June 20, 2024

Liberia Introduces New Incentive For Importing Solar Products

Liberia's President Joseph N. Boakai has issued Executive Order #134, extending the tariff suspension on off-grid solar renewable energy products initially introduced in Executive Order #107.

Extending Executive Order #107

President Joseph N. Boakai has signed Executive Order #134, which suspends tariffs on off-grid solar renewable energy products. This order builds upon Executive Order #107, which previously implemented a similar suspension of tariffs on these products. The issuance of this new Executive Order reflects the government's ongoing dedication to advancing Liberia's renewable energy sector.

The Executive Order outlines the suspension of import tariffs on off-grid solar lighting appliances, equipment, and system components, as well as other systems related to renewable energy development. These items are classified under specific Tariff Numbers in the Liberia Revenue Code, which are detailed in the attached Executive Order.

As per the Executive Order, importers are required to pay only the Custom User Fees (CUF) and the ECOWAS Trade Levy (ETL), where applicable. The order signed by President Boakai states that this Executive Order will take effect immediately.

The directive specifies that beneficiaries of the Executive Order must be actively engaged in the renewable energy sector, registered with the Rural and Renewable Energy Agency (RREA), and compliant with the pre-export verification of conformity requirements outlined in the Importation Guidelines for solar energy products. It specifies that only products meeting the standards recognized by the National Standards Authority (NSA) under the technical regulations for solar energy products qualify for the suspension of import tariffs.

Providing Incentives for Private Sector Investments

During this time, the government has revised tariffs on plug-and-play solar lighting and electrification systems, integral components of standalone photovoltaic systems, efficient appliances including panels, batteries, and control units used to stimulate economic development in rural areas, along with other components essential for system integrity and related renewable energy systems.

The government acknowledges the growing necessity to promote activities in the renewable energy sector by incentivizing private sector investments in procuring crucial off-grid solar lighting appliances, equipment, and system components. This initiative aims to enhance access to clean, affordable, and reliable energy services.

The President emphasized that under the Constitution, Executive Orders can be issued in the public interest to address emergencies or correct specific situations that cannot wait for prolonged legislative processes.

Liberia’s 2050 Carbon Neutrality Goal

Liberia aims to attract both national and international investments in renewable electricity to fulfil its commitments of achieving 30% renewable energy by 2030 and carbon neutrality by 2050 as outlined in its Nationally Determined Contributions (NDC). The proposed readiness support initiative seeks to establish an investment framework for renewable energy, introduce risk mitigation measures, and develop a high-quality Project Concept Note for submission to the Green Climate Fund (GCF).

Liberia's readiness support initiative aims to align with national climate strategies, the National Rural Energy Master Plan, and the Liberian Agenda for Transformation 2030. Its success will be measured by securing Green Climate Fund backing for renewable energy projects and significantly increasing the proportion of renewable electricity in Liberia's energy mix by 2030. This initiative seeks to enhance the country's resilience to climate change impacts while promoting inclusive growth through expanded access to reliable and clean energy sources, particularly in rural areas.

Key beneficiaries of this effort include various agencies, regulatory bodies, renewable energy investors, and financial institutions. However, challenges such as regulatory gaps, insufficient risk management, and a weak project development pipeline hinder private investment. Addressing these issues is crucial for Liberia to meet its renewable energy targets, promote sustainable development, and reduce reliance on fossil fuels.

Liberia's Executive Order #134, extending tariff suspensions on off-grid solar products, reflects its commitment to boosting the renewable energy sector and attracting private investment. This initiative supports national climate goals by enhancing access to clean energy while addressing challenges in regulatory frameworks and investor perceptions.

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