POWER AFRICA IN RWANDA

 

Rwanda Energy Sector Overview

 

The Government of Rwanda, under its latest Economic Development and Poverty Reduction Strategy, envisions transitioning from a developing country to a middle-income country by 2020. But Rwanda’s ability to achieve this ambitious goal is constrained by challenges in the power sector. As a result, Rwanda’s government is working to target 100% access to electricity by 2020.

Although Rwanda is endowed with a number of natural resources, including hydro, solar, and methane gas to power, and has plans to generate 563 megawatts (MW) of electric power from these sources, it currently only has about 209 MW of installed generation capacity to serve a population of more than 11.5 million people.

The majority of its existing capacity comes from hydropower (approximately 59%) and thermal generation (approximately 40%).  Most of the generation projects in Rwanda are the result of public-private partnerships between the government and independent power producers.

A law repealing the previous utility, the Energy, Water and Sanitation Authority, paved the way for the creation of a corporate entity which was incorporated in July 2014 with 100% government shareholding. The Rwanda Energy Group Limited and its two subsidiaries, EUCL and EDCL, was entrusted with energy development and utility service delivery, while the Water and Sanitation Corporation has the mandate to develop and operate water and sanitation infrastructure and deliver related services in the country.

Since 2008, power supply has grown by 360% from 45 MW to 209 MW while peak demand has grown only 133% from approximately to 119 MW in 2017. Rwanda is also part of the Eastern Africa Power Pool, and has plans to import up to 30 MW from Kenya in 2017.

Based on current data, Rwanda’s national electrification rate has reached 31% (3% off-grid, 28% on-grid). Over seven million people still lack access to electricity.

Despite high resource potential and opportunities for cross-border export, Rwanda’s power sector faces significant challenges, including a constrained transmission system. The annual consumption of electricity per capita is among the lowest in Africa, with approximately half of consumers using an average of less than 20 kWh per month.

The Ministry of Infrastructure (MININFRA) leads the country’s national energy policy.  In an effort to reach the 100% access target, MININFRA developed a Rural Electrification Strategy, which was approved by Cabinet on April 27, 2016. This strategy revised the target of providing 70% access to electricity by June 2018 with on-grid connections, to a target of 22% of households gaining access to a Tier 1 energy service (as defined in the SE4ALL Multi-Tier Framework) and 48% of households gaining access to on-grid or at least Tier 2 energy service.  

On January 1, 2017 Rwanda introduced cost cutting measures for poor households by cutting the tariff for the first 15kWh consumed per month by 50%. It also reduced industrial tariffs to bring make them competitive with regional rates and brought in a time-of-use tariff for industrial customers in order to shift load to off-peak periods.

Power Africa Support

Power Africa is supporting Rwanda’s energy development strategy through a wide range of technical assistance, in cooperation with the World Bank Group, the African Development Bank, the Government of Sweden, the Government of Norway, the Government of Canada, the UK Department for International Development, and other development partners:

  • Assist with the development of new policies and procedures that will facilitate private-sector led IPP investments in solar, hydro, and other projects
  • Provide transaction assistance to projects attempting to reach financial close  
  • Assist with the planning, operation, and maintenance of generation, transmission, and distribution systems
  • Support access to off-grid electricity

Projects that received support from Power Africa in Rwanda include:

Name

MW

Transaction Type

Timeline

Power Africa Support

Gigawatt Global

8.5

Solar

Began operations in 2015

Africa Clean Energy Finance Initiative early stage support allowed project to be negotiated and commissioned in slightly over one year’s time; helped build government capacity and increased private sector interest in additional projects

ContourGlobal Kivuwatt

26

Methane gas to power

Inaugurated 2016

Embassy support for US company

 

Power Africa Contact for Rwanda

Claire Nelson, Rwanda Power Africa Lead, Email: cnelson@usaid.gov

Sources: