LIBERIA: APPLICATION FOR OPIC FINANCE: BUCHANAN RENEWABLES

UNCLAS MONROVIA 000427

SENSITIVE
SIPDIS

PLEASE PASS OPIC FOR DIANA JENSEN
DEPARTMENT FOR AF/W


E.O. 12958: N/A
TAGS: EINV EFIN OPIC LI
SUBJECT: LIBERIA: APPLICATION FOR OPIC FINANCE: BUCHANAN RENEWABLES
FUEL LIBERIA, INC.

REF A) STATE 54384 B) Monrovia 139


1. (SBU) The possibility of electricity generated from abundant
locally-available fuel is tremendously appealing. The BRE/MacBain
team presents a compelling case, but there are some assumptions and
uncertainties that do not yet appear to have been resolved.


2. (SBU) Econoff participated in a February meeting between
President Sirleaf, her energy advisors, and members of the
BRE/MacBain team. At that time the outstanding issues were cost of
power, location of the proposed plant, and GOL ability to facilitate
land acquisition, confirm permitting and regulations, and secure
expeditious legislative approval, if required. We were told then
that there were five potential U.S. partners, including one who
already has extensive experience investing in Liberia. We were not
aware at the time that Mr. Steele, who was at that meeting
representing OPIC, was a potential partner.


3. (SBU) BRE pressed the GOL for a rapid commitment, saying they
needed to order $10 million in heavy equipment within 90 days (by
about May 1) in order to meet the project's ambitious deadlines (the
June OPIC board meeting, for a June 2010 completion date). BRE also
committed to providing firm cost and site data within 90 days.
(Note: We understand from a very recent discussion with Mr. Steele
that cost estimates are imminent, although we have not seen them,
and that three sites are being considered, none of them, he said,
ideal. End note.)


4. (SBU) Recent events that could impact the project: The GOL has
not made a commitment on an energy strategy. It seems likely this
project could be integrated with most future developments, but it
relies on and/or will affect completion of the EC-financed
transmission grid, continued improvement in the Liberia Electricity
Corporation's ability to administer and regulate the sector, and
other investment such as rehabilitation of the Mt. Coffee
hydroelectric plant. We are not in a position to confirm the
sponsor's assurances that the supply of rubber trees is adequate to
assure long-term supply for this project, BRE's commitments under
its wood chip export project, growing interest in rubber wood
exports and furniture building, and local requirements for charcoal.



5. (SBU) Participants that would cause the embassy not to support
the project: Mr. Steele has visited Monrovia several times in
conjunction with OPIC, and we were impressed with his knowledge of
the sector. We are not able to evaluate other participants. We are
not aware of ties to terrorism, money laundering, corruption, or
violations of law. The project participants seem to be placing a
high priority on social and environmental considerations.

BOOTH