Focus Media (Kigali)
Dominique Price
23 June 2008
Electrogaz is set to close a purchase agreement with American investment firm Contour Global as early as this week. Sources quote the selling price of power at between Frw 60 and 80-about half the going rate currently.
Alongside this deal, the Ministry of Infrastructure is signing a 25-year, $240 million (Frw 130.3 billion) concession contract with Contour, allowing the firm to build a 100 megawatt methane-powered electricity plant on the shores of Lake Kivu.
Electrogaz says that, if all goes according to plan, Rwandans can look forward to smaller electricity bills by the end of the year-but improving energy distribution may take longer, the company admits.
Right now, Rwandans pay around Frw 120 per kilowatt of electricity, nearly twice the price as other East African nations. Electrogaz aims to reduce that cost to between Frw 60 and 80 by December of this year, says Charles Kanyamihigo, Director of the company's Department of Electricity.
"Cost reduction is a necessary part of the whole idea," he says.
The "idea" is to use methane gas as a primary source of energy in Rwanda, instead of wood and diesel, the country's current main fuel sources. Diesel-fuelled generators are costly and supply is inadequate, the government says-problems it hopes to solve by shifting to natural gas.
Experts estimate that Lake Kivu's soil holds over 60 billion cubic meters' worth of methane gas, a natural resource which the government says should be exploited.
The reserve also contains high levels of carbon dioxide gas, which the government says it will eliminate over a 40- to 50-year period, reducing the risk of a CO2 explosion.
A smaller-scale, government-funded methane extraction project is already underway in Gisenyi. Much larger, the Contour Global plant will take up to a year to construct, and will generate an energy output of more than twice Rwanda's total daily production, according to the firm.
The legal representative for Contour, Richard Mugisha, says Electrogaz is getting a good deal. "It's a very fair price," he says.
But the opportunity should also prove lucrative for Contour Global, who Mugisha says is "happy with the investment climate in this country." Lower prices considered, experts say the methane solution is not a perfect fix.
Critics argue that under-water methane extraction, a relatively new and widely-unused method of withdrawing gas, may not be cost-efficient. If water molecules aren't fully removed from the methane, experts say, low-quality gas will lead to low output levels.
But Contour Global says it's confident in the program's equipment and expertise. "My client can't be one-hundred per cent certain, but they are quite comfortable with the technology and with studies that have been done," Mugisha says.
Still, extraction and generation are only two-thirds of the energy pie, and experts agree that power distribution should also be a chief concern.
Parts of the national power network date back to 1939, according to a leading professor of electrical engineering at the Kigali Institute of Science and Technology.
"Most of the equipment has outlived its usefulness. It is becoming obsolete," he says. "The network needs refurbishment and re-routing."
The Ministry of Infrastructure agrees that the power network covers too little of the country. Only five per cent of Rwandans have access to electricity, says Charles Nyirahuku, head of the government's gas unit. According to him, the Ministry has long-term plans to extend the grid.
The government aims to bring electricity into rural areas, increasing the number of connections from 90,000 to 350,000 households over five years, Nyirahuku says.
As for ageing equipment, Electrogaz recognizes that while power supply is fairly consistent in newer neighbourhoods with modern power lines, in older areas like Nyamirambo, archaic systems are failing.
"All equipment has a life. Some equipment needs to be replaced sometimes," says Kanyamihigo. "We're working on it."
According to Mr Kanyamihigo, counters have been installed at all transmission stations, and crumbling cement poles are being replaced across the country. Further repairs hinge upon delivery of several shipments of new materials, he says. "Little by little," he adds.
Electrogaz continues to hold a near-monopoly over energy distribution in Rwanda, but the company says it hopes privatization of the power generation sector will attract more investors like Contour Global, eager to stake a claim in Rwanda's natural resources.
Be the first to Write a Comment!
Copyright © 2008 Focus Media. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
