A Brighter Future for Rwanda

Thursday, October 23, 2008

Rwanda has made exemplary progress since the devastating genocide of the 1990s and is quickly becoming a development success story.  But the country’s low access to stable electricity supply remains a hurdle in the way of its economic development.

Rwanda saw little to no investment in the energy sector for the last 25 years and currently only 6 percent of its population has access to electricity.

Between 1994 and 2000, the country was reshaping itself, settling people, restoring security, and recovering from a number of post-genocide effects. When the Government embarked on aggressive economic development, it became clear the country’s electricity supply deficit was more serious than anticipated.

Until 2006, the few connections that existed suffered from unreliable service and high electricity prices, making it difficult for homes to provide quality lighting, for clinics to offer needed services, and for businesses to grow.

“To date, we have only about 97,000 connections and that constitutes about 6 percent of the people in this country, only, and that is a very serious situation,” said Albert Butare, Rwandan Minister of State in charge of Energy.

The owner of one cyber café, hooked to the country’s electrical grid, laments the high price of the limited commodity.  Any new source of energy, such as the planned hydro-electric plant at Rusumo Falls, or the Lake Kivu methane gas power plant, should translate into more electricity, for more people, for less money, he said.

“Yes of course, if there will be more availability, there will be a reduction in the cost, and if we have electricity for less, that would be good,” the owner said.

Since the end of 2004 through today, a number of different initiatives show encouraging results.

For example, although electricity tariffs remain high, they have remained stable since 2005, almost reaching the regional commercial category tariff.  And load shedding, or rolling blackouts, is no longer a real problem. 

Rwanda’s limited power supply currently comes mainly from domestic hydropower, a small sum of solar energy, and costly diesel-fired power plants, needed to ease the energy crisis and bridge the gap between energy demand and supply until other least-cost power-generating plants, like the methane gas power plant, can be developed.

The Government of Rwanda views modern energy as a critical component of the country’s national, social, and economic development.  It is for that reason, that in collaboration with the World Bank, the Energy Sector Management Assistance Program (ESMAP), and with other partners, the Government has embarked on developing the country’s energy sector as a whole in planning, monitoring, and in allocation of resources.

This Sector Wide Approach, or SWAP, signed at a recent ceremony in Kigali and supported by the World Bank, ESMAP, and other partners, supports a common program of work in which strategy, policy development, planning, implementation, monitoring, review, and capacity-building are carried out as a joint effort through consultation between government, development, and civil society partners.

The approach will provide an anchor for potential financiers to engage with the Government in a systematic manner to raise the appropriate projected financing requirements.

The SWAP will focus on developing national grid-based electrification complemented with least-cost off-grid options with an emphasis on renewable energy. In addition to connecting households and businesses, Rwanda’s objective is to deliver electricity to rural public institutions, such as schools and health centers. It will also consider national and regional generation projects, mainly in methane gas power and hydropower  to ensure access to adequate and cost effective supply. 

The overall investment envelope for the first SWAP period September 2009-2012 is being detailed in the ongoing Prospectus preparation work by a Consultant team financed by ESMAP. In order of magnitude terms it is expected to be about $200million for the time slice identified; including grid and off-grid investments, technical assistance, excluding grid generation.  The sources of funds besides IDA include: Government, Electrogaz, customer connection charges, and major Donors such as AFDB, EU, Belgium, Netherlands, and others.

“By the year 2020, we should be able to be providing in excess of 36 to 40 percent access in the whole of the country and this is something -- that there is commitment on the part of the government, total commitment, and there is interest and commitment on the part of the donors,” said Mr. John Milenge, Director General of Electrogaz, a public utility for production, transmission and distribution of Water and Electricity in Rwanda.

And such commitment, say officials, can only mean a brighter future for Rwanda.

Contact

Christopher Walsh

Related Links

• VIDEO: A Brighter Future for Rwanda

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