9 January 2014

Rwanda: 2013 Gave Energy Sector Reason for Optimism

The energy sector strategic plan and roadmap 2013-2017 paints a positive outlook for the sector that is expected to boost the growth needed to leapfrog the country into middle-income status by 2020.

Considering the promising energy projects that were born in 2013, the government plans to increase the country's installed capacity from 110.8MW to 563 MW by 2017.

This target will require an investment capital estimated at $1.8 billion to increase electricity generation by at least 100 MW annually for the next four years to sustain the expected growth across sectors.

The government unveiled a Frw 3 trillion ($4.7bn) roadmap for energy production and accessibility over the next five years. This will mainly be generated from hydro, methane geothermal, solar and peat which most of these have received funding in 2013 and are likely to push 87 MW more to the national grid by end of this year(2014).

According to Energy, Water and Sanitation Authority (EWSA), the planned power generation will comprise peat (estimated at 200 MW), methane (100 MW), hydro (63 MW), geothermal (90 MW) and solar (18.5 MW).

The plans outlines key projects such as Giciye hydro power plant (4MW), six micro hydro plants with 4MW of Shili 1, Nyabahanga, Nyirabuhombo, Mukungwa II, Janja and Gashashi, the 28MW Nyabarongo hydro power plant, the Rukarara II hydro power plant (2.2MW). In addition, 25 MW is to be obtained from the Kivuwatt methane project, 8.5 MW from the Gigawatt Global Solar Plant and 15 MW from Gishoma peat plant.

The country's energy target as well as projects has come to realization with new energy deals signed in 2013.

Last year, the government signed a €4 million deal (Frw 3.5 billion) with the Netherlands to support the electricity access rollout program. Also, the year saw the signing of the $23 million (Frw 15 billion) energy deal with a Dutch firm to develop an 8.5 MW solar power plant, and a $41.5 million (Frw 26.9 billion)agreement with the African Development Bank (AfDB) to scale up energy access projects in the country.

According to Finance Minister Claver Gatete, the financing which comprises a loan of $23.4m and a $17.9m grant will be used to upgrade Northern Province energy projects of Gifurwe to 10 MVA, as well as relocate the Rulindo substation.

The project will be implemented over a period of two years and will connect 25,438 households, 179 schools, 29 health centers and 25 sector administration offices to the grid along the distribution network areas.

In a further bid to make electricity more accessible by making it more affordable, the monthly fee of Frw 500 on Cashpower meters was also scrapped.

Last but not least, to ensure that the ambitious targets will be met, the government also decided to restructure EWSA which will once again be split in autonomous bodies for water and sanitation, and for electricity.

Private sector speaks out

In 2013, the Private Sector Federation (PSF) in its advocacy strategy and action plan also called on the government to address the challenges in the energy sector.

The plan calls for more interventions in energy production to reduce blackouts, saying that the current annual of 80 days of power outages leads to high production costs due to the fact that manufacturers have to use backup generators.

For example, key industries in the country have indicated that more than 5% of the production losses is due to power outages. According to PSF, for big industries such as Inyange and Sulfo Rwanda Industries losses amount to 5%, and even 7% for Minimex. Other manufacturing companies can't even estimate the power outage losses.

Nevertheless, PSF CEO Hannington Namara says that with the new production targets, the private sector is optimistic it will be able to get energy required to drive its growth.

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