BOREnergy_Rwanda2020
BOREnergy_Rwanda2020
BOREnergy_Rwanda2020
ACCESS TO ENERGY
52%
12.9 million
governmental aim by
2020 2024
38% access to a
2015 … 2017 2018 … 2020 … 2024
48%
grid connection line
/ aimed 52%
11% 14%3
14%
off-grid line1
connected to an
/ aimed 48% 0%
2015 … … 2018 … 2020 … 2024
CAPACITY
12.35 MW
15.72 MW
3.37 MW
31.44 MW
101.07 MW
methane gas
diesel peat
hydro solar
ENERGY CONSUMPTION
Rural 9.9 kWh Urban8 29.2 kWh 1 Head of Infrastructure Section Lénaïc Georgelin, 2020; When applying IEA standards,
this percentage is 49.1.
2 These percentages are lower when taking into account the World Bank standard that
electricity should be available for at least four hours during the day and one hour at
night. Applying these standards, only 26.8 percent was connected in 2020.
3 MinInfra, 2018; REG, 2019.
4 REG, 2019.
5 USAID, 2019; RDB, 2017.
2000 RWF/month 4700 RWF/month 6 REG, 2019.
~ 2.15 USD ~ 5.05 USD9 7 Inefficient fuels for cooking are wood, charcoal, coal and kerosene (Clean Cooking
Alliance, n.d.); MinInfra: Biomass Strategy, 2019.
8 Extensive research was conducted for the ‘Rwanda Beyond Connections’ report
Average 20.8 kWh/month based on the multi-tier framework (World Bank in cooperation with AfDB and UN) to
study electricity consumption, affordability and willingness to pay in 2017.
9 World Bank, 2018.
Business
opportunities
Figure 1. ENERGY ACCESS RWANDA BASED ON GRID ACCESS VS. GRID +
OFF-GRID ACCESS IN THE PERIOD 2005–2024 (SOURCE: WORLD BANK,
ON-GRID ELECTRIFICATION
2017 AND MINISTRY OF INFRASTRUCTURE, 2018)
1. Introduction
ADF African Development Fund
AfDB African Development Bank
DRC Democratic Republic of Congo
EARP Energy Access Roll-out Programme
This report will explore investment opportunities for Dutch and other EDCL Energy Development Corporation Limited
local or foreign businesses in the energy sector. Sustainable Development ESSP Energy Sector Strategic Plan
Goal (SDG) 7: ‘Ensure access to affordable, reliable, sustainable and EU European Union
EUCL Energy Utility Corporation Limited
modern energy for all’ is a top priority for the Rwandan government. The
GACC Global Alliance for Clean Cookstoves
Rwandan government aims to reach universal access to electricity for GDP Gross Domestic Product
the population by 2024. This agenda offers opportunities for the private ICS Improved Cookstove
sector. Rwanda is moving through a phase of transition. The country IEC International Electrotechnical Commission
seeks to develop equitable relationships with other countries moving IEA International Energy Agency
IPP Independent Power Producer
from aid to trade. This report seeks to evaluate investment opportuni-
JICA Japan International Cooperation Agency
ties along the aid and trade spectrum: some of these business models
KV Kilovolt
can be market-driven whilst others will require subsidies. Many energy KW Kilowatt
projects depend on external funding, and low-income rural households KWh Kilowatt hour
often need funding mechanisms in order to afford the basic electricity LCPDP Least Cost Power Development Plan
services offered by private energy businesses. Therefore, close collab- LPG Liquefied Petroleum Gas
LV Low Voltage
oration between public and private stakeholders is very important.
MinEcoFin Ministry of Finance and Economic Planning
MinInfra Ministry of Infrastructure Rwanda
MoMo Mobile Money
RWANDAN CONTEXT MV Medium Voltage
MW Megawatt
NELSAP Nile Equatorial Lakes Subsidiary Action Program
Rwanda is one of the smallest, most densely populated countries on the
NEP National Electrification Plan
African continent. Around 12.5 million people live in an area of 26,338 square
PAYG Pay As You Go
kilometres.10 Eighty percent of the Rwandan population lives in remote, rural PV Photovoltaic
areas. Therefore, it is difficult and expensive to connect them to the national RBF Results-Based Financing
grid. Also, purchasing power of the Rwandan population remains low. In 2016, REG Rwanda Energy Group
55.5 percent of the Rwandan population was living below the poverty rate RES Rural Electrification Strategy
RURA Rwanda Utilities Regulatory Authority
earning 57�59 USD per month. Meanwhile, the price range for a medi-
RWF Rwandan Franc
um-size Solar Home System (SHS) sold on the local market was 50�100 USD. SACCO Savings and Credit Cooperative Organization
SDG Sustainable Development Goal
SHS Solar Home System
SLS Solar Lighting System
SREP Scaling Up Renewable Energy Program
USD United States Dollar
W Watt
10 Koo et al.: Rwanda Beyond Borders, 2018. WHO World Health Organization
WTP Willingness to Pay
%
60
50
40
30
20
10
0
New on-grid connections 163,914 148,201 160,466 173,624 187,472 202,734
and share of on-grid access 100
90
80
70
%
60
50
40
30
20
10
0
New off-grid connections 283,507 220,262 271,266 255,706 274,286 293,938
and share of off-grid access 100
90
80
70
%
60
50
40
30
20
1.5 1.8 2.3 2.7 3.2 3.7 10
0
In 2020, Rwanda has an installed on-grid energy capacity of 224.6 mega- INSTALLED CAPACITY24
watt (MW) plus an installed off-grid capacity of 19.95 MW (mostly from DRC & Uganda
SHS).19 By 2023/24, the combined on-grid and off-grid capacity should 3.37
224.6 MW
The Rwandan on-grid generation capacity has tripled since 2010.
The current installed capacity of 224.6 megawatt comes from five
energy sources: 101 MW installed hydroelectric capacity, 60 MW
capacity from diesel resources, 31 MW from methane gas resources,
15.5 MW from peat resources and 12.5 MW from solar resources.
An additional 3.5 megawatt is imported from DRC and Uganda.21
Installed off-grid capacity is much lower than grid capacity. Off-grid elec-
tricity in Rwanda is generated through SHS and mini-grids. The latter type
generates energy through solar PV or hydropower. In 2018, there were
27 companies distributing SHS and nine companies installing mini-grids.
Overall, the installed mini-grids (both hydro and solar) have a total capacity 101.07 MW 60.64 MW 31.44 MW 15.72 12.35
Most investment opportunities for the private sector seem to exist in the
off-grid electrification. The Rwandan government is investing in on-grid 19 REG, 2019.
20 RDB, 2017; USAID, 2019.
projects to raise the electrification rate. In remote, rural areas, it is too 21 REG, 2019.
expensive to establish grid connections and hence, innovative solutions 22 REG, 2019.
are required. The government has called upon the private sector to help 23 MinInfra: ESSP, 2018.
24 The website of REG (2020) states the ‘available capacity’ (rather than the installed
provide energy access for all Rwandan residents and businesses.23 Busi-
capacity) is currently: 88.41 MW hydro (39%), 43.07 MW thermal (diesel) (19%), 56.68 MW
nesses can develop technologies and business models suited for these methane gas (25%), 24.94 MW import (11%), 4.53 MW solar (2%), 9,07 MW peat (4%).
challenging target groups in the electricity and biomass subsector. The data regarding installed capacity was collected during an interview with REG.
environment
HOUSEHOLDS
CONNECTED
Three types of stakeholders can be distinguished in the energy sector,
namely: public sector, independent power producers (IPPs) and consumers.
2019
On-grid projects are generally large-scale investments managed by the
government (in collaboration with a foreign IPP) and funded through loans.
These projects include the construction of new plants as well as the upgrading
of existing plants and transmission lines. Off-grid projects tend to be small-
scale and are frequently aid-based implemented by IPPs in rural, remote areas.
Southern Province26,27 31% + 16%
Please review Annexe 1 for an overview of categorized donors for off-grid,
on-grid and clean cooking. Please review Annexe 2 for an overview
of development organisations supporting energy projects in Rwanda.
The division of grid and off-grid connections in Rwanda is strictly regulated the NEP clarifies in which areas IPPs can and in which areas they cannot
by the National Electrification Plan (NEP). The NEP determines in a highly target potential customers. The NEP only distinguishes between grid and
detailed manner where grid connection lines have been and should be off-grid areas. Hence, the type of off-grid source, a mini-grid or SHS, does
installed. The Plan shows grid lines are already present or planned in most not matter.25 This means that off-grid energy suppliers ‘share’ these areas.
areas. By contrast, off-grid areas are scattered; mini-grid areas are also
scarce because the number of permits is limited. In ‘grid extension zones,’ 25 Personal communication GIZ, 2020.
investors must refrain from the instalment of off-grid connections. Hence, 26 REG, 2019.
27 REG, 2019.
LEGEND
Umuwalimu SACCO
Existing and ongoing MV
NEP Category
Crossed by MV
Grid Extension
Off-grid
Administratives
Waterbodies
National Park
District boundary
Sector boundary
The public sector actors are the Ministry of Finance and Economic Planning
(MinEcoFin) and MinInfra; policymakers shaping the enabling environment. ECONOMIC CLUSTER
MinEcoFin allocates the budget for energy investments and operations.
MinInfra develops energy policies and targets, which must be aligned with
MINECOFIN
the SDGs. Subsequently, projects are executed by the Rwanda Energy Group Ministry of Economics and Finance
(REG). REG is the national utility company in Rwanda and owned by the
government. REG is divided into two departments: Energy Utility Corpora- MININFRA RURA
Budget Rwanda
tion Limited (EUCL) and Energy Development Corporation Limited (EDCL). Ministry of Infrastructure
Transfers to REG Utilities
for investment Regulatory
and operations Agency
EUCL is responsible for the operationalisation and maintenance of grid connec- REG
Rwanda Energy Group Regulated by
tion lines in Rwanda. They generate, transmit, and distribute energy to RURA
customers. EDCL is in charge of public investments in new energy generation IPPs Electricity Electricity
projects. EDCL is the main contact for private energy investors that want to Private EUCL
CONSUM-
sector Energy Utility ERS
operate in the field of energy, both on-grid/off-grid and clean cooking. Rwanda power Corporation Limited
suppliers Payments Payment
Utilities Regulatory Authority (RURA) sets the tariffs for energy prices in Rwanda. (Capacity + via billing
Energy Charges) Assets
(Genertation, T&D)
Furthermore, EDCL develops the Energy Access Roll-out Programme (EARP),
EDCL
in which the expansion of access to electricity in Rwanda is planned. The EARP Energy Development
is funded by the Rwandan government and development partners like African Corporation Limited
Development Bank (AfDB) and the European Union (EU). There are additional
non-governmental funds supplied by grants or loans from independent donors.28
gas generation facility at Lake Kivu as well as large solar and peat generation Large 80
>660.000 kWh/year 94
sites. By contrast, off-grid electrification is done via several smaller projects
scattered throughout the country by a variety of companies. Off-grid
IPPs are mostly involved in renewable energy projects: solar and hydro
power. There are also several IPPs involved in the clean cooking sector. NON-RESIDENTIAL
28 MinInfra, 2018.
29 These prices are based on industrial users with a smart meter. Without a smart
meter, a flat rate is charged which increases costs per kWh with approximately fifteen
percent, 2020.
2000 RWF
~ 2.15 USD 4700 RWF
1,902,800 4,721,000 5,410,200 152,700
~ 5.05 USD31
people people people people
30 For the ‘Rwanda Beyond Connections’ report based on the multi-tier framework
(World Bank in cooperation with AfDB and UN), extensive research was done on
electricity consumption, affordability and willingness to pay in 2017.
31 World Bank, 2018.
32 Government of Rwanda, n.d.
33 Local Administrative Entities Development Agency, 2020.
from river runs and lakes, and their details are visible in the map below:
34 REG, 2019.
35 MinInfra, 2018.
36 MinInfra, 2018. Ntakura Power Station
(Lake Burera, Northern Province)
Coordinates: GQF2+34 Ruhondo, Rwanda
Installed capacity: 11.5 MW
Operational capacity: 2.6 MW
OP MAX Date of installation: 1959
Mukungwa I Power Station
(Lake Ruhondo, Northern Province)
Coordinates: CM93+8X Nyakinama, Rwanda
Installed capacity: 12 MW
Operational capacity: 6 MW
OP MAX Date of installation: 1982
Seven percent of energy is generated using peat. The first peat power
plant in Rwanda was completed in 2017; it was a pilot project and the
first of its kind in Africa. The plant is located in Gishoma, South-West
Rwanda and generates 15 MW electricity supplying the national grid.
A second, larger plant with a capacity of 72 MW is currently under
construction. The new power plant is located in Gisagara, Southern
Province and owned by Turkish Mining and Electricity company Hakan.
SOLAR
Nasho Solar PP
SOLAR POWER
PEAT POWER
Energy imports are very small with 1.6 percent of the on-grid electricity The wiring of the energy distribution network in Rwanda is 16,000 km long,
being imported from Uganda and DRC.45 2 MW of electricity is imported via of which 35 percent is covered by MV lines and 65 percent by LV lines.50
the Kawanda-Birembo High Voltage Power Transmission Line. This project Currently, the distribution network has a suboptimal performance demon-
is part of the Nile Equatorial Lakes Subsidiary Action Program (NELSAP) of strated by the number of power outages each year. In 2016–2017, REG
East-African countries. The power line starts in Kawanda, Uganda and ends customers faced power outages for 36 hours on average. The aim is to reduce
in Gasabo district in Kigali.46 This project is financed by AfDB and Japan Inter- this number to fourteen hours by 2024.51 91.7 percent of grid-connected
national Cooperation Agency (JICA). 3.5 MW electricity is imported from the households experience more than four interruptions in electricity supply each
Ruzizi I power plant in DRC. This plant can generate 30 MW of electricity week.52 This number includes both urban and rural areas, but outages seem
and has been operational since 1957. The aim of the Rwandan government to occur more often in urban areas because of the grid-connection density.
is to phase out imports from DRC. Rwanda does not seek to increase energy
imports in the future with the exception of the regional projects of the NELSAP. The government has launched various projects to reduce power outages.
Several rehabilitation and expansion projects of the LV and MV networks
have started. 350 km of wiring will be added to the distribution network.
The government is also upgrading substations linking transmission and distri-
TRANSMISSION OF ENERGY bution networks. Electricity connections for non-residential and industrial
users (public, commercial centres, factories, hotels and offices) are prioritised
The transmission network transports generated electricity from the main because the marginal costs are relatively low in comparison to households in
source to sub-stations, after which electricity is distributed to end-users. scattered, remote areas. Moreover, residential users consume a low amount of
Existing transmission lines in Rwanda are mainly 110 kilovolt (kV) and 220 kV electricity, which reduces the incentive to target this group. The government
and new transmission lines will support the same voltage. Between 2010 and aims to connect all productive users by 2022. Also, the districts of Huye and
2017, the length of transmission lines in Rwanda increased from 462 km to Gisagara have a high priority since access to electricity is very low in these areas.
744 km. Moreover, there are sixteen planned projects to further expand the
transmission network, for which funding has already been secured. Addition-
ally, there are twenty projects in the pipeline, for which funding has not been
secured. These projects support expansion of transmission lines throughout FUNDING MECHANISMS
the entire country but the Kigali ring has been prioritised since 2016.
The government mostly uses mixed funding mechanisms blending govern-
Transmission and distribution lines are not fully efficient: in 2018, capacity ment, development partners and private investors resources to finance
losses were estimated to be around 22 percent. Goal is to reduce this to transmission and distribution projects. The projects require large capital
fifteen percent by 2024. To compare: capacity losses in transmission lines in investments, for which the government wants to involve development
the Netherlands were 4.8 percent in 2014, and global average is 8.5 percent.47 partners and the private sector as well. Transmission projects are mainly
funded by the Rwandan government, AfDB and African Development
Annually, approximately 22 percent of transmissions are lost. The financial costs Fund (ADF). The biggest challenge is to mobilise funds for new trans-
are currently estimated at 28 million USD and can increase to 102 million USD mission projects. No funding has been secured for the 2020 projects
considering rapidly growing energy production and consumption rates.48 and this can result in severe delays; especially considering the impact
Losses are mainly caused by technical problems. Many transmission lines of the COVID-19 pandemic on economic growth around the world.
consist of long medium voltage (MV) feeders, low voltage (LV) lines and
inefficient single-phase lines.49 Moreover, deficient planning results in
the incompatibility of lines or inefficient connections. Finally, poor work-
manship and old equipment are considered as major cause of technical
losses. Furthermore, there are also commercial losses resulting from faulty
accounting and record-keeping, theft and non-payment by customers.
Especially, non-payment by large customers causes major financial losses.
45 REG, 2019.
46 UETCL, 2019.
47 World Bank, 2018.
48 MinInfra, 2018.
49 MinInfra, 2018.
50 REG, 2019.
51 This number only concerns officially registered long-lasting outages. Additionally,
many Rwandans experience (short) outages in rainy periods.
52 Rwanda Beyond Connections, World Bank, 2018.
49.6%
receive electricity
23 HOURS a day, 7 DAYS a week
4. Opportunities • At the moment, there are no open tenders. Suppliers might be able to
provide services or inputs for projects such as equipment, consultancies
in on-grid electri-
and training. Rwandan government has awarded nine large-scale (>5 MW)
projects and twelve small-scale (<5 MW) projects to increase the MW
generation capacity in Rwanda. Two large-scale projects are regional
Transmission lines
In the past years, on-grid electrification has been the main focus in Rwanda
• There are over seventeen projects ongoing aiming to upgrade and expand
whereas the off-grid and clean cooking sector are still in the early stages
the transmission line network. Several of these projects still require
of development. Consequently, the on-grid sector has matured, energy
funding. Opportunities exist in realizing the infrastructure development,
supply is plentiful and investment opportunities are limited: many projects
providing equipment, technical support, projects design and training of
are planned or ongoing. The installed capacity of MW will provide an
technicians.
energy surplus following the completion of multiple large-scale national
• Transmission network requires general improvement. MV and LV lines
and regional projects. Rwanda follows the regional trend of oversupply.
need to be shortened to reduce inefficiency and losses.
At this point, the government is not approving new projects nor signing
new contracts. The main challenge is the financing of the planned (and
Substations
ongoing) hydro and peat projects, which are at risk of being delayed.
• Most operational substations are outdated and cause bad connections.
The number of outages (which currently run at 36 hours a year) can
There are opportunities in terms of improving and laying out transmission
be reduced through the upgrading of substations and improving linkages
lines. REG is working on the improvement of transmission lines but is in need
with the transmission network.
of investors and/or international donors to expand its operations. Therefore,
• In remote areas with poor grid connections, productive users and or
opportunities exist related to infrastructure development and equipment.
public institutions could serve as substations. This would allow for
Also, opportunities exist with regard to technical support, projects design
connecting currently off-grid households and improve the connectedness
and training of technicians. The Rwandan government has currently sixteen
of already on-grid households.
transmission projects ongoing, which are partly funded by AfDB, EU and
the German National Development Bank KfW.54 Transmission projects with
Smart Meters
an approximate value of 50 million are in the pipeline and require funding.
• Non-payment rates of customers are rather high. An opportunity lies in the
distribution of smart meters to avoid non-payment by large(r) customers.
• Accounting and record-keeping are a burdensome task and the processes
are prone to mistakes. Smart meters can reduce financial errors resulting
from miscalculations.
Awareness
• 6.5 percent of electricity generation is lost due to commercial losses.
A large share of these losses is caused by illegally tapping electricity
from the national net. Companies can collaborate with the government
to raise awareness on the risks of energy theft. Illegally tapping energy
can be extremely dangerous, especially when electricity is drained from
MV or HV lines.
54 For the distribution projects, 1,5 milion USD is provided by MinEcoFin (Rwanda),
73 million USD by AfDB, 3.4 million by the World Bank, 11 million by Enabel. About
46.4 million USD still needs to be raised.
Moreover, the Rural Electrification Strategy (RES) and NEP have target groups are low-income households with low consumption rates.
delegated the responsibility for off-grid development to IPPs. Looking at the existing policies and future plans, main focus is on the
The RES extensively describes the role of the private sector as development of SHS and more specifically, stand-alone solar systems.
a key player and the possibilities to obtain financial support
from the government. The RES is divided into four programmes:
SOLAR HOME SYSTEMS
• Establishment of a mechanism to allow low-income households to ac-
cess modern energy services through basic solar systems; The climate in Rwanda is suitable for SHS with slight seasonal variation:
• Establishment of a risk-mitigation facility for the private sector to make daily solar irradiation ranges from 4 kWh/m2 in the north to 5.4 kWh/m2
sure solar products are available on an affordable tariff for the target in the south of the country.56 The Eastern and Southern Province have
group; the highest potential for solar power. There are different types of SHS
• Development of mini-grids by the private sector with a strict overview of ranging from Solar Lighting System (SLS) powering two or more light
the government, who identifies sites for the grids, and development of bulbs and have a phone charging capability, to SHS powering two or
financial frameworks; more light bulbs and appliances such as a television, iron, microwave,
• Government continues to focus on EARP. or refrigerator.57 Most Rwandans with an off-grid electricity connection
use a stand-alone SHS; there is no connection to the grid whatsoever.
After the launch of the RES and NEP, there was an impressive increase
in households, mainly rural, being connected to off-grid sources. This
rapid increase was mostly realised through SHS and to a lesser extent 55 MinInfra, 2018; REG, 2019.
by the more recent development of mini-grids. The government recog- 56 Get.Invest, n.d.
57 Rwanda Beyond Connections, 2018.
nises the high costs of off-grid electrification remain problem since most
Meanwhile, the price range for a medium-size SHS was 50–100 USD. The
main business model is Pay As You Go (PAYG): this modality is used for 96 In addition to the subsidy scheme for consumers, the government
percent of off-grid SHS sales.61 PAYG requires customers to make daily or has developed financial support system for investors (IPPs) called the
weekly instalment payments (usually) through Mobile Money (MoMo). Scaling up Renewable Energy Program (SREP) fund. This programme
The SHS company has the ability to disable the system if the required has not yet been launched. It will offer the following ways of support67:
amount has not been paid.62 The PAYG system is designed to mitigate
risks associated with giving loans to customers with no credit history; • Companies have access to risk mitigation facilities for SHS bought by
the prepaid system takes away the risk of non-payment of high costs.63 households and productive users in Ubudehe tiers 2, 3 and 4.68
Nonetheless, it seems difficult to keep default rates and non-payment • Companies investing in SHS can acquire loans to invest in their SHS business.
low when households with lower and irregular incomes are reached.64 • Households in Ubudehe tiers 2, 3 and 4 can get a loan from the Savings
and Credit Cooperatives (SACCO) to buy a SHS. Loans are already being
At the moment, SHS are distributed by both local and foreign private provided.69
sector investors.65 Many SHS companies are from Europe and North
America. Most SHS kits are produced in China. A Dutch company, NOTS,
is planning on moving assembly activities and subsequently, produc-
tion of SHS to Rwanda.66 Often these companies have received grants or
lenient loans from development organisations, larger private companies
58 LED, >120 lumens, 2 W power consumption and >20,000 lifetime hours.
or universities. Furthermore, the Rwandan government is developing 59 Crystalline or Poly Si, 12/24/48 V and minimum 12-Watt Peak.
two financial schemes to raise household access to SHS: a subsidy 60 Deep cycle, maintenance free, storage capacity of 60 Wh and depth of discharge of
80 percent.
scheme targeting consumers and a support scheme targeting producers.
61 EnDev, 2018.
62 Power Africa, 2019.
The SHS subsidy scheme for consumers is based on the Ubudehe cate- 63 Power Africa, 2019.
gories. It targets households in tier 1, 2 and 3; no subsidies are provided 64 EnDev, 2018.
65 The following SHS companies are active in Rwanda: Aptech Africa (UG), Ared (IT/
to households in tier 4 and 5. Most support will be available for the most RW), Azuri (UK), BBOXX (UK), DASSY Enterprise (RW), Davis and Shirtliff (RW), Great
affordable SHS products developed for households in the lowest tier. The Lakes Energy (RW), Ignite (UK/US), Mobisol (DE), Munyax (BE), NOTS solar lamps (NL),
support plans were announced in 2019 but have not been implemented yet. RENERG (DE), Serve and Smile LTD (RW) and Zola (US).
66 NOTS, 2020.
67 MinInfra, 2019.
68 Facilities will be (partly) funded by the SREP. SREP has a total budget of 50 million USD
fund assigned to rural electricity access expansion.
69 It is expected households in Ubudehe tier 2 and 3 will no longer need loans once the
subsidy scheme is introduced. Households in Ubudehe tier 4 cannot make use of the
subsidy scheme and can continue to access loans.
The market of mini-grid supply in Rwanda is still in the early stages of devel-
opment. There are currently six companies operating in Rwanda (Table 2).
No of
Headquarter
Company Technology Location Size households Grant support
locations
connected
74 MinInfra, 2019.
75 Facilities will be (partly) funded by the Scaling Up Renewable Energy Program in Low
Income Countries (SREP). SREP has a total budget of 50 million USD fund assigned to
rural electricity access expansion.
76 Nano-grids can generate 1 kW or less, and mini-grids generate above 1 kW electricity.
77 All 57 nano-grids were developed by Mesh Power.
78 Pico-hydro grids are those mini-grids with a power of less than 5 kW.
in off-grid electri- • In 2016, 55.5 percent of the Rwandan population was living below the
poverty rate earning 57-59 USD per month. Meanwhile, the price range
fication
for a medium-size SHS sold on the local market was 50–100 USD.
ͷͷ Improve the cost-efficiency of SHS products and especially, reduce
operating expenses to increase affordability.
There are major market opportunities in off-grid electrification in Rwanda • Most households are unable to afford their own SHS, but they might be
considering the urgent need to connect a high number of remote house- able to share one.
holds: so far only fourteen percent of the Rwandan population has been ͷͷ Explore opportunities to create SHS that can be shared by multiple
connected to an off-grid source, meaning another 34 percent (approximately households in terms of design and business model.
1.2 million households) still need to be connected by 2024. Furthermore, • There are productive users (such as shops and small factories) who can
the government has put the private sector in the driving seat to realise purchase higher electricity generating SHS kits. These users could serve
quick expansion. Nonetheless, it remains a challenge to provide low-in- as a host and provide surrounding households with electricity services.
come households in remote, rural areas with access to energy. The main ͷͷ Identify unconnected productive users, who could become hosts
issues hampering the rapid distribution of SHS and mini-grids are the low for surrounding households.
have managed to break-even after 5–6 years of operations in Rwanda. • Most SHS kits are currently being sourced from China. One company is
All mini-grid companies are still dependent on loans and grants. However, investigating the option to set up a local assembly or production line.
there are planned and ongoing government and donor programmes to Preference for ‘made in Rwanda’ products can provide companies with
provide low-income households with access to energy via SHS or mini- access to investment incentives.
grids. Off-grid electrification is a domain of aid and trade solutions. ͷͷ Explore opportunities to assemble or produce SHS kits locally.
Innovative concepts are needed taking a multi-stakeholder approach • There are safety issues with affordable SHS kits on the market: stronger
engaging the private sector, government and development organizations. equipment and wires are needed to improve the quality of systems.
ͷͷ Develop stronger SHS products focusing on wiring.
Electricity Storage
• Most households do not have access to energy storage facilities, while
energy consumption rates peak at night.
ͷͷ Explore ways to improve storage capacity and to enable the sharing
of storage capacity among neighbors or productive users nearby.
clean cooking
2018/19 2019/20 2020/21 2021/22 2022/23 2023/24
100
80
60
Households 20
includes access to clean cooking facilities. The transition to clean cooking using firewood 0
is important because traditional cooking has a severe negative impact on 2500000
the natural environment and public health. Traditional cooking requires the 2000000
1500000
use of biomass, mostly firewood and charcoal, of which the sourcing is a
Households 1000000
major cause of deforestation.79 Also, biomass is a highly polluting and inef- using alterna- 500000
ficient energy source causing up to 25 percent of black carbon emissions. tive fuels
400000
Moreover, traditional stoves cause household air pollution and pose security
300000
risks; especially for women who prepare the family meals. Cooking facilities
200000
are qualified as ‘clean’ on the basis of World Health Organization (WHO) Households
100000
standards for household air pollution levels based on the emission levels of moved off
firewood
particulate matter and carbon monoxide. Available options for clean cooking 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24
include electricity, gas, ethanol, solar and high performing biomass stoves.
Traditionally, Rwandans only used wood as their cooking fuel. Between population uses charcoal as cooking fuel. The market of charcoal (about 150.000
1990 and 2005, the use of wood was 60 percent.80 Moreover, Rwandans tons) accounts for two percent of GDP, with a total value of 50 million USD.83 The
consume a high amount of beans, which have a long cooking time. There Rwandan government aims to reduce number of households dependent on tradi-
is still little awareness with regard to the health problems caused by tradi- tional cooking technologies by fifty percent by 2024.84 Furthermore, MinInfra has
tional cooking practices. Nowadays, even though alternatives like Liquefied developed the Biomass Energy Strategy to reduce the amount of biomass used
Petroleum Gas (LPG) are available on the market, people still prefer to in Rwanda. The strategy focuses on the improved management of wood biomass
use wood because of tradition. This is especially the case in rural areas. resources, promotion of alternative fuels and efficiency of biomass usage.
At this moment, 98 percent of the Rwandan population still uses biomass for
cooking: wood, charcoal and dung.81 91 percent of households still rely on the
most inefficient type of biomass: firewood, which households collect every
day for 40-80 minutes. On average, households consume around 1.8 tons
of firewood per year.82 The total value of wood used for cooking is difficult to
79 In Rwanda, deforestation causes erosion, landslides and floods.
measure because it is gathered rather than bought. 80 percent of the Rwandan 80 National Tree Foundation, n.d.
81 FAO, 2019.
82 FAO, 2019.
83 Global Alliance for Clean Cookstoves Rwanda Market Assessment Sector
Mapping, 2012.
84 MinInfra, 2018.
Above: Firewood-based ICS from BURN Kuniokoa (Kenya, USA) on the left;
In Kenya, the uptake of ICS has been much faster (Figure 16). This increase Charcoal-based ICS from Ecozoom (Kenya, USA) on the right.
can be explained by the fact that Kenya is a LPG-producing country, which Below: Charcoal-based ICS from GGS (Geni Green Solutions, Rwanda)
makes LPG distribution cheaper and widely available. Moreover, the usage
of Pay-As-You-Go and smart meters for LPG is widespread, which makes this
fuel more affordable for low-income groups. Kenya also has multiple factories
where ICS are being produced. Also, there is an ICS testing centre in Kenya
where official certificates are obtained for produced cookstoves. Rwandan
producers have to send stoves to Kenya for testing to obtain certification.
Transport
19.7 million USD
85 GACC, 2019.
Figure 16. ACCESS TO CLEAN FUELS AND TECHNOLOGIES FOR COOKING (% OF POPULATION) (SOURCE: WORLD BANK, 2019)
Biogas, ethanol,
high quality
Firewood, dung, twigs, leaves, rice husks, processed biomass pellets or
Emission: Fuel processed bio-
briquette, charcoal, kerosene
mass pellets or
briquettes
Significant
Veranda or a
No opening openings (large
Ventilation: More than hood is used
except for the 1 window openings below Open air
Structure 1 window to extract the
door or above height
smoke
of the door)
More than 7.5 Less than Less than 4.5 Less than
Less than 6 hours Less than 3 hours
Contact time hours 7.5 hours hours 1.5 hours
ISO's voluntary
COOKSTOVE
performance Less than 10% More than 10% More than 20% More than 30% More than 40% More than 50%
EFFICIENCY
targets (TBC)
Fuel acquisition
(through collec-
tion or purchase) Less than Less than
More than 7 hours Less than 7 hours Less than 3 hours
and preparation 1.5 hours 0.5 hour
CONVENIENCE time (hours per
week)
Stove preparation
Less than Less than Less than Less than
time (minutes More than 15 minutes
15 minutes 10 minutes 5 minutes 2 minutes
per meal)
SAFETY OF
No serious accidents over the past
PRIMARY Serious accidents over the past 12 months
year
COOKSTOVE
Primary fuel is
Primary fuel is
FUEL readily available
Primary fuel available less than 80% of the year readily available
AVAILABILITY throughout the
80% of the year
year
Rwanda already has a group of ICS suppliers.86 The government works with
several suppliers whose product quality ranges from tier 1 to 5.87 Businesses
are required to present a certificate stating the quality of the stoves.88 The main
target of the government is to reduce the number of households using tradi-
tional cooking stoves whilst raising the number of households using an improved
biomass cookstove. Improved biomass cookstoves are more energy efficient and
producing less emissions. The government appeals to the private sector for the
distribution of ICS recognising the major role of businesses to reach biomass
reduction targets. The objective of Rwanda is to distribute 300,000 ICS per year.
The main issue for the distribution is the affordability of the stoves. Businesses
should carefully consider the affordability of their product (stove) and cooking
fuel. Households spending the most time collecting cooking fuels a week (around
130 minutes) are most willing to pay for a biomass-based improved cook stove.89
However, households are only able to spend approximately 3,000 RWF
(3.20 USD).90 Moreover, companies need to develop alternative business models
or acquire external financial support because most households are unable/
unwilling to pay upfront. There are several options: installment payments are
the most common. Companies have also experimented with fixed purchasing
agreements of inputs; pellets or briquettes. Companies selling ICS using pellets
or briquettes will likely need to set up a factory to produce these themselves.
Considering these challenges, the distribution of ICS will require close collaboration
between the government, development partners and private sector. The objective
of the Rwandan government is to distribute 300,000 ICS per year. It appeals to
the private sector for the distribution of ICS recognising the major role of busi-
nesses to reach its biomass reduction targets. Hence, the government is looking
into options to provide (financial) support to customers and/or suppliers. Future
86 Two companies, Ignite and Geni Green Solutions, are operating in Rwanda (and
support will likely be provided on the basis of the target group and associated
until recently Inyenyeri). There are several other companies, which are still in their
Ubudehe categories. Also, the government designs incentives for those companies ‘initiation’ phase.
willing to produce locally or that are willing to move its headquarters to Rwanda. 87 No further information on these suppliers is available when writing this report.
However, two investors, GGS and SNV were interviewed. SNV is a Dutch NGO exploring
opportunities in the ICS sector. Geni Green Solutions is a Kigali-based company selling
tier 1–2 ICS especially in Gasabo district in Kigali, with around 6000 customers at the
moment.
88 Locally produced stoves need to be transported to Kenya since this is the nearest
place for testing the quality of stoves and acquiring a certificate.
89 Survey included 45 households living in Kigali.
90 Rwanda Beyond Connections, World Bank, 2017.
OFF-GRID ELECTRIFICATION
Acumen Capital Partners
Africa Enterprise Challenge Fund
Development Bank of Rwanda (BRD)
DFID
Energise Africa
Energising Development (EnDev)
Energy Access Ventures
Energy and Environment Partnerships Trust Fund (EEP Africa)
Fonerwa
GIZ
KawiSafi
Shell Foundation
Stichting DOEN
UNIDO
USAID/Power Africa
World Bank
ENERGISING DEVELOPMENT PARTNERSHIP (EnDev) OF I.A., GIZ, DUTCH MINISTRY OF FOREIGN AFFAIRS AND UKaid
The EnDev partnership has two phases: the first phase was operational between May 2006 and September 2009. The current second phase
is from October 2009 to December 2020. The total budget of this project is 19.4 million USD. The objective of this project is to supply
1,021,430 people with energy for lighting and electrical appliances and 20,544 people with cooking energy. This project was funded by
organisations including GIZ, the Ministry of Foreign Affairs of the Netherlands and UKaid.
In 2015 Rwanda signed a loan contract with AfDB of 138 million USD for the regional Ruzizi III hydropower plant project. This project is part of the
Program for Infrastructure Development in Africa (PIDA) and involves other EAC countries like Burundi and DRC.
In 2011 AfDB provided a loan worth 25 million USD for the development of the methane gas on-grid power plant KivuWatt phase one.
FMO
In 2011 FMO provided a loan worth 31.5 million USD for the development of the methane gas on-grid power plant KivuWatt phase one.
In 2014 FMO funded roughly 10.6 million USD for the development of the on-grid solar plant Agahozo-Shalom owned by Gigawatt Global
Rwanda Ltd.
DLA Piper Global Law Firm. (n.d.). Rwanda’s Lake Kivu: Electricity generation
Ngizwenayo, D. (2020) Interview on the energy sector.
through methane gas. Retrieved from https://www.dlapiper.com/en/moroc-
co/insights/publications/2019/11/africa-connected-issue-3/electricity-genera-
Rwagaju, L. (2020). Interview on off-grid electrification.
tion-through-methane-gas-in-rwanda/