The Electricity Water and Sanitation Authority (EWSA) is challenged with high operational costs that cannot be covered by revenues from electricity sales, a scenario that could potentially pose a threat to its sustainability, a reported has stated.
According to the Midterm Review Draft Report on the Electricity Access Rollout Program (EARP), 50 percent of EWSA's clients consume less than 20kw per hour and bring in only about 6 percent of revenues, yet the body spends approximately US$1,000 (Rwf600,000) on every household connection.
The review was conducted between May and July 2012 through a contract between The World Bank and the Government of Rwanda.
"As a consequence, it is difficult for EWSA to be viable with such load profile unless consumers start to use and pay for more electricity," Robert J. van der Plas, an expert in the on the EARP team said on Friday.
"Despite the success achieved in grid rollout, realistic targets will be lower unless fundamental changes are introduced to the approach. To reduce EWSA's costs, we must look at good alternatives seriously, like large regional electricity programs, as well as by involving the private sector in electricity production."
James Kamanzi, the Permanent Secretary in the Ministry of Infrastructure, said although the draft copy indicates that electricity consumption is low, people have benefited and poverty has substantially reduced.
"Many people connected to electricity have moved from subsistence farming and are generating income beyond what their farms could provide for them," Kamanzi said.
Through EARP, EWSA has connected 380,000 new clients to the electricity network since the plan's inception in 2009; the figure is 300,000 more than had been planned to be attained by 2012.
This indicates that the connection rate more than tripled since 2006, from 6 percent to 21 percent.
"Electricity rollout is a very clear priority entailed in Vision 2020. Therefore, the plan needs all the support required. We are also looking at the importance of solar energy as a suitable supplement that we must embrace in order to reach electricity to as many people as possible in the short run, while embarking on the long term grid roll out plan," Kamanzi said.
He added that based on vision 2020, EWSA's coordination with concerned ministries to improve power demand consumption is paramount.
"We are confident that with improved approaches based on better coordination with concerned agencies, more people will use electricity productively and improve their living standards, as well as generate more revenue for EWSA.
Most Rwandans are engaged in agriculture and do not use power for productive purpose. Since rural electrification does not automatically raise rural incomes, we are looking at coordinating with institutions that can sensitize the people to create small businesses and decrease dependence on subsistence farming which uses little or no electricity".
However, a World Bank presentation in early June warned that without massive investment of about US$1.2 billion, coupled with realistic approaches, it will be extremely difficult to obtain 30 percent electricity connection rate by 2017 necessary to supply power to at least 70 percent of the population.