UNDERSTANDING MINI-GRID TARIFFS IN SIERRA LEONE

The report finds that mini-grid tariffs in Sierra Leone (USD 0.74–0.82/kWh) are significantly higher than subsidized tariffs in Nigeria (as low as USD 0.30/kWh). The primary cost drivers in Sierra Leone are return on investment (37%) and plant operating and maintenance costs (33%). Key recommendations include extending license periods from 20 to 25 years to lower depreciation, excluding unutilized capacity from tariffs to avoid transferring market risk to consumers, and implementing bulk procurement of equipment to achieve economies of scale.

• Mini-grid tariffs in Sierra Leone for 2020–2021 ranged between USD 0.74 and USD 0.82/kWh, which is higher than the subsidized range in Nigeria that starts at USD 0.30/kWh.
• The two most significant contributors to the mini-grid tariff cost buildup in Sierra Leone are the return on investment, accounting for 37 percent, and direct plant operating and maintenance costs, accounting for 33 percent.
• Unutilized capacity is identified as a major factor contributing to high tariffs in Sierra Leone because the current tariff model charges this idle capacity to existing customers, effectively transferring market risk to the consumer.
• The current 20-year license period in Sierra Leone increases tariffs by compressing the depreciation period; extending this to 25 years would reduce the depreciation charge without affecting returns on investment.
• While subsidies have been provided through the Rural Renewable Energy Project (RREP) and the Universal Energy Facility (UEF), relying on them alone is unsustainable; the report suggests an upfront consensus on affordable tariffs and the use of 'smart subsidies' to cover the gap between affordable and cost-reflective rates.
• The Multi-Year Tariff Order (MYTO) tool used in Sierra Leone is technically sound in its calculations but is difficult for inexperienced users to review and lacks mechanisms to adjust for inflation and currency depreciation.

APA

Sustainable Energy for All (n.d.). UNDERSTANDING MINI-GRID TARIFFS IN SIERRA LEONE. https://www.seforall.org/system/files/2023-11/sierra-leone-tariffs-report-web.pdf

Chicago

Sustainable Energy for All. UNDERSTANDING MINI-GRID TARIFFS IN SIERRA LEONE. n.d. https://www.seforall.org/system/files/2023-11/sierra-leone-tariffs-report-web.pdf.

Wikipedia

{{cite report |author=Sustainable Energy for All |title=UNDERSTANDING MINI-GRID TARIFFS IN SIERRA LEONE |url=https://www.seforall.org/system/files/2023-11/sierra-leone-tariffs-report-web.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sustainableenergyforallndunderstanding, author = {{Sustainable Energy for All}}, title = {{UNDERSTANDING MINI-GRID TARIFFS IN SIERRA LEONE}}, institution = {Sustainable Energy for All}, url = {https://www.seforall.org/system/files/2023-11/sierra-leone-tariffs-report-web.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }