Liberia - Recommended technical assistance projects

Joint UNDP/World Bank Energy Sector Management Assistance Program Activity Completion Report No. 038/85 : ;~~~~~~~3 Country: LIBERIA Activity: RECO*NDED TECHNICAL ASSISTANCE PROJECTS JUNE 1985 Report of the Joint UNDP/Vbild Bank Energy Sector Management Assistance Program This document has a restricted distribution. Its contents may not be discosed without authorization from the Government, the UNDP or the World Bank.  EWRUY SECTOR MAN& 'lME.T ASSISTANCE ROCRA4M The Joint UNDP/World Bank Energy Sector Management Assistance Program (ESMAP), started in April 1983, assists countries in implementing the main investmeat and policy recommendations of the Energy Sector Assessment Reports produced under another Joint UNDP/World Bank Program. ESMAP provides staff and consultant assistance in formulating and justifying priority pre-investment and investment projects and in providing management, institutional and policy support. The reports produced under this Pnagram provide governments, donors and potential investors with the information needed to speed up project preparation and implementatlon. ESMAP activities can be classified broadly into three g8'oups: - Energy Assessment Status Reports: these evaluate achieve- ments In the year following issuance of the original assessment report and point out where urgent action is still needed; - Project Formulation and Justification: work designed to accelerate the preparation and implementation of investment projects; and I - Institutional and Policy Support: this work' also frequently leads to the identification of technical assistance packages. The Program aims to supplement, advance and strengthen the impact of bilateral and multilateral resources already available for technical assistance in the energy sector. %unding of the Program The Program is a major international effort and, while the core finance has been provided by the UNDP and the World Bank, important financial contributions to the Program have also been made by a number of bilateral agencies. Countries which have now made or pledged initial contributions to the programs through the UNDP Energy Account, or through other cost-sharing arrangements with UNDP, are the Netherlands, Sweden, Australia, Switzerland, Finland, United Kingdom, Denmark, Norway, and New Zealand. Further Information For further information on the Program or to obtain copies of completed ESMAP reports, which are listed at the end of this document, please contact: Division for Global and OR Energy Assessments Division Interregional Projects Energy Department United Nations Development World Bank P-ogram 1818 R Street, N.W. One United Nations Plaza. Washington, D.C. 20433 New York, N.Y. 10017  I I LIBERIA RECOMMENDED TECHNICAL ASSISTANCE PROJECTS JUNE 1985  TABLE OF CONTENTS I. INTRODUCTION .............................................. 1 II. TERMS OF REFERENCE FOR POWER EFFICIENCY AUDIT/LEC ........, 4 c ~~~~~Objective......... . .... .0.......... 400* 4 Scope .. ..... 4 Procedures...... 4 ..... . ... . .............. 4 Reprin. p o r t i ng*o.0~ 00w.. .... ..... 5 Criteria....*S.. . ***,~** 009 *0*... 7 Staffing and Work Program ........ ..... . , 7 Cost of the Work Program... 7 III. TERMS OF REFERENCE FOR BONG MI:;E-LEC POWER EXCHANGE CAPACITY REV EW*..,, V.................. 8 Background and Objectives.*.i..... 8 Scope of Wor' ...... 8 Organizatiot. and Timing. ,........................ 9 IV. TERMS OF REFERENCE TO DEFINE A PROGRAM OF IMPROVED EFFICIENCY IN THE USE OF RUBBER WOOD AND NATURAL FOREST TO PRODUCE FIREWOOD AND CHARCOAL ...................0 11 Background and Objectives............................... 11 Scope of Wr ........................... 12 Rubber Wood Resource Definition......................... 12 Expansion of Demonstration and Field Trials Project for Portable Metal Kilns....................., 13 Charcoal Export Feasibility Study....................... 13 Organization and Timing.....0. .......................... 14 V. TERMS OF REFERENCE FOR PRE-INVESTMENT ANALYSIS FOR ORE DRYING WITH FUELWOOD .................................. 16 Backgrouno and Objectives .............................. 16 Scope of Work..... ........... @ 16 Organization and ...................................... 17 VI. TERMS OF REFERENCE FOR PROVISION OF TWO (2) FULL-TIME ENERGY PLANNING PRFESSIONALS.......... 18 Bakron #c k. g r o u n d$* *..0 I. 01 8 Scope of Work.......... . , . ...... 18 Organization and Timing.... 19  I. INTRODUCTION 1.1 An Energy Assessment mission visited Liberia in February 1984 as a part of the joint UNDP/World Bank Energy Assessment program. The Energy Assessment report from that mission, issued in December 1984, pointed out the decline in the Liberian economy since 1979 and the uncer- tain prospects for future economic growth. The impact of lessened demand for Liberia's export products has been magnified by poor management of the economy and of the major stats owned enterprises. Both major energy parastatals, the Liberia Electricity Corporation (LEC) and the Liberia Petroleum Refinery Corporation (LPRC), are now threatened with severe liquidity problems.. Three major recommendations were made in the Energy Assessment report to- redress the most serious. problems facing the Liberian energy sector: restore the financial viability and thereby strengthen the functions of both LEC and LPRC; maximize the service- ability and productivity of installed energy productiot, storage, and handling capacity in the petroleum and power sectors; and optimize the exploitation and replenishment of the presently abundant woodfuel resources. The mission also pointed out the need for strengthening the overall energy planning function within the GOL. 1.2 The Energy Assessment report identified the following acti- vities of highest priority within each subsector which require technical assistance: Petroleum (a) The design, costing and anking of priorities in terms of reducing operational cost and improving efficiency of investments required to trinsfer the petroleum depot from the refinery to the Water Front area, and to rehabilitate and reconfigure storage and handling facilities. (b) The procurement of management services to establish and operate the proposed new Petroleum Supply Company for three years and to liquidate the assets of the LPRC. The new Petroleum Supply Company should be set up as a private venture which would provide this expertise at its own cost for its own benefit. Power (c) A power system efficier,cy audit to define the investments which are economically justified in distribution and generation rehabilitation and to review the serviceability of all thermal generating plant. (d) The procurement of management services to manage and implement reforms in the LEC, including supervision of remetering, dis- tribution rehabilitation, reorganization of accounting, edtab- lishment of effective management information and decision-  making systems and high-level management training and develop- ment. (e) A review of the Bong Mine-LEC power exchange capacity to deter- mine the present level Lt which power can be sent in both directions, and the transformer capacity, prot6ction gear and other facilities required to facilitate transfer up to 40 MW. Household Energy (f) An inventory of rubber wood and other forest energy resources be taken within reach of Monrovia and other urban centres. (g) An expanded demonstration and field testing prj ect for simpli- fied metal charcoal kilns. (h) A charcoal export feasibility study which would also define the prospects for managing the Cape Mount State forests as a sus- tainable charcoal resource. Industry (i) A pre-investment analysis of fuelwood supply and conversion for ore drying at the Bong Mining Company. Energy Planning (j) The provision of two (2) full-time energy planning profes- sionals. 1.3 In Octobe/November 1984, a follow-up mission under the Energy Sector Management Assistance Program (ESMAP) confirmed the priority and i,portance of all of the above projects. ItZems (a), (b), and (d) of the above list were deemed sufficiently critical that they have beer recom- mended for inclusion in the Public Sector Management Technical Assistance Project and the Second Petroleum Technical Assistance Project to be funded under an International Development Association (IDA) credit if private sector invol4ement cannot be arranged; hence, the detailed terms of reference (TOR) have not been included in this report for those items. Detailed TOR's for the balance of the above items are presented in the following section. 1.4 There are a number of donors participating or who have ex- pressed some interest in providing technical assistance to the Liberian energy sector. The GOL and the World Bank agreed that preparation of this report would be an effective method of articulating the priority needs of the Liberian energy sector for the donor community. The TOR's presented in this report will be circulated among potentiai donors. One or more of the recommended projects will also be considered for funding by ESMAP. The cost and estimated duration of the proposed projects are as follows:  Project Cost Duration (US$) (Months) 1. Power Efficiency Audit 75*000 4 2. BMC-LEC Power Exchange Review 30,000 2 3. Improved Efficiency in Use of Rubber Wood and Natural Forest Resources 280,000 6 Task 1. Resource Survey 1OO,00O 6 Task 2. Demonstration and Field Trials 80,000 6 Task 3. Export feasibility Study 100,000 6 4. BMC Ore Drying Fuelwood 50,000 3 Conversion 5. Provision of 2 Full-time Energy Planning Professionals 500,000 2 (years)  -4- II* TERMS OF REFEENCE FOR POWER EPFICIENCY AUDIT/LEC z ective 2.1 The objective of the power efficiency audit is to define measures to implement cost effective modifications to system facilities, operations, and construction standards that will improve the technical 9 efficiency of the power system and reduce non-technical losses. Scope 2.2 The audit will include a representative survey of LEC generat- ing facilities, sample diagnostic studies of transmission and distribu- tion circuits, a critical analysis of distribution system standards and practices, and a review of customer service activities including meter- ing, billing, and collettion. In-depth studies of such areas as manage- ment and organization, staffing, financial and accounting procedures and tariffs are outside the scope of the audit except to the extent that the audit findings lead to recommendations for further studies or improve- ments in such areas. Procedures 2.3 To assess the overall efficiency and capability of the entity, a series of short interviews would be held with members of senior manage- ment at LEC. This would show management's policy towards, and goals for, loss reduction. The information obtained on the principaL ongoing prob- lems would indicate the location and distribution of technical/non-tech- nical losses, and what steps had been or could be taken to reduce losses. 2.4 The distribution system would be examined through discussions with appropriate staff and site visits to substations, distribution work- shops and other facilities. Available statistics on system performance would be analyzed. 2.5 An assessment of the operating efficiency of thermal generation plants would be made by site visits and inspection of the equipment and through discussions and examination of plant and other records. 2.6 The information obtained from the above would be analyzed to identify areas where losses could be reduced or more detailed study would be justified and where changes or additions should be made to design criteria and operating and maintenance procedures. The procedure for implementing these recommendations would be outlined.  -5- Reporting 2.7 The results of the audit should be presented in a concise re- * port. The recommendations should differentiate between short term and long term projects. 2.8 The first phase of short term preliminary loss reduction proj- ects would outline immediate steps to be taken to improve the most urgent problems regarding losses in the transmission, distribution and generation systems. The projects would cover a two- or three-year period and each would be described and given a justification and approximate cost estimate. When required, a scope of wor\ or terms of reference would be provided to facilitate the contracting of consulting, engineering or other services or the implementation of the activities recommended under the project. The short term project would be described in suitable terms for presentation for financing by a development bank or similar agency. These projects would include the following items, where appropliate: Transmission and Distribution (a) design criteria and construction standards; (b) system planning methods and procedures; (c) system operations and maintenance; Cd) service outages and their causes; (e) voltage control and monitoring procedures; (f) ecohomic system load control and management methods; (g) transmission and distribution circuit analysis using computer- based programs and the data base for this analysis; (h) metering systems, operation, maintenance, testing, instal- lations and service standards; (i) meter reading, billing, collectioa, and monitoring procedures; (j) transformer specifications and load management; (k). system and circuit power factor measurement and corrective measures;  -6- (1) system technical loss assessment, value of losses and estimate of loss reduction potential; (m) review of non-technical losses and measures to control them; (n) construction methods, standards, equipment and precedures; Get ration (o) The diesel engines, gas turbines, generators, and auxiliaries would be examined in detail to identify areas where rehabili- tation was needed or where improvements in efficienc- could be achieved. The firm capacity of the thermal generation facil- ities will be defined as the baseline production facilities of the LEC system. The following items would be included where appropriate: - the scope for taking advantage of advances in technology by retrofitting more efficient parts; - the adequacy and condition of manual and automatic controls; - maintenance programs, procedures and effectiveness and spare parts stocks; - efficiency of plant operations; - fuel quality control; - the need for training programs to improve efficiency in transmission, distribution and generating systems will be assessed. (p) A similar examination would be made for hydroelectric plants, where appropriate. This would include, for example, but not be limited to: - an investigation of possible efficiency improvements from replacement of turbine runners; - cleaning of penstock and trash racks. 2.9 The long term projects would take the form of a long term power plant and distribution system betterment and expansion program covering a period of about five years after the preliminary project. This program would be given a general description, a preliminary cost estimate and be defined objectively to specify desired results, criteria and approach.  -7- Criteria 2.10 System tong-run marginal costs (LRMC) will be used for valuing efficiency improvement benefits. These costs will be expressed in terms of capacity savings ($/kw) and energy savings ($/kWh) at each principal voltage level. Costs and benefits will be further. disaggregated accord- ing to time-of-day and season when appropriate and feasible. The present value of life-cycle costing shall be used for all analyses using appro- priate opportunity costs (10% for capital unless otherwise specified). Transmission and distribution facilities will be studied by appropriate sampling techniques using micro-processor computer programs or equivalent methodologies (programmable calculators). Staffing and Work Program 2.11 The audit will be performed by experienced engineers. The field study should take ode month, which would allow sufficient time for each major generating plant survey and for review of transmission and distribution systems. Total effort, including report preparation and travel, should not exceed four months. The cooperating entities will provide data, office space, local transportation and counterpart staff for the duration of the survey. Cost of the Wor'k Program 2.12 The total cost for completing the audit will be $75,000, including all contractor/consultant time, travel and per diem, and report preparation. .  III. TERMS OF REFEMRNCE FOR BONG MINE-LEC POWZER EHrANGE CAPACITY REVIEW Backiround and Objectives 3.1 Electricity is supplied from the Liberian Electricity Corpor- ation (LEC) to Bong Mining Co. (BMC) during the wet season from surplu3 hydro output, while BMC supplies LEC during the dry season from slow speed heavy os.l diesel generation. At no time do BMC's generators operate in synchrony with LEC generators. The load that can be trans- ferred is limited to 2x10 MVA -- the rating of the BMC transformers -- although the transmission line might be capable of 40 MW. The dis- advantage of the present arrangement is that the amount of energy that can be transferred in either direction depends ultimately on the demand of that part of the system linked with the other at any particular time, and this can be varied only by switching consumer groups in or out, probably in fairly large blocks. When LEC supplies BMC with surplus hydro output, additional transfer potential is wasted. BMC has a substantial reserve capacity of at least 30 MW that is unused even at full load during the dry season. Since the supply from LEC arrives at 8MC at the end of 50 km of 69 kv transmission line, the increase in fault capacity, if LEC is synchronized even with part of BMC's plant, may be within the breaking capacity of the switch gear. It is apparent that BMC does not wish to lose output as a result of irregularities on the LEC system. However, there are several benefits of operating the LEC system- in parallel with one of the BMC sections, as follows: (a) increased operational flexibility for LEC, and the ability to make the maximum possible use of hydro capacity, with a corres- ponding saving in fuel imports; (b) BMC would be able to supply the small and relatively short period peak loads of LEC's demand in the wet season, eliminat- ing the need to start up less efficient LEC thermal machines to meet these loads; (c) it should be possible to minimize the number of thermal units in use at any time during the dry season; and (d) it is clearly the least-cost solution for LEC capacity addition for the near term. Scope of Work 3.2 The objective of the following scope of work is to evaluate the potential and define a program that would allow the above benefits to be achieved. Since BMC is most sensitive to being exposed to faults  -9- generated by LEC's operatioa, all work done under the proposed terms of reference will have to be conducted with the BMC's knowledge and scru- tiny. The focus on 8MC's thermal units is a function of both unused capacity and, more importantly, the probability that the BMC thermal units are the most efficient units in Liberia. This study is warranted even considering the possibility that BMC might cease mining operations in the near future. LEC should consider taking over operations of the more efficient BMC power plant as an alternative capacity replacement/addition to its own less efficient thermal hardware, if BMC ceases operations in the near term. 3.3 The consultant(s) shall perform the following tasks at a minimum to define the potential of and implementation steps for parallel operation between BMC and LEC, with a transfer in either direction of 30- 40 MW: (a) prepare load profiles for both systems for potential supply transfer; (b) evaluate the condition of the transmission line and the trans- former capacity, making appropriate hardware additions and/or upgrading recommendations; (c) prepare specifications for switch gear and protective relays (under-frequency and/or under-voltage) that will isolate a fault on either system before BMC's breakers are required to deal with a fault level beyond their capacity; (d) define all steps for both LEC and BMC to achieve safe and efficient parallel operations; and (e) prepare schedule and budget estimates for implementation if an expanded power transfer agreement can be endorsed by both LEC and BMC. Organization and Timing 3.4 The LEC will be the local agency r;esponsible for organization and overall local coordination of the work. The LEC will coordinate the work as required, with BMC, and provide office space, supplies, local transportation, and secretarial services, as needed. 3.5 The work will be completed by the consultant(s) over a 2-month period with up to 4 weeks spent in the field. The total cost is esti- mated at $30,000 including consultant time (3 man-months), travel and per diem, and report preparation. 3.6 The consultant's final report will address the specific terms of reference and discuss activities undertaken, problems encountered, and  -10- proposals for their resolution. The report will include a record of expenditures, time spent, meetings held, and visits undertaken. The final report will be submitted to the COL and the sponsoring/implementing institution. .  - % ~~~~~~- 11 - IV. TERMS OF REFURENCE TO DEFINE A PROCRAN OF IMPROVED EFFICIEnCY IN THE USE OF RUBBER WOOD AND NATURAL FOREST TO PRODUCE FIREWOOD AND CHARCOAL Background and Objectives r 4.1 While Liberia is more heavily forested than most other coun- tries in West Africa, deforestation is responsible for the loss of 188,000 ha of forest each year. The current annual rate of biomass loss through forest clearing is estimated to be 24 million m . The 1983 total household consum.ption of firewood and charcoy l (reported in terms of wood feedstock) is estimated to be 4.2 million m and is projected to rise to 5.9 million m3 in 1993. From the data presented it can be deduced that a national supply crisis is not likely to occur; however, the supply-demand relationship between Monrovia, as the major user, and its hinterland does suggest future regional imbalances. 4.2 Of the fuelwood and charcoal used in Monrovia, most of the fuelwood comes from rubber wood, while only 20% of the charcoal supplied during the dry season and 30% of the charcoal supplied during the wet season is made with rubber wood. The charcoal producers favor the hardwoods from native forests. The utilization of this natural forest resource for char soal making is estimated to be only 40% of the standing biomass of 250 mJ per hectare actually converted. The natural forest within a 50 mile radius of Monrovia has been depleted, which has lead to apparent environmental problems and resource depletion, and charcoal now comes from 70 miles from the forests of Crand Bassa and Cape Mount counties. Continuation of this trend will also substantially raise the real price of charcoal in the Monrovia marketplace over the next decade. 4.3 It is possible that significant benefits can be obtained in the near term by increasing the utilization of retired rubber trees which are reasonably close to Monrovia. If all of the concession rubber planta- tions are included, about 75,000 ha of rubber trees are readily acces- sible to Monrovia. The 10-y3ear sustainable harvest of retired trees could amount to 1.2 million m per year from this 75,000 ha base. Even * counting all of the concession's own use of fuelwood, the potential resource available could supply all, of Monrovia's fuelwood and charcoal requirements, thereby relieving pressure on the native forests. It could also provide the proper financial incentives to motivate replanting with either rubber or fuelwood species as their value as a cash crop is demon- strated. Any expanded use of wood in the Monrovia area (within a 50-mile radius) must be accompanied by planned replanting. 4.4 Charcoal production as now practiced primarily in traditional earthen kilns in Liberia is probably no more than 15% efficient. A port- able metal kiln such as the "Ghana kiln" offers a conversion efficiency of 25%, or 60% greater than the earthen kilns, and it is a readily trans- ferable technology. The work done by the Partnership for Productivity  12 - (PFP) project has demonstrated, on a limited scale, that portable metal kilns can easily be fabricated and successfully operated in Liberia. 4.5 The Cape Mount forests of 46,000 ha reserved for plantation development are an ideal source for a managed woodfuels production pro- gram. In conjunction with land clearing and planting operations, 25,000 tonnes per year of charcoal can be produced on a 25-year rotation. While this is within 80 miles of Monrovia end could be utilized for domestic supply, there i.s merit also in examining the potential for regional export of the charcoal. The Bomi Hills area has about 5,000 ha of exist- ing Gmelina and other species plantations that currently are un- utilized. On a seven-year harvesting rotation, this could supply about 25,000 tonnes per year of charcoal about 45 miles from Monrovia. 4.6 Within the context of the background material above and the much more detailed UNDP/World Bank Report, Liberia: Issues and Options in the Energy Sector, the following scope of work is outlined with the objective of defining the resources available, demonstrating more effi- cient modes of production, and defining the preferred combinations of resources and markets. Scope of Work 4.7 To meet the objectives specified, the following areas must be addressed: (a) Rubber Wood Resource Definition; (b) Expansion of Existing Demonstration and Field Trials Project for Portable Metal Kilns; (c) Charcoal Export Feasibility Study These areas can be addressed as separate activities by individual con- sultants or they can be performed by a single contractor as parallel or sequenced activities with integrated results. If individual consultants are utilized, the COL or the funding agency would perform the integration activity after completion of all the consultant tasks. Rubber Wood Resource Definition 4.8 All preliminary analysis has been based on assumptions that must be verified with accurate and up-to-date information on the status of the rubber tree resource. The consultant therefore will undertake a comprehensive review of the rubber tree resource. This review will establish the present area under rubber trees in both the conce~ssion and  - 13 - the smallholder sectors, the average age and estimated remaining commer- cial life by specific location, and confirm the current rate of resource utilization. The objective of the review is to provide detailed informa- tion on the availability of fuelvood from retired rubber trees on an annpal basis through the next decade. The consultant will coordinate closely with the work already completed, or underway in the World Bank West Africa Projects Department and the COL. The November 1984 World Bank Report, Liberia: Rubber Subsector Review and Identification Mission, should be used as the base reference document to start the effort. The consultant will also coordinate with, and draw information from any other appropriate and coincidental studies such as "Strategy for Expanding Rubber Production" and "Evaluation of the Pilot Pine Plantation (Industrial Trial Plantation), Cape Mount", both proposed for completion with World Bank funding. The consultant will make a projection for optimum use of the resource for supplying both f4elwood and charcoal to the Monrovia market after subtracting out the use of the concessions. Coordinating with appropriate counterpart staff, the consultant also will verify replanting options with the objective of establishing a sustain- able energy resource within a 50 mile radius of Monrovia. The replanting would by pecessity consider an appropriate mix of rubber trees and fuel- wood spfcies. The consultant will also consider the replanting as a method iif counteracting the severe environmental/ecological impacts of the local deforestation. Expansion of Demonstration and Field Trials Project for Portable Metal Kilns 4.9 It is essential to implement more efficient charcoal production techniques and hardware on a widespread basis to better use the available resources. Expansion of the PFP project will be evaluated by the consul- tant to motivate greatly expanded use of portable metal kilns iP, both native forest and rubber wood areas. The consultant will specify and have fabricated several different types and sizes of metal kilns and con- duct extensive field trials. He will help select appropriate charcoal producers and sites and train the producers in the use of the new equip- ment. He will evaluate the results of all of the field trials and prepare an implementation plan for widespread dissemination of portable metal kilns. The plan should include investment requirements, definition of roles and responsibilities, and target goals and schedules, In the plan the consultant also will define any iucentives or lines of credit required to achieve widespread implementation of the most efficient models. Charcoal Export Feasibility Study 4.10 If managed properly, the Cape Mount forest resources could yield 25,000 tonnes per year of charcoal for a 25-year rotation of the  - 14 - 46,000 ha forest area to be converted to plantations. The 5000 ha of plantations in the Bomi area could supply an equivalent amount on a seven-year rotation. The export potential of this production will be evaluated for specific target narkets. The contractor will undertake a detailed study of the costs and logistics of the trade and identify the target markets, i.e., Mauritania, Senegal, etc. The contractor will also coordinate trial shipments to the preferred target markets as part of the feasibility study either utilizing charcoal produced by traditional methods or as a result of the portable metal kiln field trials in the Cape Mount and/or Bomi areas. The contractor will perform sufficient financial and economic analysis, including sensitivity analysis of indi- cated areas, to determine conclusively the viability of an export scheme as compared to domestic consumption. In this analysis will be factored the value of the additional charcoal supply that could be provided in the Monrovia area from senile rubber trees in the short term and from the establishment of fuelwood plantations in the long term. Organization and Timing 4.11 A task force formed by the Ministry of Agriculture will be the local entity responsible for the organization and overall local coordination of the work. The task force will coordinate the work as required, with GOL, and private and international agencies that already are working in the charcoal and forestry sectors. The task force will provide counterpart staff during the field work along with office space, supplies, local transportation, and secretarial services. 4.12 The work will be performed as three separate and distinct tasks, although the tasks can be carried out in parallel or sequenced. Task 1 will cover all activities described in paragraph 4.8; Task 2 will cover all activities described in paragraph 4.9; and Task 3 will cover all activities described in paragraph 4.10. A consulting firm or individual consultants will be contracted to complete the Tasks. Task 1: Rubber Wood Resource Definition - 6 months to complete Consultant Man-months (9) 65,000 Travel and Per Diem $25,000 Meetings and Reports $10,000 Total Cost $100,000 a  - 15 - Task 2: Expansion of Demonstration and Field Trials Project - 6 months to complete Consultant Man-months (6) 40,000 Travel and Per Diem $12,000 Kilns $20,000 Meetings and Reports $ 8,000 Total Cost $80,000 Task 3: Export Feasibility Study - 6 months to complete Consultant Man-months (8) 52,000 Travel and Per Diem $18,oQO Risk Capttal $20,000 Meetings' and Reports $ 10,000 Total Cost $100,000 4.13 Contractor/tonsultant reports for all tasks will address their specific terms of reference and discuss activities undertaken9 problems encountered, and prnposals for their resolution. The reports will also include a record of axpenditures, time spent, meetings held, and visits undertaken. All reports will be submitted to the COL and the sponsoring/implementing. institution. For each task, a progress meeting will be held within 30 days of start-of-work, at which time the consult- ant will present his detailed plan of work and any preliminary findings.  - 16 - V. TERMS OF REFERENCE FOR PRE-INVESTMENT ANALYSIS FOR ORE DRYING WITH FUELVOOD Background and Objectives 5.1 Bong Mining Company (BMC) imported 25,000 tonnes of fuel oil just for drying iron ore in its pellet mill in 1983. The delivered cost of this oil is estimated at $4.7 million. Any conversion from fuel oil to fuelwood will result in a significant increase of funds available to the economy, as BMC pays for the oil with foreign exchange earned offshore as payment for the ore. BMC has already conducted trials that showed that 50% of the heat needed for ore drying could be satisfied by feeding supplemental fuelwood to the existing fuel oil combustion systems. If wood can be delivered to BMC at $35 per tonne, BMC would save $1 million per year and Liberia would see, in effect, the repatriation of $1.3 million per year. 5.2 In 1983, BMC attempted to procure a one-year contract to supply 100 tonnes per day of wood to its plant. The response was poor, with only prohibitive prices offered by local contractors. BMC so far has been reluctant to consider a supply contract of more than one year's duration; however, the initial capital requirements of an entrepreneur to undertake such a business is estimated to be as much as $750,000. It is clear that some form of risk capital will be required to alleviate the risk that the BMC will cease operetions within five years of the contract start. Experience on the Firestone Concession and with Monrovia Bakeries suggests that a reasonable delivered fuel cost is achievable, if the contract period and source of wood are firm, or already depreciated hardware is available. 5.3 The objective of the following scope of work is to reevaluate this potential fuel substitution and prepare an implementation plan with the proper financial and economic incentives for all parties involved. Obviously, all work on this effort would be closely coordinated with BMC, and a reasonable projection for continuation of BMC mining activities would be factored into any analysis. Scope of Work 5.4 The consultant(s) shall perform the following tasks, at a mini- mum, to define the potential of, and implementation steps for, conversion to partial fuelwood firing at the BMC ore drying facilities: (a) identify the full costs to BMC for conversion under several substitution scenarios up to 50% fuel oil back-out;  - 17 - (b) specify the capital requirements for an entrepreneurial venture to supply the fuelwood; (c) identify the least cost fuelwood resource, i.e. Bomi Hills Gmelina plantations, senile rubber resource, etc.; (d) specify the logistics of supply to BMC, giving full range of options; (e) evaluate the economic and financial benefits likely to apply to all parties untder various scenarios, for example, with BMC con- tinuing to mine from a very short term of one year after con- version, to at least five years; (f) ident';fy the incentives needed to alleviate unreasonable risks to private sector participants; and (g) formulate a project implementation plan. Organization and Timing 5.5 The Department of Energy (DOE) will be the local agency respon- sible. DOE will coordinate the work as required with GOL agencies and private sector parties who may become involved in the implementation program and will provide counterpert staff during the field work along with office space, supplies, local transportation, and secretarial services. 5.6 The work will be completed by the consultant(s) over a 3-month period with up to six weeks spent in the field. The total cost is esti- mated at $50,000, including consultant time (4-5 man-months), travel and per diem, and report preparation. 5.7 The consuAtant's final report will address the specific terms of reference and discuss activities undertaken, problems encountered, and proposals for their resolution. The report will include a record of expenditures, time spent, meetings held, and visits undertaken. The final report will be submitted to the GOL and the sponsoring/implementing institution. q~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~  - 18 - VI. TM OF RREFE CE FOR PROVISION OF TWO (2) PULL-TIME ENERGY PLANNING PROFESSIONALS Background 6.1 The COL implicitly recognized the importance of an integrated approach to energy sector management and development in 1981 when it established the National Energy Committee (NEC). This high level body was comprised of Ministers and heads of energy sector parastatals under the chairmanship of the Minister for Lands, Mines and Energy. However, the NEC was not given any real decision-making powers or significant administrative resources and soon after, its original members delegated their responsibilities to lower level staff. Similarly, in October 1981, the statute of the Ministry of Lands, Mines and Energy was amended by decree of the Head of State to establish a Department of Energy (DOE) within the Ministry, and more recently the head of this department has been made an Assistant Minister. The DOE is poorly staffed and has minimal administrative and logistical support in comparison with the 4mportance of its task. USAID has provided considerable assistance to the DOE in the form of a resident energy advisor and back-up consultancy services. The mission believes that for the foreseeable future continu- ing the use of a contract expatriate provided under some technical assistance arrangement is essential. The USAID technical assistance program to the DOE is budgeted to continue through September of 1985. There is need for this or a similar program of support to be extended for at least two more years, and for adequate resources to be provided for additional manpower training and development. 6.2 In addition to continuing the Energy Advisor role in DOE, which should be technology oriented, it is recommended that an energy invest- ment and policy planning expert be similarly provided to the MPEA to establish within that ministry an effective energy planning unit. This new position would coordinate closely with the DOE, but be clearly res- ponsible for the macro level energy investment analysis, and also for advice to the EFMC. This position will likely need to be filled by a contract expatriate for a period of at least two years. Adequate resources must also be provided here to train Liberian staff to eventually assume full responsibility for the function. Scope of Work 6.3 The main function of the two staff professionals to be provided is to firmly establish an energy planning function within the GOL, in- cluding the definition of training needs and supervision of staff development. The energy policy and planning function should not be confused with implementation. Even pilot projects in areas in which there is little experience in Liberia should be made the responsibility  - 19 - of implementing agencies which can be other government departments, para- statals or the private sector. Although the specific functions of the energy planners will vary, the general obligations include the following, which should become the main activities of the proposed Liberian energy policy and planning activities: (a) prepare and maintain an energy sector irnvestment program for a ol rolling ten-year period with projects, programs and technical assistance requirements ranked in terms of priority, and specify the policy, planning and pricing requirements for implementing this program. (b) define and routinely update an energy resource inventory for use by the major production subsectors, and assist them in defining the least cost source of energy supply. (c) maintain adequate records on economic and financial prices and costs throughout the energy economy and advise the government on the adequacy and impact of prices applied and their policy implications. (d) provide assistance to the planning departments of the energy parastatals in identifying future markets and demand trends, especially where these may be altered as a result of government intervention, through prospective major projects or through changes in global demand for major export commodities. .(e) assist the government as the shareholder in the energy para- statals in defining and monitoring the objectives and performance of each, and in reviewing subsector plans and major project proposals. (f) work within the Ministry of Planning and Economic Affairs (MPEA) in order to define the relative economic benefit and priority of energy sector investments and technical assistance in the overall public sector investment program. (g) provide direct advice to the Economic and Financial Management Committee (EFMC). Organization and Timing 6.4 The Ministry of Planning and Economic Affairs and the Depart- ment of Energy will be the local agencies responsible for the organiza- tion and overall local coordination of the effort. The MPEA and DOE will provide the counterpart staff along with office space, supplies, local transportation, and secretarial services. The current arrangement for the USAID-provided Resident Energy Advisor to the DOE can serve as a model for implementation.  - 20 - 6.5 The two professionals are to be chosen carefully, both having the appropriate energy planning experience in developing countries. One should have an economics and policy orientation (for MPEA) and the other should be technology oriented (for DOE). Both, however, should be very experienced in dealing with government at all levels. Each will be appointed for a 2-year ieriod. 6.6 The cost of providing the two staff professionals and the appropriate training services is estimated as follows: Economist (2 man-years) $200,000 Technologist (2 man-years) $200,000 Training for Liberian staff $100,000 Total Cost $500,000  EEY SECTOR WAGUNT ASSISTANCE PROGRAM Activities Completed Date Completed Energy Assessment Status Report Papua New Guinea July, 1983 Mauritius October, 1983 Sri Lanka January, 1984 Malawi January, 1984 Burundi February, 1984 Bangladesh April, 1984 Kenya May, 1984 Rwanda May, 1984 Zimbabwe August, 1984 'Uganda August, 1984 Indonesla September, 1984 Senegal October, 1984 Sudan November, 1984 Nepal January, 1985 Project Formulation and Justiflcation Panama Power Loss Reduction Study June,,1983 Zimbabwe Power Loss Reduction Study June, 1983 Sri Lanka Power Loss Reduction Study July, 1983 Malawi Technical Assistance to Improve the Efficiency of Fuelwood Use in Tobacco Industry -November, 1983 Kenya Power Loss Reduction Study March, 1984 Sudan Power Loss Reduction Study June, 1984 Seychelles Power Loss Reduction Study August, 1984 The Gambia Solar Water Heating Retrofit Project February, 1985 Bangladesh Power System Efficiency Study. February, 1985 The Gambia Solar Photovoltaic Applications March, 1985 Senegal Industrial Energy Conservation June, 1985 Institutional and Policy Support Sudan Management Assistance to the Ministry of Energy & Mining May, 1983 Burundi Petroleum Supply Management Study December, 1983 Papua New Proposals for Sttengthening the Guinea Department of Minerals and Energy October, 1984 Papua New Guinea Power Tariff Study October, 1984 Costa Rica Recommended Tech. Asst. Projects November, 1984 Uganda Institutional Strengthening in the Energy Sector . January, 1985 Guinea- Recommended Technical Assistance Bissau Projects April, 1985 Zimbabwe Power Sector Management April, 1985 The Gambia Petroleum Supply Management Assistance April, 1985 Burundi Presentation of Energy Projects for the 'Fourth Five Year Plan May, 1985