and Ivorians spend an average of 12 cents. Why do Liberians pay four to five times the cost of less reliable electricity?

The answer is because for everyone who is illegally connected to the power line, they are making others bear the cost of electricity and making it harder for those who pay to reduce the cost. They also reduce the reliability of all connections, which will lead to higher subsequent maintenance costs. The only way to reduce electricity costs is for each LEC customer to connect correctly and pay the electricity bill.

This brings me to my third message: here and now, I call on every electricity user in Liberia to pay the bill so that the electricity sector can survive here. Today, we will distribute the LEC mid-year briefing to everyone present for your reference.

As you will see, the first culprit here is those companies that illegally connect to power in Liberia. Companies use the most electricity, and those companies that fail to pay LEC correctly for the electricity they use face the risk of complete power outages and the risk that their own companies may shut down.

The second culprit is the individual who has established an illegal connection with his or her home. If you are not using a connection to a meter legally installed by an LEC employee, then you should be partially responsible for this situation. When you lose power and cannot run a fan or charge your phone, you lose the right to complain.

The third problem area-I can hardly say this-is the Government of Liberia. The Liberian government is the largest customer of LEC Power and often defaults on payments. In addition, there have been zero cases of companies and individuals convicted of power theft-and more than one. Considering the breadth of the problem, how is this possible?

It is not enough to say that the situation of power theft is complicated or difficult to solve. In order to protect our investment and your future, and to put Liberia on the path of opportunity, we need to see action — paying electricity bills, prosecuting, convicting — we need to see massive sentences and fines for electricity theft. This needs to be a systemic focus-without the support of the highest level of the Liberian government and the entire judicial system responds strongly, nothing will improve. President Weah also called for the same in his speech to commemorate the power supply of Peace Island.

This is the fourth message I give you today: I ask the Liberian government and people to take electricity theft more seriously. With so much investment in the power sector here, it is not excessive for the US government to ask the Liberian government to take more measures to protect our investment and our own power sector. Multiple sources have told us that there is a well-organized electricity stealing cartel that benefits close companies and even government officials. We know that some LEC investigators trying to solve this problem have been harassed by some self-proclaimed security officials. This is absolutely unacceptable. As a major investor in the power sector in Liberia, we call on government officials to do everything possible to stop this corruption and prosecute the perpetrators, no matter how important they are.

All in all, in the past five years alone, LEC has lost $220 million due to technical and business losses and unpaid bills. This money could have been used to increase the grid and provide electricity for everyone.

In other words, those who steal from LEC are not robbing wealthy companies, they are stealing from the pro-poor agenda.

So why does the American ambassador want to share this information with you today? We care about the development of Liberia and its people. Corruption and power theft hinder this development.

Over the past ten years, the United States and donors have spent more than $1 billion on Liberia's energy sector—this is $1 billion with a "B". That is the money of American taxpayers. Every American you see in Minnesota, Georgia, and Texas is their hard-earned money invested in your development. How can we continue to justify this generosity when more than half of the electricity generated by the system is allowed to be stolen without any consequences?

Solving and combating corruption is the top priority of the Biden-Harris administration, and we are taking action in accordance with this priority. In June, President Biden listed corruption as a core national security interest of the United States. In a White House statement, he said: “Corruption erodes the foundations of a democratic society. It reduces the efficiency of government, wastes public resources, and increases inequality in access to services, making it more difficult for families to feed their loved ones. Corruption attacks. The foundation of a democratic system promotes and intensifies extremism, making it easier for authoritarian regimes to corrupt democratic governance. Corruption poses a threat to our national security, and we must recognize this."

A few weeks ago, President Biden announced the Democracy Summit, which will bring together mature and emerging democracies, civil society, and the private sector in December. The three main themes are to oppose authoritarianism, promote respect for human rights in our country and abroad, and of course combat corruption. Liberia is fortunate to be the oldest republic on the African continent, with a sound democratic system. Therefore, today we are focused on combating widespread corruption, respecting the rule of law, respecting everyone and gaining opportunities for everyone.

The United States and Liberia have a long-lasting relationship, and we plan to maintain this relationship. Liberians sometimes call the United States their big brother, but since we are 245 years old and you are 174 years old, I prefer the idea that we are old partners. We are not perfect. Sometimes, a true partner needs to deliver a strong message. This is why we are here today. Corruption hinders progress, and we work together to build the future.

Going back to the Coffee Mountain Dam, it was built with the help of the United States in the 1960s. After the terrible civil war in Liberia, we and other donors repaired this power plant, making it the incredible generator it is today. Today, Coffee Mountain is the most valuable fixed asset in the country. We want to help you keep the lights bright, business operations, school openings and clinics open. We think the Liberians also want the same. But this requires that every Liberian, from the government to every one of you, is committed to fighting corruption that steals power. We urge you to do the right thing.

By the U.S. Delegation to Liberia | August 26, 2021 | Category: Ambassador, News, Press Release

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