Following years of conflict, including two civil wars, Liberia continues to face significant challenges. Land lays fallow, homes remain dark without access to electricity and families continue to struggle to survive. While many Liberians are eager to see their country grow and prosper, failure to access capital markets often dooms a business before it can begin. This is particularly true for those seeking opportunities requiring less traditional forms of financing. Much needed investment in renewable energy services and technologies and in agribusiness is often foregone due simply to a lack of sector financing expertise.
To help stimulate economic growth, the Liberia Investing for Business Expansion (IBEX) Program, funded by the U.S. Agency for International Development and implemented by IESC under the Volunteers for Economic Growth Alliance (VEGA), is working with banks and businesses to encourage lending and growth in these sectors. A key aspect of the program's approach is to work with bank staff on how to evaluate prospects in these sectors, based on a greater understanding of the nuanced cycles of profitability and return on investment for businesses in the agriculture and renewable energy sectors.
On November 28th and 29th, 2012 14 banking professionals specializing in credit, risk and portfolio management took part in a two-day training course provided by IESC Volunteer Expert Greg Altman and the Liberia IBEX staff designed to provide the skills and tools necessary to effectively authorize and manage renewable energy sector loans, and to better assess potential projects. The course, titled "Project Finance: An Approach to Financing Renewable Energy Products," provided participants with a general introduction to the renewable energy sector, as well as with specific information designed to guide renewable energy sector investing in Liberia and the broader African context. Individual sessions focused on a variety of topics ranging from the practical definition of renewable energy and general considerations of project financing, to end product markets and fuel and electric power as it relates to a number of different scales and practical uses. Discussions also included an overview of general project finance cycles, due diligence considerations, credit risk assessments and models, as well as a detailed introduction to the work of the IBEX program and the IBEX pipeline.
The course was a success. Participants clearly identified a need for such trainings and the relevance their content will have in their daily work. “The knowledge acquired by participants about the renewable sector is now a key tool in my reviewing, monitoring and managing loans in this sector. Participants are now confident in future SME deals that have connection on the renewable energy sector and how to determine prospects in projects from such sector.”