Turkish firm Hakan Mining and Generation Industry and Trade Inc will invest $400 million (Rwf300 billion) in 80MWs peat-fired power plant in southern Rwanda.
The firm will under a power purchase agreement (PPA) signed with Rwandan government design, finance, build, own and operate the plant using peat extracted from south Akanyaru in Gisagara District.
Hakan's chairman Ahmet Karasoy said the company was attracted by Rwanda's growth prospects offered by country's vibrant economy and investment environment, which is attributed to good public administration.
He said the Gisagara project will provide over 700 jobs to Rwandans and Hakan will support agriculture through irrigation, among other corporate social responsibility projects to be undertaken by the firm.
Rwanda, currently has installed generating capacity of 185 MW and construction of Hakan's peat fired plant is set to commence within 12 to 15 months to plug the electricity supply deficit the country is facing.
Hakan as independent power producer is required to construct within 47 months and commission the facility to inject 80 MW to the national grid by end of March 2020 or face penalties for failing to deliver.
Infrastructure Minister James Musoni said studies show that Akanyaru prospect has sufficient peat to support to the plant and PPA has a provision for IPP to be penalised if it fails to generate power by end of March 2020.
"Gishoma peat project failed to deliver on time due to lack of better studies but it will by August this year be producing 15MW," said Mr Musoni.