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OVERVIEW OF RWANDA’S ENERGY SECTOR: CURRENT STATUS AND FUTURE TRENDS TO 2017

Introduction

Rwanda’s economy grew at an annual average rate of 8.3% over the past 5 years and government is targeting to achieve 11.5% annual average growth over the EDPRS II period (2013-2017). Rwanda’s second Economic Development and Poverty Reduction Strategy (EDPRS II) enshrined in four thematic areas, aims at achieving rapid economic growth, rural development, productivity and youth employment, and accountable governance. Access to affordable and modern sources of energy is essential to the achievement of the above development objectives.

The current status and planned growth trend of Rwanda’s energy sector by 2017

Presently, 85% of the overall primary energy consumption in Rwanda is from biomass, 11% from petroleum products and a meagre 4% from electricity. The annual average per capita consumption of electricity in the developing world is 1,155 kWh compared to 10,198 kWh in high income countries. Sub Saharan Africa averages 457 kWh, and that figure falls to 124 kWh if South Africa is excluded. In Rwanda the per capita energy consumption is only 41 kWh which explains the overdependence on wood-fuel.

However, with a more prudent energy mix including peat, geothermal, hydro, and solar, methane gas and increased use of Liquefied Petroleum Gas (LPG), biogas and improved cook stoves, the above over dependence on Biomass is expected to fundamentally reduce to 55% by 2017 and to 50% by 2020.

The country’s installed capacity has increased tremendously over the last two decades from 25 MW in 1994 to the current 115 MW. The national electricity generation mix is currently composed of mostly hydro (53%), thermal (46%) with a small percentage from methane and Solar. The high cost of fuel consumption estimated at $40 million annually has made government electricity subsidies inevitable to keep electricity tariffs in Rwanda in a comparable range to the retail tariff of US$0.12 – US$0.18 in the region.

The planned generation mix by 2017 comprised mainly of peat (255 MW), methane (75 MW), hydro (140) and solar (18.5 MW)

Although the electricity access level in Rwanda is still low compared to Africa’s and Sub Saharan Africa’s average access rates of 40% and 31% respectively, the country’s electricity access rate has more than tripled from 5% in 2005 to the current access rate of18%. With the Electricity Access Rollout Programme (EARP) under implementation since 2009, supported by several partners (WB, AFD, BADEA, OFID, BTC, JICA, SAUDI FUND, NORDIC FUND etc), coupled with increased generation, access is expected to increase to 70% by 2017. Current network length: 3,932km MV, 2000 km LV & 1,228km HV. The network is being expanding to meet the 70% access target. To achieve the above access rate target above by 2017 (Ref. Energy Sector Strategic Plan 2013-2017), Rwanda will explore both on-grid and off-grid solutions ranging from solar home systems to small off-grid hydro installations. A global estimated investment capital of $2.8 billion is required to achieve the planned generation i.e. 563 MW and 70% access by 2017. It is critical to note here that $1.3 billion of the above required capital investment is expected to come from private investments in the energy sector with the rest being public investment.

With a more balanced generation mix and regional interconnections, Rwanda also plans to import power from destinations such as Ethiopia and discussions are already ongoing. The country’s increased generation capacity mainly from hydro, peat, methane and solar coupled with importation of cheaper power is expected to enable a gradual downsizing and phasing-out of thermal generation from 2018. The ongoing interconnection projects with Democratic Republic of Congo, Uganda and Burundi, Rwanda’s membership into the Eastern African Power Pool (EAPP) as and the three (3) regional hydro projects i.e. Rusumo (80 MW), Rusizi III (137 MW) and Rusizi IV (287 MW) will also boost Rwanda’s energy sector providing the supply routes and reserve energy to cater for the expected double digit annual economic growth.

Major challenges to Rwanda’s Energy Sector

Three major challenges facing the energy sector are the demand-supply balance, inadequate financing and expensive thermal power. Currently, the power demand is almost equal to the available capacity which leaves hardly any reserve margin. However, more than 40 MW is expected to be installed onto the grid by June 2014. The Government of Rwanda through Rwanda Development Board (RDB) is mobilizing local and foreign private investors to invest into the sector to supplement public investments. Investment opportunities in Rwanda’s energy sector.

Rwanda’s energy sector boasts of a great deal of untapped resources for power generation. Potentials include:

• Hydro power: Hydro currently constitutes the largest source of energy and is expected to remain a major source for a foreseeable future. As per the hydro atlas, there exists more than 300 micro and pico hydro sites in different parts of the country. Available hydropower potential from local sites is estimated at more than 100 MW. Feasibility Studies for up to 40 micro hydro sites are available. Investment opportunities also exist for some regional hydro projects (Rusizi III (137 MW) and Rusizi IV (287 MW) expected to come on stream before 2025.

• Methane Gas: The methane in Lake Kivu is estimated to be sufficient to generate 700 MW of electricity over a period of 55 years. Currently a 4.2 MW pilot plant is in operation while another 3.6 MW is under construction by a local company. Another 25 MW owned by an international investor is about to be completed. Potential investment opportunities exist for an additional 50-100 MW of power from methane.

• Peat: The potential for electricity energy generation from peat is estimated to be at least 400 MW. Rwanda plans to develop its peat resources to generate about 255 MW of power by 2017. Three projects are currently on the right track i.e. the

government funded Gishoma (15 MW) peat plant, 120 MW independent Power Producer by a Turkish investor.

• Solar energy: With a potential of 4.5 kWh per m2 per day and approximately 5 peak sun hours, solar energy has a huge potentiality in Rwanda. The country has already engaged into solar solutions as a lighting substitute for remote areas for ICT in schools, clinics and hospitals. Solar water heaters could be used for water heating to reduce the consumption of electricity in hospitality, clinics, hospitals and catering services and households. Investment opportunities exist in solar mini grid and solar off-grid systems

• Waste-to-Power: Kigali city produces around 450 tons per day of solid waste of which between 300 and 350 tons/day is centrally collected. The fraction of organic waste comes from households, restaurants, hotels and markets, agricultural waste, livestock waste, water hyacinth etc. It is estimated that 100 tons per day of raw municipal solid can produce 1MW, using traditional thermal technologies. The population in Kigali is expected to reach about 1.5 million by 2020. It is believed that the waste collected will reach about 1000 t per day. There is therefore currently an est. 5 MW investment opportunities in waste-to-power. By 2020, the opportunity will stand at 10 MW. The Ministry of Infrastructure and Kigali City coordinate waste-to-power investments

• Geothermal energy: Geothermal energy in Rwanda’s volcanic area of the Northern Province and the Western Province are estimated to have a generation capacity of between 170 MW and 320 MW respectively. Exploratory drilling on the first two wells has been completed on Karisimbi prospect and results are being analyzed to guide the way-forward for future geothermal exploration. If the resource is proven, investment opportunities could be available for private investors at Bugarama, Gisenyi and Kinigi prospects.

• Wind-to-Power : A wind potential assessment on 5 potential sites including Lake Kivu areas, Karisimbi/Gishwati, Gicumbi area, Eastern and Western Provinces is planned for FY 2014/2015. This assessment is expected to identify viable wind energy sites for potential private investments.

CONTACTS FOR MORE INFO:

NAMES

TITLE

EMAIL/TEL

1.

Robert NYAMVUMBA

Deputy Director General in charge of Energy

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2.

Vincent MPAKA

Head of Electricity Utility

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3.

Ronny Carbonnel

Head of Investment Unit

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4.

Wilson KAREGYEYA

Counterpart in the Investment Unit

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5.

Edward KASUMBA

Coordinator of Electricity Access Roll-Out Program (EARP)

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6.

Peace KALIISA

Donor and External Links Coordinator – Ministry of Infrastructure

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