13 February 2014

Rwanda: AfDB Boosts Rwanda's Electricity Access Program With U.S. $40 Million

African Development Bank (AfDB) has extended a concessional loan worth $40 million to Rwanda to support the country's electricity access program, which seeks to expand electrical access across the country.

The financial agreement will fund the construction of 119 kilometers of transmission line from Rusumo Power Plant to Birembo substation in Kinyinya, Gasabo through the new Bugesera International Airport substation.

"Energy plays a key role in the development of our economy, almost all sectors are driven by energy," said Claver Gatete, Minister of Finance and Economic Planning.

The project beneficiaries will include households, industries, small and medium sized enterprises, and businesses, all of which will gain access to cheaper, more reliable and sustainable electricity.

"Increased electricity access create employment opportunities, increases off farm jobs, contributes to industrial development and reduces production costs through decreased electricity tariffs," Gatete said.

Rusumo Falls Hydroelectric Power Plant, a regional project shared by Tanzania, Rwanda and Burundi, is expected to generate 80 megawatts of power that will be equitably shared among the three countries, each with an even share of 26.6 MW.

The World Bank will finance the power plant, costing $340 million, while AfDB will finance transmission lines in the three countries.

Negatu Makonnen, AfDB's country representative for Rwanda, noted that the Bank's support will directly contribute to Rwanda's objective of sustained rapid economic growth and facilitate the process of economic transformation.

"It will also provide the opportunity to replace high cost thermal plants from the power systems, thereby lowering the cost of power generation," Makonnen said.

Under its ambitious target, the government is looking at increasing electricity access to 70% in 2018, up from 17% currently.

Currently, the country's hydropower potential is estimated at 300 MW, while 333 hydro sites have been identified with a combined capacity for 96 MW. The country currently has about 44.8 MW of mini and small hydropower plants in operation.

Other regional projects underway are Rusizi (Rusizi III of 145 MW and Rusizi IV of 205 MW) that would be able to supply energy to DRC, Rwanda and Tanzania.

AfDB also finances the Electricity Access Rollout Program with total financing of USD $43 million. Apart from the energy, the bank is currently financing 23 projects worth over $500 million, with infrastructure projects comprising over 60% of the entire financing.

Rwanda, like other countries in Africa, faces am energy challenge that pushes back the continent's efforts to grow its economies, thus rendering it difficult to shift from aid dependence to self reliance.

"Poor electrical reliability means that African manufacturing enterprises experience power outages on average 56 days per year. This therefore calls for countries to increase funding in clean energy generation to attract more investment and boost private sector growth," said Ernest Mazimpaka, an energy expert.

Rwanda has outlined a number of small but key projects seen to help it achieve its target, including Giciye hydro power plant at 4 MW, six micro hydro plants with 4 MW (Shili 1, Nyabahanga, Nyirabuhombohombo, Mukungwa II, Janja and Gashashi), Nyabarongo hydro power plant at 28 MW, Rukarara II hydro power plant with 2.2MW, 25 MW from Kivuwatt methane project, Gigawatt Global Solar Plant with 8.5 MW and Gishoma peat plant with 15 MW.

Experts are hopeful that such projects and others will help the country meet the ambitious target of increasing its current installed capacity from the current 110.8 MW to 563 MW by 2017.

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