The CLSG Interconnector project involves constructing a 1,357 km transmission line allowing power exports initially from Ivory Coast to Liberia, Sierra Leone, and Guinea. The interconnector aims to create incentives to explore the hydropower potential in Sierra Leone and Guinea which, if realised, would provide all the countries with an increased supply of electricity to meet growing demand. Approximately 12.5% of the total project cost will finance rural electrification.
The upfront subsidy of maximum EUR 12.5 million will limit the financial risk of the project in the early years of operation, by reducing the costs of the Special Purpose Company during this ramp-up period. Indeed, the financial projections for the project show that lower than expected trading in the early years of operation of the line would generate insufficient revenue from transmission tariffs, which have to remain affordable, to cover all costs incurred. The upfront subsidy would apply during the first three years of operation.