19 May 2014

Rwanda: New Energy Incentive for Industrial Park Investors

Industrialists are set to benefit following a decision by the national energy utility to waive electricity connection fees for those seeking to set up industrial plants in the new industrial park located in Gasabo District.

The decision was announced by the Energy Water and Sanitation Authority (EWSA) last week.Aimee Uwanyiligira, the head of electricity commercial unit at EWSA, said the waiver aims at attracting more investments, thus spurring economic development.

"We were being charged between Rwf4m - Rwf5m for installing a 500KV transformer but this has been revised to no cost," she noted.

She added that the decision also aims at encouraging industrialists to move to the free economic zone.

Uwanyiligira added that even charges for those intending to establish industries outside the free economic zone had been slashed.

"For instance, establishing a 5.3km medium voltage line from the national grid before was costing about Rwf212 million, but now it's just a flat fee of Rwf20 million," she said.

Ntare Karitanyi, the Director General, of EWSA said the move will help boost employment since more industrial establishments will be attracted to invest in the area.

"It will also present industrialists with an opportunity for expansion," she said

Power tariffs biting:

Claudine Mukeshimana, the Executive Director of Rwanda Association of Manufacturers, welcomed the move saying it would help reduce costs of production for industrialists.

She, however, called upon the Government to reduce power tariffs as they greatly reduce the turnover of industrialists.

"The power utility urges us to carry out our operations in the night, as this comes with low electricity charges, but it has proven impractical, since you have to supervise workers till late in the night which is costly," Mukeshimana said.

She also called upon EWSA to work towards reducing power blackouts, saying they cause enormous losses in stalled work.

"Our members have also complained of occasional faulty power connectivity, which usually destroys property worth millions," she said.

Alex Ruzibukira, the Director General of Industry, Small and Medium Enterprises at the Ministry of Trade and Industry, noted that the move is an incentive for industrialists to shift to the special economic zone before the 2016 deadline.

"Nine out of 14 factories have moved from Gikondo wetland to the new economic zone in Kigali, we hope we this development will encourage the remaining firms to move," Ruzibukira said.

"Basic infrastructure, including water, sewage, fibre optic cable and road network are already in place at the Special Economic Zone in Kigali, so subsidising electricity connectivity is a huge complement," he added.

Ruzibukira also disclosed that the construction of eight more industrial parks is underway country wide.

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