Opinion: South Sudan’s $150 million solar project is a complete scam

Written by Atak Gore

South Sudan’s National Cabinet recently approved a $150 million solar project in the capital, Juba. On August 2, Energy and Dams Minister Peter Marcelo presented a memorandum of understanding (MoU) to be signed between his office and an unnamed company called TPA Company Limited. The project was reviewed by the National Cabinet and approved unanimously without objection.

This unanimous approval should raise alarm bells, as it means that the South Sudanese cabinet is extremely incompetent, involved in corruption and bribery, and possibly even money laundering. In fact, the project was supposed to cost only about $3.96 million – so who pocketed the remaining $146 million?

According to Dr. Jacob Meju Korok, Deputy Minister of Information, the concessional loan for the project will last for 20 years, plus a grace period of five years. Korok also disclosed that the Minister of Energy has also asked the Minister of Finance to pay $30 million to the Egyptian company El Sewedy Electric in accordance with the court ruling. The company has been contracted to build a 20 MW solar power plant in Nesitu, Juba County, the first of its kind in the country, with an investment of $50 million. Korok explained that the company has sued the Government of the Republic of South Sudan at the United States International Centre for Settlement of Investment Disputes for failing to make the final payment despite an initial advance of $20 million. The Nesitu solar project costs $2.5 million per megawatt.

“The full amount of the project was actually $50 million, but the government managed to pay $20 million and the remaining $30 million,” Dr. Korok told reporters on August 2, adding: “So the company decided to take the government to the US arbitration court and Minister Marcelo asked the Ministry of Finance to deal with the issue before going to court.”

Considering that the cost of building a 5 MW solar farm should be between $3.96 million and $5 million, it is simply criminal that South Sudan paid $150 million. For context, Amea Power recently announced a 24 MW solar project in Uganda that cost just $19 million, or about $791,666 per MW, far less than the $30 million per MW that South Sudan paid. The project is owned by Dubai-based developer Amea Power, while solar projects in South Sudan require government funding and are built by private companies that bear no financial risk. If the funds allocated to this project were used properly, it could generate 189 MW of electricity and impact 1.44 million people (or 442,500 households).

In addition, in February 2024, the International Finance Corporation (IFC), in partnership with Social Investment Managers and Advisors LLC (SIMA Funds) and other financial institutions, issued a $150 million solar green bond to finance productive solar projects across Africa. The bond aims to finance more than 220 MW of solar projects on the continent. This means a cost of $681,818 per MW, which is again significantly lower than the solar project in Uganda.

This $150 million solar project highlights the deep corruption that persists in the South Sudanese government. There is no legitimate reason for the government to obtain loans or award contracts to companies; ministries should implement projects themselves, not outsource. If the cabinet was not corrupt or bribed, it would at least carefully consider why 1 MW costs $30 million, when Nesitu’s 20 MW solar plant only costs $2.5 million per MW. Why does a $150 million solar project cost 12 times more than Nesitu’s solar project and 38 times more than Uganda’s solar project? The problem is not only that the government failed to understand the contracts they signed with the companies, but also that corruption and bribery led to unfavorable terms and conditions that are not in South Sudan’s interest.

Clearly, the South Sudanese government is using a vital project to launder money, diverting public resources for its own use, pushing the country further into debt, and enriching itself at the expense of its people. This $150 million solar project is a classic example of corruption and mismanagement. The real winners are not the citizens who desperately need reliable electricity, but the corrupt officials who approved the project and the companies behind it.

You can contact the author, Atak Ngor, via X (formerly Twitter).

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