13 January 2014

Rwanda: Investors Urged to Take Advantage of Opportunities in Energy Sector

The private sector has been urged to take advantage of business opportunities in the energy sector, a move that would boost government programmes aimed at increasing the country's power generation capacity.

Silas Lwakabamba, the Minister for Infrastructure, said government efforts to develop the power sector cannot succeed if the private sector does not play a big part.

Lwakabamba was speaking during a private sector-government forum at the Ministry of Infrastructure on Friday.

He noted that the private sector has a big role to play to ensure the government achieves its energy targets under the on-going second phase of the Economic Development and Poverty Reduction Strategy (EDPRS II).

The government plans to increase the country's installed power capacity from 110.8MW presently to 563MW by 2017.

Lwakabamba said to achieve this target, an estimated $1.8b will be required to increase power generation by at least 100MW annually for the next four years and help sustain the expected growth across all sectors of the economy.

However, Edward Ndayisaba, the chairman of Energy Private Developers Association, said their efforts are always curtailed by a host of challenges, including lack of a clear policy to guide private investment in the energy sector and reluctancy by banks to fund them.

He added that procedures on how developers can acquire sites for hydro-power development are not clear and the sector has complex and unfair tender requirements.

Ndayisaba urged the government to review the sector's tendering policy to compel foreign companies which are awarded energy development jobs to sub-contract local firms, arguing this will build the capacity and skills of Rwandan contractors.

Ntare Karitanyi, the director general of the Energy Water and Sanitation Authority, assured investors in the energy sector that the government would find ways to address their challenges.

Investors speak out

Denis Karera, a real estate developer and hotelier, called for regular public-private sector engagements, saying such meetings provide the forum needed to solve the sector's challenges.

He said low power supply has forced many businesses to buy standby generators to ensure constant supply in case of loadshedding. This, he said, increases the cost of doing business.

The investors challenged banks to work together and provide necessary funding through syndicated loans since individual banks may not manage to fund big energy projects.

Some of the key projects the government is focusing on to boost power generation include the 25MW Kivu methane gas project, the 28MW Nyabarongo hydro-power plant, 15MW from the Gishoma peat plant, 4MW from the Giciye hydro-power plant, the 2.2MW Rukarara II hydro-power plant, Gigawatt Global solar plant that will generate 8.5MW and six micro-hydro plants at Shili I, Nyabahanga, Nyirabuhombo, Mukungwa II, Janja and Gashashi, which are tipped to generate 4MW in total.

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