By Bill W. Coo per
The plenary of the House of Representatives has passed into law a Financing Agreement between the government of Liberia and the International Development Association (IDA) whose principal amount of the credit will be repaid in 38 years, pending concurrence by the Liberian Senate.
The Bill entitled a ‘West African Regional Energy Trade Development Policy Financing Program’ is a Grant and a Loan which shall be divided as follows, “An equivalent of US$9,200,000 for Special Drawing Rights (SDR) as Grant while an amount equivalent to US$9,200,000 is for Special Drawing Right (SDR) as Credit.”
In their report submitted to plenary on Friday, October 9, the House’s Committee on Ways, Means, Finance and Development Planning said that the financing agreement is consistent with the Amended and Restatement Public Financial Management Act of 2009, which was published in 2019 and as such, it was prudent enough that the House ratified the agreement for the very good of the country.
According to the committee, during its public hearing on the instrument, they engaged the Ministry of Finance and the implementing agency, the Ministry of Lands and Mines, the Ministry of Justice, and other knowledgeable actors on public financial management so as to validate the financial and legal consistency and sustainability of the Loan.
The House’s Ways, Means, Finance and Development Planning Committee added that at the end of the various consultative processes, they then considered some key elements of the Financing Agreement ranging that is aimed at supporting Liberia in financing part of the cost of activities related to the implementation of policies and reforms that the ECOWAS countries have determined key, for cementing the pillars of sustainable electricity trade.
Others are that the maximum commitment charge rate is one-half of one percent per annum on the un-withdrawn financing balance, as well as the service charge is three-fourth of one percent per annum on the withdrawn credit balance.
“That the payment dates are February 1 and August 1 in each year. The principal amount of the loan shall be paid on February 1 and August 1, commencing on August 1, 2026, to and including February 1, 2058,” the committee explained further in their report to plenary.
Recently, President George M. Weah submitted to the House of Representatives a Bill for the ratification of a Financing between the Government of Liberia and the International Development Association (IDA).
In his communication to that august body, the Liberian leader said that the Financing Agreement when ratified will help in enhancing the country’s electricity sector, indicating that the Agreement signed on August 7 and 19 of this year between the Government of Liberia and the IDA, is to provide financing for a program which supports the implementation of key reforms at the national level.
He added that it will also focus on regional integration with the objective of increasing regional electricity trade in West Africa; increase energy security, reduce vulnerability to international oil price fluctuations as well as reduce the fiscal burden of the electricity sector.