Utility Management - Making a difference from the inside out

The Liberia Electricity Corporation (LEC) started the complex process of rebuilding its entire generating and network capacity following the challenges that have taken place over the last three decades. The LEC’s planning focus was “small light today big light tomorrow” (HE President Ellen Sirleaf Johnson). 

Donor institutions such as the World Bank, KFW, MCC, EIB, AfDB, USAid and Norway Fund saw the need to assist Liberia and provided over US$800m to rebuild the Mount Coffee Hydro Power Plant and all the necessary transmission and distribution infrastructure. 

However, improvements in infrastructure alone are not enough. The challenges from the late 1980s have led to extreme poverty with over half of Liberians living below the poverty line. That, coupled with the high cost of energy and inadequate distribution networks, has led to excessive and debilitating commercial losses in LEC. 

Solving commercial losses through the use of a silver bullet is naive; a deeper understanding of the root causes of these losses was needed with a sustainable programme that addressed more than just the symptoms. What was required was high-quality Utility Management expertise and to this end a Management Service Contract (MSC) was tendered to international parties, and in January 2018, ESB International assumed management control of LEC. 

Our Experience

ESB International has a long history of Utility Management experience. Since 1927, our parent company, ESB, has brought the transformative power of electricity to the cities, towns, villages, and the remote corners of Ireland.

This self-funded 30-year Rural Electrification programme brought electricity to the entire country. This transformation underpinned Ireland’s economic and social change from a largely underdeveloped rural nation to one of the most successful global economies enjoying the 2nd highest standard of living globally. The journey started with Ardnacrusha hydroelectric powerplant, which was completed in 1929 and still produces power today. The Liberian state recognised this long-term expertise and entrusted ESB International to manage their transition to recover and rebuild LEC into a functioning utility.

Changes made

ESB International mobilised a senior management team tasked to meet the challenges faced by LEC. 

• We engaged with the local management and staff to develop a vision for LEC. 
• We took control of all utility areas from Corporate-level, Major Projects, Planning, T&D and Commercial Operations, the management of HR, and Revenue Protection.
  
• We oversaw all donor-funded projects, including the operation of Mount Coffee HPP and the new 225kV Cote D’Ivoire, Liberia, Sierra Leone, and Guinea (CLSG) interconnector. 
  
• We provided training and development of local staff of all levels.
  
• We established a safety culture to ensure a safer and healthier working environment. 

We worked with local staff and managers to introduce industry best practice, including:

• Systems (IMS, DMS, CMS, ERP, ……) 
• Processes
• Governance
• Control 
• Oversight 

Reasons for success 

1. Not just a third party

On a personal note, as the CEO of LEC and a 37-year veteran of the utility business, experience has taught me that managing a utility through change is like ‘sky diving’. There is a significant difference between standing in a plane telling someone how it should be done and having the confidence to jump out with that person. This demands leadership, courage, confidence, openness and the sharing of knowledge, and above all describing our vision, beliefs and a shared sense of integrity.

Our team do not consider themselves as ‘just consultants’ and are not seen as such by stakeholders or donors; they are seen and thought of as the LEC management, which was always our aim. 

We are not just there to get the job done; we are there to make a difference.

We pride ourselves that our in-country team does what’s right for LEC first and always, even if it is not popular.

LEC is our company; we celebrate the successes and feel the pain of failure. 

2. Working with and for the community 

The team is driving the change to bring light and power to communities that have never had a structured, reliable electricity network. 

• We have replaced over 160 faulty transformers returning over 24MW of capacity, bringing light to and positively impacting the life of 80,000 people in the capital Monrovia. 
• As many connections were made last year as existed in 2018 - from 25,000 in 2018 to over 65,000 in 2020.
• LEC has continued to support growth in energy, growing from 133GWh in 2017 to 243GWh in 2020 and peak demand from 30MW to 47MW over the same period. 
• We are proud to have implemented a community outreach programme to engage with each community where we are replacing transformers to gain their support in protecting the assets against illegal connections and overload.

3. Technology and knowledge transfer 

We share our 94 years of utility management experience with Liberia, a country that was on the same energy path as Ireland; a country that was the envy of much of West Africa before the challenges of the last three decades.

For example, we are not just looking at the ‘here and now’; we are building a strategic plan for what is possible further down the road and mapping out the steps needed to get there. 

All LEC staff have received training and development relevant to their role and new responsibilities during our three-year tenure. 

We pride ourselves on transferring that depth of knowledge to the local community for future self-reliance. 

We engage local staff and managers in the decision-making process to build confidence, a team spirit, and an ability to make tough decisions both collectively and individually. 

4. Managing through Covid 

Despite the challenges imposed by the pandemic, we successfully achieved remote management of LEC during a 4-month temporary withdrawal from the country at the outbreak of Covid 19. 

• We developed a robust Pandemic Response Plan to ensure minimum disruption. A plan that has been now adopted by others. 
• Agreed our remote working and management proposal with the LEC Board, Government of Liberia (GOL), funders, and stakeholders. 
• Recorded zero fatalities and only three actual cases of Covid – they were professionally managed and contained the spread.
• The electricity service to Monrovia (the capital) was maintained. 
• Despite Covid/remote working, we still maintained complete operational and fiduciary control of LEC,….. a major concern of GOL and donors.

Our Achievements 

The overall achievement has been stabilising the business and reducing commercial losses in a challenging environment. Specifically:

• The development of a 5-year business recovery plan with donor-funded backing addressing some of the fundamental root causes.
• Successfully implementing an Integrated Management System (IMS), giving greater control and oversight. This is a significant feat for any utility, especially in a country whose economy is still recovering from the economic, and social hardships of the last 30 years.
• Reducing operating costs by approximately 14% and fuel costs by 17%. 
• Delivering a 4.5% reduction in commercial losses from year-end 2019 to year-end 2020. 
• Increasing generation availability which has improved finances and helped support a green agenda.
• Significantly reducing frequency and grid disturbances with a dramatic 50% reduction in blackouts.
• Stopping waste along with increased revenue growth and collection efficiency. 
• Improving customer services through training and establishment of new customer services centres. 
• Delivering tangible progress on donor projects, including 66kV networks, primary substations, and facilitating new customer connections in meaningful numbers. 

Through a pilot programme to introduce LEC funded High-Security Metering and the ‘normalisation of customer connections’, LEC and the country are now starting to see tangible benefits. This is a cultural and societal game-changer.

Where we are now

Despite the many challenges, LEC and ESB International are making a difference to Liberian communities. ESB core values of trust, care, drive and delivery are in evidence through professionalism, trusted leadership, good safety practices, technology transfer, the implementation of new systems, and setting sustainable business standards.

While undoubtedly financial support is critical, it is also vital to have growing capability and competencies on the ground to receive the funding and deliver meaningful results. Equally important is taking the time to truly understand the problem before developing the relevant and sustainable solutions that will ensure long-term success.