U.S. Envoy McCarthy Decries Power Theft in Liberia
On Thursday, August 26, 2021, U.S. Ambassador Michael McCarthy toured the Liberia Electricity Corporation’s (LEC) Bushrod Island facilities in order to better understand how U.S. assistance in the power sector has been used, and what the challenges are to the sector today. Earlier this year, the U.S. Embassy and Liberian Government officials celebrated the end of the Millennium Challenge Corporation Compact, a U.S.-funded, $257 million, 5-year effort, which was primarily focused on rehabilitation of the Mt. Coffee Hydropower Plant, the largest source of power in the country and Liberia’s most valuable fixed asset. During his visit, the Ambassador learned that commercial losses (theft and unpaid bills) account for over 50 percent of the electricity produced by LEC, seriously threatening the financial viability of the organization.
Ambassador McCarthy hosted a press conference at the U.S. Embassy in Monrovia following the visit. He noted that “I was both impressed and discouraged by what I saw and heard.” The LEC’s international management team has greatly improved LEC’s operational readiness and facilities. Even so, widespread power theft and unpaid power bills have placed LEC in a financial crisis from which it cannot recover without immediate intervention and support from the Liberian Government.
Ambassador McCarthy highlighted four main messages in a call-to-action for the Liberian people.
First, he emphasized that electricity generation, transmission, and distribution is very expensive. “Utilities around the world invest large sums in infrastructure, operations, and maintenance in order to ‘keep the lights on’—and they receive very low return on investment. Liberia’s power sector is no different, except that it is losing money every day.” He continued, “Nowhere in the world is electricity free. I pay an electric bill at my home in the United States. As Minister Tweah said last week, Liberia is no different: if you want electricity, you must pay for it. Nobody has ever promised free electricity to the people of Liberia.”
Second, Ambassador McCarthy pointed out that more than half of all electricity LEC generates is not paid for. He put it in clear terms: “Each connection that isn’t generating revenue is a step toward the collapse of the electric grid … About two-thirds of the electricity being generated by LEC does not result in revenue [due mostly to power theft]. Without that revenue, how can LEC fix the technical issues? How can they quickly respond to power interruptions? How can they continue to connect more of Liberia to the power grid?” He acknowledged that electricity is expensive in Liberia, but it will be difficult for that to change because “for each person that illegally connects to a power line, they are making everyone else underwrite the cost of power and making it harder to reduce the cost for those who do pay. They are also making all connections less reliable, which will lead to even more maintenance costs down the road. The only way to reduce the cost of electricity is for every LEC customer to be properly connected and to pay their electricity bills.”