BOREnergy_Rwanda2020

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Investment Opportunities in

the Rwandan Energy Sector


TRAIDE Rwanda

Evelien Lambooij, Thijs Rutgers, Emily ter Steeg and


Marie Fidele Umutoniwase Ndahimana
May 2020
FACT SHEET RWANDAN ENERGY SECTOR 3

Contents BUSINESS OPPORTUNITIES


Abbreviations
1. INTRODUCTION
4
5
5
Rwandan context 5
Rwandan energy sector 6
2. STAKEHOLDERS AND ENABLING ENVIRONMENT 8
National Electrification Plan 8
Public sector 9
Independent Power Producers 9
Consumers 9
3. MAJOR TRENDS IN ON-GRID ELECTRIFICATION 11
Hydroelectric power 11
Thermal power 12
Methane gas 12
Peat 13
Solar 13
Energy imports 14
Transmission of energy 14
Distribution of energy 14
Funding mechanisms 14
Grid connection fees 15
4. OPPORTUNITIES IN ON-GRID ELECTRIFICATION 16
5. MAJOR TRENDS IN OFF-GRID ELECTRIFICATION 17
Solar Home Systems 17
Mini-grids 19
6. OPPORTUNITIES IN OFF-GRID ELECTRIFICATION 21
Solar Home Systems 21
Mini-grids 22
7. MAJOR TRENDS IN CLEAN COOKING 23
8. OPPORTUNITIES IN CLEAN COOKING 27
ANNEXE 1 28
ANNEXE 2 29
REFERENCES 30
Fact sheet Rwandan energy sector

ACCESS TO ENERGY

52%

13.9 million 24% 32% 34.5% 38%2


(3.7 m households)

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

INSTALLED CAPACITY import from


Democratic Republic of
the Congo and Uganda6
2010 72.7 MW
2019 218 MW
2020 224.6 MW + 19.95 MW4 14% 27% 45% 5.5 7% 1.5
2023-24 556 MW5

12.35 MW

15.72 MW

3.37 MW
31.44 MW

includes a reserve margin of 15%


60.64 MW

101.07 MW

INEFFICIENT COOKING SOLUTIONS

2020 98% aim for 20247 42%

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)

• 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 projects, in-
volving other East-African countries.
• At the moment, there are no open tenders. Suppliers might be able to
provide services or inputs for projects such as equipment, consultancies
and training.
• There are over seventeen projects ongoing aiming to upgrade and ex-
pand the transmission line network. Several of these projects still require
funding. Opportunities exist in realising the infrastructure development, Grid + Off-grid Grid Access
providing equipment, technical support, projects design and training of Access (%) ONLY (%)
technicians.

OFF-GRID ELECTRIFICATION Mini-grids

Solar Home Systems Product development


• Benefit from falling international market prices of solar PV panels. Im-
Product development proved cost-efficiency thanks to reduced costs of equipment generates
• Explore opportunities to create Solar Home Systems that can be shared opportunities.
by multiple households in terms of design and business model. In 2016,
55.5 percent of the Rwandan population was living below the poverty Financial model
rate earning 57–59 USD per month. Meanwhile, the price range for a • Tap into blended finance to fund mini-grid development engaging donors,
medium-size Solar Home System sold on the local market was 50–100 USD. public and private actors. Financial support for SHS companies will be-
Most households do not have the means to purchase their own Solar come available via the Scaling Up Renewable Energy Program fund,
Home System. which is expected to be launched in 2021. The program will fund a maxi-
• Develop stronger Solar Home System products. There are safety issues mum of 37 percent of total financing costs.
with affordable Solar Home System kits on the market: stronger equip-
ment and wires are needed to improve the quality of systems. Clean cooking

Local production Product development


• Explore opportunities to assemble or produce Solar Home System kits • Develop affordable, safe products for low-income households focusing on
locally and obtain investment incentives. Most Solar Home System kits tier 0, 1, 2 and 3 Improved Cooking Stoves. For example, companies can
are sourced from China, but one company is currently investigating add insulation to the stove to increase heat efficiency.
options for local production.
Local production
Financial model • Investigate the possibility to produce pellets and briquettes locally, to re-
• Benefit from financial support provided to Solar Home System compa- duce usage costs of tier 4–5 stoves. The government is willing to facilitate
nies and consumers. The Scaling up Renewable Energy Program fund access to raw materials for factories (e.g. providing forest concessions to
and Ubudehe subsidies will be launched soon providing funds to reach pellets makers).
low-income households.
Awareness
• Contextualise sales strategies and awareness campaigns to local values.
Cooking practices are linked to strong cultural and behavioural values in
Rwanda. Consequently, it is difficult to convince people to change their
behaviour in both urban and rural areas.

Investment Opportunities in the Rwandan Energy Sector 4


ABBREVIATIONS

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

Investment Opportunities in the Rwandan Energy Sector 5


The Rwandan Gross Domestic Product (GDP) has experienced an average
Figure 2. ACCESS TO ELECTRICITY TOTAL POPULATION (SOURCE: POWER
growth rate of 7.5 percent since 2000. In 2019, economic growth even AFRICA, 2019)
exceeded ten percent. Prior to the global pandemic, growth rates of approxi-
mately eight percent were projected until 2022.11 Disruptions of international
trade and travel are likely to suppress growth rates. Moreover, public invest-
ments supporting the expansion of (energy) infrastructure such as power
plants have been a major driver of growth.12 Stable energy supply can support
industry development and small businesses. At the moment, 72 percent of
productive users in Rwanda has access to energy.13 Considering recent develop-
ments, delays in the execution of energy generation projects can be expected.

RWANDAN ENERGY SECTOR

In 2020, the Rwandan Ministry of Infrastructure (MinInfra) estimates that


52.2 percent of the Rwandan population has access to energy. 38 percent of the
Rwandan population has access via a grid connection and fourteen percent is
connected to an off-grid line.14 This percentage might be slightly lower when
applying the standards of the International Energy Agency (IEA) according to
which 49 percent of the Rwandan population had access to basic electricity
in 2019.15 The Rwandan government aims to reach universal access for the
population to electricity by 2024. At the moment, consumer electricity demand
is rather low because most households still use biomass for cooking, and
kerosene for lights. Around 98 percent of the total Rwandan population uses
biomass as cooking fuel, which makes the health burden of indoor air pollution
exposure one of the largest in the world.16 The government aims to reduce the Figure 3. ENERGY CONSUMPTION BY CONSUMERS IN RWANDA (2016)
number households using biomass for cooking from 98 to 42 percent by 2024.

The Ministry of Infrastructure (MinInfra) has set ambitious targets in the


Energy Sector Strategic Plan (ESSP) for 2018/2019–2023/2024.17 It distin-
guished between three subsectors: electricity, biomass and petroleum.18
Whereas, electricity and biomass are prioritised, petroleum is not. All
ELECTRICITY 2%
petroleum (including LPG) is imported from neighbouring countries and
so far, there is no evidence Rwanda has its own source. Rwanda’s ESSP PETROLEUM 13%
main target is reaching universal access to energy by 2024. Approximately
52 percent of energy generation should come from renewable energy
sources. The projected division between on-grid and off-grid access is 52
percent versus 48 percent. Figure 4 shows that on-grid targets for the year
2018/19 were met. However, targets were not met for off-grid access, which
is fourteen percent at the moment instead of the projected 23 percent.
The main challenge is to reach low-income households in remote areas.
BIOMASS 85%

11 MinInfra: ESSP, 2018.


12 African Development Bank Group: Africa Economic Outlook, 2020; World Bank 2020.
13 Productive users utilise energy for activities that enhance income and welfare.
Examples of productive users are health and education facilities, public infrastructure,
and industries (MinInfra: ESSP, 2018).
14 Head of Infrastructure Section Lénaïc Georgelin, 2020.
15 IEA (2019, p. 36) defines access to energy for households when ‘the household
has reliable and affordable access to electricity (and clean cooking facilities), which
is enough to supply a basic bundle of energy services, and with the level of service
capable of growing over time. Basic electricity services are defined as owning a set of
several lightbulbs, phone charging, a radio and potentially a fan or television.
16 IEA, 2019.
17 MinInfra: ESSP, 2018.
18 MinInfra: ESSP, 2018.

Investment Opportunities in the Rwandan Energy Sector 6


Figure 4. PLANNED CHANGES IN ON- AND OFF-GRID CONNECTIONS 2018–2024 (SOURCE: ESSP, 2017)

2018/19 2019/20 2020/21 2021/22 2022/23 2023/24


100
90
80
70

%
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

Households connected (million) 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24


and share (%)

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

reach 556 MW, which includes a reserve margin of fifteen percent.20

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

of 250 kilowatt (KW).22 The installed capacity of SHS, based on an average


of 50 Watt (W) SHS is 12.7 MW. This is based on numbers from 2019.

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.

Investment Opportunities in the Rwandan Energy Sector 7


2. Stakeholders
and enabling District of Kigali 65% + 2.7%

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.

NATIONAL ELECTRIFICATION PLAN

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.

Figure 5. NATIONAL ELECTRIFICATION PLAN 2018

LEGEND
Umuwalimu SACCO
Existing and ongoing MV
NEP Category
Crossed by MV
Grid Extension
Off-grid
Administratives
Waterbodies
National Park
District boundary
Sector boundary

Investment Opportunities in the Rwandan Energy Sector 8


PUBLIC SECTOR
Figure 6. OPERATIONAL FRAMEWORK ENERGY SECTOR RWANDA

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

Figure 7. ELECTRICITY TARIFFS FOR DIFFERENT CONSUMER GROUPS


IN 2018–19 AND 2020 (PRICE PER kWh in RWF) (SOURCE: REG, 2020)
INDEPENDENT POWER PRODUCERS
INDUSTRIAL
IPPs are of crucial importance to the Rwandan government in helping to
achieve its 2024 goals. There are on-grid and off-grid producers. There are Small 110
<22.000 kWh/year 134
only a couple of on-grid IPPs; foreign companies facilitating large-scale
Medium 87
grid investments. IPPs have supported the development of the methane 22.000–660.000 kWh/year 103

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

0–100 kWh 204


227
CONSUMERS >100 kWh 222
225

Consumer groups in Rwanda are highly diverse in terms of consumption


rates. This is the reason why there are fixed electricity tariffs for different
consumer groups. A distinction is made between residential, non-residen- RESIDENTIAL
tial (public institutions, offices and hospitals) and industrial consumers. A 89
0–15 kWh 89
second categorisation is made within the three consumer groups on the
basis of monthly consumption rates. Major differences exist between the 182
15–50 kWh 212
charged tariffs for the low-income, low-demand households versus the
210
high-income, high-demand households. Moreover, small industrial users >50 kWh 249
pay a higher price than large industrial users; businesses receive major
2018–19 2020
discounts on energy tariffs as an investment incentive.29 In 2016, house-
holds accounted for 82 percent of total energy consumption in Rwanda.

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.

Investment Opportunities in the Rwandan Energy Sector 9


Categorisation of residential consumers is based on their energy consump- Table 1. LOAD LEVELS, INDICATIVE ELECTRIC APPLIANCES AND ASSOCIATED
tion rates as well as the national social stratification system: ‘Ubudehe CAPACITY TIERS (SOURCE: RWANDA BEYOND CONNECTIONS, 2018)
categories.’ Ubudehe means ‘collective action and mutual support to solve Load level Indicative electric appliances Capacity tier
problems within a community.’ In the tier system, Rwandans are catego- tipically needed
to power
rised on the basis of their socioeconomic status; one’s category determines the load
the level of support provided by the government.32 There are four Ubudehe
categories; the first category includes the poorest people in society while Very low 3–49 W Task lighting, phone charging,
radio TIER 1
the fourth category is for the wealthiest members of society. Electricity load
consumption rates are linked to the Ubudehe category: people in tier
Multipoint general lighting,
four have the highest consumption rates (�load’) and use most appliances. television, computer, printer,
Low load 50–199 W TIER 2
fan

Air cooler, refrigerator, freezer,


Medium 200–799 W food processor, water pump,
TIER 3
load rice cooker

Washing machine, iron, hair


High 800–1999 W
dryer, toaster, microwave TIER 4
load

Air conditioner, space heater,


2000 W vacuum cleaner, water heater,
Very high or more
electric cookstove TIER 5
load

THE FOUR UBUDEHE CATEGORIES33 ENERGY CONSUMPTION

3 4 Average 20.8 kWh/month30


2
1 RURAL URBAN
9.9 kWh/month 29.2 kWh/month

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

489,700 1,198,600 1,187,700 66,400


households households households households

People with no People who People who People


means to own have part time do not need deemed to be
or rent homes small jobs and help from the rich such as
of their own either own government government
and can hardly cheap houses for survival. officials from
put food on or are able to They include the level
the table. pay rent. farmers, of director
professionals, upwards, and
and business large business
owners. owners.

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.

Investment Opportunities in the Rwandan Energy Sector 10


3. Major trends in Figure 8. ON-GRID GENERATION MIX RWANDA 2019 (SOURCE: REG, 2019)

on-grid electrifi- HYDROPOWER 45%

cation DIESEL 27%


IMPORT 1.5%
In 2020, Rwanda has an installed on-grid energy capacity of 224.6 MW.34
SOLAR 5.5%
Rwandan on-grid energy capacity has tripled since 2010. 52.5 percent
comes from renewable energy sources. The government expects on-grid
PEAT 7%
energy demand to peak around 2024, reaching 282–376 MW.35 Around
this time, the government expect on-grid capacity to be around 290 MW METHANE 14%
(52 percent of the total capacity of 560 MW). In 2019, REG developed the
Least Cost Power Development Plan (LCPDP), which defines the genera-
tion extension plans for 2019–2025. There are ongoing projects for which Figure 9. INSTALLED CAPACITY NATIONAL GRID 2009–2017 (SOURCE:
MININFRA, 2018)
construction has started. Most projects are still in the pipeline and some
projects are on hold because the funding phase has not been completed.
MW
250
218
HYDROELECTRIC POWER 200 192
164 164
The total current installed capacity of all hydroelectric power plants in 150 131
112
Rwanda is 98.5 MW. About 45 percent of on-grid energy in Rwanda is 96 101
100 86
generated by hydroelectric power.36 There are five large operational power
plants with a total capacity of around 73 MW. The large power plants are not 50
working on full capacity due to several reasons such as weather conditions
0
influencing water levels. The large hydro power plants are generating power 2009 2010 2011 2012 2013 2014 2015 2016 2017

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

Nyabarongo I Power Station


(Nyabarongo River, Southern Province)
HYDROELECTRIC POWER
Coordinates: 2J6M+G7 Bulinga, Rwanda
Installed capacity: 28 MW
Operational capacity: 13.5 MW
OP MAX Date of installation: 2014

Ruzizi II Power Plant Rukarara Hydroelectric Power


(Ruzizi river, border Rwanda-DRC) Station
Coordinates: FVRG+73 Bukavu, Democratic Republic of the Congo Coordinates: GHJ3+M8 Kabacuzi, Rwanda
Installed capacity for Rwanda: 12 MW (43.8 MW total) Installed capacity: 9.5 MW
Operational capacity: 10.7 MW Operational capacity: 3.8 MW
OP MAX Date of installation: 2017 OP MAX Date of installation: 2011

Investment Opportunities in the Rwandan Energy Sector 11


Total Rwandan potential for hydropower has been estimated at 400 MW.
METHANE GAS
The domestic potential is 250 MW and there is an additional regional potential
of 150 MW when the use of shared water resources is optimised. In the
Rwanda has a unique source of energy: Lake Kivu where methane gas is
coming five years, full domestic capacity of 250 MW should be realised
extracted to generate energy. Lake Kivu is situated between Rwanda and the
following the development of new and more efficient hydroelectric power
Democratic Republic of Congo (DRC) and considered a shared energy source.
plants. These projects will raise hydropower generation by 173 percent.
There is no other lake in the world that contains methane gas in the same
proportions. The high levels of methane are caused by the surrounding
In the LCPDP, five large hydroelectric power plant projects are mentioned
active volcanic region. The total lake contains 60 billion m3 of methane
to be developed with a total MW capacity of 137.5 MW: Nyabarongo II
and it is estimated that a total of 700 MW of electricity can be generated
(43.5 MW), Ruzizi III (48.33 MW), Giciye III (7.2 MW), Rukarara VI (6.7 MW),
over a period of 55 years.42 The total potential for Rwanda is 350 MW.
Rusumo (26.7 MW) and Bihongore (5.4 MW).37,38 The first four projects are
extensions of current installed plants. Additionally, 31 MW will be installed
At the moment, there is one power plant on Lake Kivu located in the
through eighteen smaller and micro hydro projects; of which 7 MW will
Rwandan part of the lake. Kivuwatt is owned by a British company called
be installed by IPPs in 2020.39 Moreover, the LCPDP states existing power
Contour Global and has been operational since 2015. The plant produces
hydro-plants will remain operational. However, there is no indication in the
26 MW over a period of 25 years, supplying the national grid of Rwanda.
plan whether the government is planning to improve their capacity or not.
The plant is running at full capacity. The construction of two additional
plants is planned raising total capacity of Kivuwatt to 75 MW.43 This
project is still in the pipeline. A second project is under construction at
THERMAL POWER Lake Kivu. Symbion, an American-based energy company, is constructing
a plant with a generation capacity of 56 MW over a period of 25 years.44
Thermal power accounts for 27 percent of total energy capacity in Rwanda.40
Diesel is the main source used to meet demand during peak hours. Diesel
is relatively expensive because it is imported and inefficient, which makes
the generation of electricity costly. Industrial users are charged slightly
higher prices during peak hours. Improved affordability is expected when
extra supply is provided during peak hours following the completion of
new hydro and peat projects (rather than diesel). There are five thermal
power plants using diesel. The two largest plants are Jabana (phase 1 and 2)
and SO-Energy, which are both situated in the district of Kigali.41 They have
an installed capacity of 27.8 and 30 MW respectively. No new projects
will be developed in the future. The Rwandan government is focusing
on renewable energy and moving away from diesel-generated power.
37 REG, 2019.
38 Two large plants, Rusumo and Ruzizi III, are regional projects and the number of MW
in brackets is the capacity assigned to Rwanda.
39 REG, 2019.
40 REG, 2019.
41 REG, 2019.
42 DLA Piper Africa, n.d.
43 ContourGlobal, n.d.
44 Symbion, n.d.

Investment Opportunities in the Rwandan Energy Sector 12


PEAT

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

Only 5.5 percent of on-grid electricity in Rwanda is generated by solar power.


The installed capacity for the generation of solar power is low. There are three
power plants: Jali (0.25 MW), GigaWatt (8.5 MW) and Nasho Solar PP (3.3 MW).
The total installed capacity is around 12 MW. However, capacity only reaches
twenty percent on average, since there are no energy storage facilities. Most
energy is needed during evening peak hours when there is no sunlight.
However, due to the lack of storage surplus energy collected during the day is
lost. The government-owned Nasho plant is a solar-powered irrigation project.
The largest plant, GigaWatt is running at the lowest capacity of 14 percent. feasibility studies are being conducted. Moreover, REG acknowl-
edges the high potential of solar PV in Rwanda. Nonetheless, the focus
REG has announced the development of a new solar plant including areas of the Rwandan government are hydro, methane and peat,
a storage facility, generating 30 MW of electricity. At the moment, which can be explained by the short lifespan of solar infrastructure.

Jali Solar Energy Plant


Coordinates: 4288+6G Jali, Kigali, Rwanda Rwamagana Solar Power Station
Installed capacity: 0.25 MW (GigaWatt)
Operational capacity: 0.04 MW
Date of installation: 2007 Coordinates: X9FG+HV Colline Nawe, Rwanda
Installed capacity: 8.5 MW
OP MAX Operational capacity: 1.19 MW
OP MAX Date of installation: 2013

Nasho Solar PP

Coordinates: WP3R+9X Murundi, Rwanda


Installed capacity: 3.3 MW
Operational capacity: 0.66 MW
OP MAX Date of installation: 2017

SOLAR POWER

PEAT POWER

Gishoma Peat to Power Plant Hakan Peat to Power Plant


(Western Province) (Southern Province)
Coordinates: 9WJP+RC Gishoma, Rwanda Coordinates: GXG3+GX Muyaga, Rwanda
Installed capacity: 15 MW Installed capacity: 72 MW
Operational capacity: 14.25 MW Operational capacity: 68.4 MW
OP MAX Date of installation: 2017 OP MAX Date of installation: 2020 (planned)

Investment Opportunities in the Rwandan Energy Sector 13


ENERGY IMPORTS DISTRIBUTION OF ENERGY

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.

Investment Opportunities in the Rwandan Energy Sector 14


GRID CONNECTION FEES

Consumption rates of both urban and rural households are insufficient


to publicly fund the cost of a grid connection. An average monthly
electricity consumption between 130–140 kWh is needed to break-
even.53 However, these high connection fees are also a major obstacle
for consumers. At the moment, the willingness to pay (WTP) of uncon-
nected households is low, especially in rural areas (see figure below).
In 2017, connection fees were roughly 56,000 RWF (nearly 59 USD). ELECTRIFIED HOUSEHOLDS
48 percent of customers were not willing to pay because the costs are
AVERAGE MONTHLY CONSUMPTION IS 20.8 KWH
simply too high; connections fees are higher for consumers located
further away from the grid. The Rwandan government acknowledges RURAL URBAN
9.9 kWh/month 29.2 kWh/month
that the fees are a barrier to the target to quickly expand grid-access.

Figure 10. WILLINGNESS TO PAY FOR A GRID CONNECTION INCREASES


WHEN PAYMENT IS SPREAD OVER TIME (SOURCE: RWANDA BEYOND
CONNECTIONS, 2018)

14.4% willing to pay 56,000 RWF upfront


CONNECTION TO THE GRID:
34.8% willing to pay 56,000 RWF
URBAN
(15,000–41,000 over 24 months)
77.4%
2.4% willing to pay 28,000 RWF upfront RURAL
15.6%

48.3% not willing to pay at given terms


ELECTRICITY USAGE:

Figure 11. OVER HALF OF UNCONNECTED HOUSEHOLDS ARE NOT 66.8%


CONNECTED TO THE GRID BECAUSE OF HIGH CONNECTION COST very low–load appliances

(SOURCE: RWANDA BEYOND CONNECTIONS, 2018)


ELECTRICITY SERVICE

81.3% of electrified households have


at least 8 HOURS of electricity supply a day,
at least 3 HOURS in the evening

49.6%
receive electricity
23 HOURS a day, 7 DAYS a week

2.4% 2.0% 1.6% 2.8% Other 91.7%


Monthly fee is expensive more than FOUR electricity
Rent/landlord's decision DISRUPTIONS a week
Application submitted,
waiting for connection
36.5% 20.9%
Grid is too far
face VOLTAGE ISSUES
VOLT (such as low or fluctuating voltage)
54.7%
Connection cost is too expensive

53 Rural Electrification Strategy, MinInfra, 2016.

Investment Opportunities in the Rwandan Energy Sector 15


Large-scale grid projects

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

fication projects collaborating with other East-African countries.

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.

Investment Opportunities in the Rwandan Energy Sector 16


5. Major trends in
off-grid electrifi-
cation
The off-grid sector in Rwanda is developing but progress has not been CONNECTION TO AN OFF-GRID SOURCE55
made as fast as in the on-grid sector. The off-grid sector should target
rural areas because of the low connection rates and high connec-
tion fees. Moreover, off-grid electrification is supposed to target
households rather than productive users. Only productive users located
800 meters or further from a grid infrastructure can be connected BEFORE 2015 2018 2019
0% 11% 14%
to an off-grid source. The assigned areas for off-grid expansion are
visible in the NEP, which defines the target areas for off-grid sources.

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

Investment Opportunities in the Rwandan Energy Sector 17


Businesses looking to enter the Rwandan market for SHS, should
Figure 12. SOLAR LIGHTING PRODUCT SALES BY PAYMENT MODALITY
follow strict governmental guidelines. All SHS on the Rwandan market (SOURCE: ENDEV, 2018)
are required to meet certain minimum standards. Businesses need to
make sure their SHS product meets these criteria, which define ‘basic
access to energy.’ Otherwise, their product does not enable Rwanda UPFRONT SALES 4%
to achieve SDG 7. Systems which do not meet these standards cannot
be imported. A few examples of requirements are specified below:
PAYGO 96%

• Quality of the system: systems need a proof of conformity recognized


under the International Electrotechnical Commission (IEC) Conformity
Assessment and/or Lighting Global;
• Technical specification of lamps58, solar PV panels59, and batteries60;
• Warranty: products below tier 1 (basic SLS) require at least one-year war-
Figure 13. PLANNED TARGETED SUBSIDIES TO INCREASE THE AFFORD-
ranty, tier 1 has a minimum of two-year warranty (basic SHS), and tier 2 ABILITY OF SOLAR HOME SYSTEMS (SOURCE: MININFRA, 2019)
and above has a minimum of three-year warranty (more advanced SHS);
• Agreement between purchaser and supplier: it needs to cover responsi- Range of subsidy level
bilities of both parties, resolution/complaint handling, after sales services
and a timeline. UBUDEHE 1
80–90%
UBUDEHE 2
The private sector has introduced innovative business models to improve
55–65%
financial access of households to SHS. Service models seek to remove high
UBUDEHE 3
upfront costs for customers. In 2016, 55.5 percent of the Rwandan popu-
lation was living below the poverty rate earning 57–59 USD per month. 30–40%

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.

Investment Opportunities in the Rwandan Energy Sector 18


An upcoming way by companies to finance off-grid electrification projects
MINI-GRIDS
is international crowdfunding. In this way, companies raise the initial
funds required to produce a high number of SHS systems, which can be
There are three types of mini-grids: solar power, hydropower and
donated to low income households. This trend has been visible throughout
diesel. The latter is the least popular because of the limited supply of
East Africa. In 2018, 19 USD million of funding for SHS in East Africa was
diesel in remote areas, high operational costs and fossil fuel emissions.
supplied through crowdfunding, compared to 2.5 USD million in 2017.70
Therefore, the Rwandan government encourages private sector investors
to develop hydro and solar mini-grids. Mini-grids are considered a
The main issues that arise with SHS are the limited purchasing power,
potential source of energy for households and businesses located in
customers’ lack of understanding of the credit system, remaining uncer-
the most remote areas. These consumers are highly unlikely to get a
tainty among the population with regard to the potential construction of grid
grid connection. Companies needed to wait for the finalisation of the
connections, and increasing competition enabling customers to switch to
NEP, in which the zones for mini-grid development were determined.
cheaper alternatives.71 These issues make it difficult for companies in SHS
Nowadays, mini-grid permits are still limited and expensive.72 It is obliga-
to become profitable. The first SHS companies entered the Rwandan market
tory for companies to do extensive market research to assess potential
in 2014 and only recently in 2019–2020, some managed to break even.
customers’ electricity demand prior to the installment of a mini-grid.

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).

Mini-grid development requires a high initial investment and seems more


financially challenging in comparison to SHS in Rwanda. Installment and
material costs are high, whilst energy consumption rates and number of
customers are low. The price of a mini-grid producing one kW range from
4,000–7,000 USD (including installment and transportation) and costs
per customer range from 250–650 USD.73 Some companies manage to
reduce costs per consumer connecting more households to a mini-grid;
MeshPower has connected on average 35 households to one mini-grid.

Table 2. MINI-GRID COMPANIES OPERATING IN RWANDA (SOURCE: ENDEV, 2018)

No of
Headquarter
Company Technology Location Size households Grant support
locations
connected

Neseltec Solar Kirehe district 30 kW 183 EEP Rwanda

ECOS Hydro Muhanga district 11 kW 303 EnDev Rwanda

RENERG Solar Nyamasheke district 30 kW 121 USADF Germany

Multiple in Bugesera and 1 kW each,


MeshPower Solar 2,046 EEP & EnDev USA
Ngoma districts 57 sites

MeshPower Solar Bugesera district 4 kW AC/DC 78 None USA

Absolute Energy Solar Gatsibo district 50 kW 505 EnDev UK

Renewable Energy Performance


ARC Power Solar Nyamata, Bugesera district 20 kW 200 UK/Rwanda
Platform (REPP)
Renewable Energy Performance
ARC Power Solar Nyamata, Bugesera district 40 kW 290 UK/Rwanda
Platform (REPP)

70 Power Africa, 2019.


71 EnDev, 2018.
72 RURA, 2015.
73 EnDev, 2018. This number is based on an average monthly consumption of 1 kWh
per rural household in Rwanda.

Investment Opportunities in the Rwandan Energy Sector 19


Nonetheless, it seems unlikely mini-grid electricity will be affordable for Solar mini-grids and nano-grids are ‘standalone’ energy distribution
low-income households in the absence of government subsidy schemes networks powered by solar panels. Standalone means they are not
or other (donor) financing systems. The two main mechanisms used to connected to the national grid.76 A major advantage of solar mini-grid
finance mini-grid development in Rwanda are grants and debt financing. systems is the flexibility: they can be installed anywhere with suffi-
Most companies finance their operations through grants, which cover cient solar potential. The greatest disadvantage is the short lifespan of
40-70 percent of the investment costs. Grants are a type of results- solar panels, which need to be replaced approximately every ten years.
based financing (RBF) creating an initial risk for mini-grid developers. Currently, there are six sites with solar mini-grids and 57 sites with nano
mini-grids.77 In total, these mini-grids connect 3,726 households. 1 kW
Furthermore, the Rwandan government has designed a subsidy and financial nano-grid systems can supply an average of 35 households. Full potential
support system for mini-grids in the RES. The system would provide risk of 1 kW per hour (kWh) can be reached under optimal circumstances.
mitigation facilities for mini-grid investors, targeting low-income households
and productive users.74 Companies will have the possibility to acquire loans Hydro mini-grids or pico-hydro78 grids are powered by a source of water
to invest in their mini-grid business. When a mini-grid project is unsuccessful, with a sufficient, constant flow of water. At the moment, there is one opera-
the government shares the risk of failure with private investors (IPPs).75 tional hydro mini-grid in Rwanda connecting 303 households. The advantage
For example, a mini-grid project might fail due to environmental reasons: of hydro mini-grids is the long life-span and low maintenance. The disad-
the source of a mini-hydro source can run dry following changing rain vantages are the dependence on high material costs, logistics and water
patterns. This subsidy and financial support system has yet to be launched. (rainfall). The latter disadvantage is most problematic: climate change
seems to result in shorter, more intense intervals of rainfall in Rwanda.

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.

Investment Opportunities in the Rwandan Energy Sector 20


SOLAR HOME SYSTEMS
6. Opportunities Product development

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.

purchasing power and energy consumption rates of Rwandan customers.


Eventual returns on investment remain unclear. Some SHS companies Local production

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.

Investment Opportunities in the Rwandan Energy Sector 21


Payment method Production and installation
• WTP for SHS increases when households are allowed to pay in installments. • Production costs for mini-grids are currently very high.
ͷͷ Use innovative business models based on a PAYG system or provide ͷͷ Explore opportunities for producing kits and mini-grids locally to
micro-loans to households. reduce costs.
• Customer loyalty is limited, which results in high transaction costs. • Installation and maintenance costs can be reduced following the in-
ͷͷ Improve contracts and customer relations to avoid customers from creasing availability of skilled technicians in Rwanda.
switching to competitors without notice. ͷͷ Provide training to increase the number of qualified technicians.

Financial model Payment method


• Households are unable to pay the actual price of SHS and the govern- • The most suitable payment methods for households connected to a mini-
ment has limited options of support. Start-up and operational costs can grid are PAYG and payments in installments.
potentially be covered by donors, private investors, universities. These ͷͷ Introduce flexible tariffs that allow customers to switch to higher
actors have proved a reliable source of income for other companies. or lower tariffs whenever necessary to reduce non-payment rates.
ͷͷ Tap into alternative financial flows to support the business model.
• Crowdfunding is an upcoming financing source, which has recently Financial model
gained popularity. Companies raise the initial funds required to produce • Financing of mini-grids will likely require blended public, donor and pri-
a high number of SHS systems, which are subsequently donated to low vate funds. Close collaboration with government institutions and donors
income households. is needed to design suitable blended finance mechanisms and mitigate
ͷͷ Launch a crowdfunding initiative to scale up a business. investment risks. The Rwandan government is willing to guarantee for
• SREP fund and Ubudehe subsidies will be launched soon providing funds around 50 percent of the investment in case of failure.
to reach low-income households. ͷͷ Tap into blended finance to fund mini-grid development engaging
ͷͷ Benefit from financial support provided to SHS companies and donors, public and private actors.
consumers. • Today’s competitive market makes it difficult to generate investments.
Hence, it is necessary to look into alternative financing mechanisms.
ͷͷ Use crowdfunding to raise the finance for the mini-grid.
MINI-GRIDS • Most households cannot afford the high energy prices. Financial support
for SHS companies will become available via the SREP fund (expected
Product development in 2021) and can reduce costs for households. SREP will fund a maximum
• International market prices of solar PV panels are falling. Opportunities of 37 percent of total financing costs.
in the mini-grid sector are growing for companies that manage to reduce ͷͷ Benefit from public financial support provided to SHS companies
their production costs. and consumers.
ͷͷ Improve cost-efficiency thanks to reduced costs of inputs.
• Develop partnership strategies between companies to lower the cost of
mini-grid development.

Investment Opportunities in the Rwandan Energy Sector 22


Figure 14. CHANGES IN BIOMASS USE AND ALTERNATIVE FUEL ACCESS

7. Major trends in 2018–2024 (ESSP, 2017)

clean cooking
2018/19 2019/20 2020/21 2021/22 2022/23 2023/24
100

80

60

SDG 7 ‘access to affordable, reliable, sustainable and modern energy’ also 40

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.

Investment Opportunities in the Rwandan Energy Sector 23


There are many types of Improved Cookstoves (ICS) of varying quality in terms
of health and safety standards. The Global Alliance for Clean Cookstoves (GACC)
has defined tiers (0-5) to rank the quality of stoves based on the WHO guide-
lines. Tier 0 stoves are of the lowest quality including firewood stoves. Tier 5
stoves are the highest quality including LPG, solar and electric stoves. Improved
biomass cooking stoves belong in tier 4: only tier 5 stoves are considered clean
on the basis of WHO guidelines. Nonetheless, tier 4 stoves can be used as tran-
sitional solutions being much safer than traditional stoves.85 The replacement of
biomass with alternative clean cooking fuels (LPG and electricity) is usually too
expensive for the low-income groups. Only 6.5 percent of the Rwandan popu-
lation currently uses different types of stoves mixing biomass and clean fuels.

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.

Figure 15. SEGMENTATION OF ANNUAL CHARCOAL MARKET VALUE


IN 2008 (MILLION USD)

Retail Remains in rural areas


6.6 million USD 26.3 million USD

Transport
19.7 million USD
85 GACC, 2019.

Figure 16. ACCESS TO CLEAN FUELS AND TECHNOLOGIES FOR COOKING (% OF POPULATION) (SOURCE: WORLD BANK, 2019)

Investment Opportunities in the Rwandan Energy Sector 24


Figure 17. MULTI-TIER FRAMEWORK FOR ICS AND CLEAN COOKING ALTERNATIVES (SOURCE: RWANDA BEYOND CONNECTIONS, 2018)

ATTRIBUTES TIER 0 TIER 1 TIER 2 TIER 3 TIER 4 TIER 5

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

Rocket stove Electricity,


with chimney solar, LPG
Rocket stove with
Three-stone fire, (well sealed),
Conventional or ICS + chimney, high insulation or
Emission: tripod, flat mud rocket stove
old generation rocket stove or with chimney, ad-
Stove design ring, traditional gasifier, advanced
ICS ICS + insulation vanced insulation
charcoal stove secondary air
charcoal stoves
charcoal stove,
forced air
COOKING
EXPOSURE Ventilation:
Volume of Less than 5 m3 More than 5 m3 More than 10 m3 More than 20 m3 More than 40 m3 Open air
kitchen

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)

Ventilation level Bad Average Good

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

Bad Average Good

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

Levelized cost of cooking solution


AFFORDABILITY Levelized cost of cooking solution (fuel) more than 5% of household income (fuel) less than 5% of household
income

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

Investment Opportunities in the Rwandan Energy Sector 25


Table 3. TIER PERFORMANCE TARGETS FOR COOKSTOVES (SOURCE: GACC, N.D.) Table 4. NUMBER OF INCREASE IN ICS EACH YEAR (2017/18 IS BASE YEAR)
(SOURCE: MININFRA, 2018)

Carbon Fine Particu- Year ICS


Monoxide late Matter
Thermal
Emissions Emissions Safety Durability
Tier Efficiency 2017/18 1,839,684 ICS disseminated
(gram/ (milligram/ (score) (score)
(%)
megajoule megajoule 2018/19 137,219 ICS disseminated
delivered) delivered)
2019/20 293,191 ICS disseminated
5 ≥ 50 ≤ 3.0 ≤5 ≥ 95 < 10
2020/21 315,490 ICS disseminated
4 ≥ 40 ≤ 4.4 ≤ 62 ≥ 86 < 15
2021/22 339,127 ICS disseminated
3 ≥ 30 ≤ 7.2 ≤ 218 ≥ 77 < 20
2022/23 364,112 ICS disseminated
2 ≥ 20 ≤ 11.5 ≤ 481 ≥ 68 < 25
2023/24 390,544 ICS disseminated
1 ≥ 10 ≤ 18.3 ≤ 1031 ≥ 60 < 35
0 < 10 > 18.3 > 1031 < 60 > 35

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.

Investment Opportunities in the Rwandan Energy Sector 26


“The private sector will play a prominent role in delivering access

8. Opportunities to clean cooking technologies. Government will engage with the


private sector and promote investments through establishing an

in clean cooking appropriate enabling environment. Barriers to entry and bottlenecks


will be identified and reduced or removed, resulting in competition
and innovation in both technologies and business models.” (ESSP)

Product development Financial model


• Many ICS companies target the upper market segment, whilst, low-income • Low-income households are unable to pay the full price of an ICS at once.
households are unable to afford tier 4 and 5 stoves. A market entry with The introduction of innovative and alternative payment methods such as
an alternative, improved tier 0–3 cooking stove provides a larger con- PAYG could provide a viable business model.
sumer base. These stoves can offer a transitional solution. • Government support is provided to achieve other goals related to SDG 7
ͷͷ Develop new affordable products for low-income households. ‘access to energy’ improving the financial access of low-income house-
ͷͷ Upgrade existing products with insulation to increase heat efficiency. holds. Initiatives will be launched to support SHS and mini-grid compa-
ͷͷ Sell second-hand products. nies and consumers.
• Existing ICS are still produced at high cost per unit. The most cost-efficient ͷͷ Advocate for a subsidy system based on Ubudehe categories
products can count on the highest subsidies from the Rwandan government. to make payment of ICS feasible focusing on rural areas and fe-
ͷͷ Attempt to reduce production costs using second-hand materials male-headed households.
and focusing on high volumes producing in bulk. • Producers of cooking stoves are confronted with high start-up costs and
• Companies can focus on selling less efficient stoves (WHO tier 1–3). working capital needs.
ͷͷ Provide financial support (grants or subsidies) to manufacturers
Alternative cooking fuels and distributors (e.g. by establishing working capital facilities).
• Availability of pellets and briquettes is limited, and these fuels are some-
times imported. Companies should consider setting up their own produc- Awareness
tion facility. The government is willing to facilitate access to raw materials • Cooking practices are linked to strong cultural and behavioral values in
for factories (e.g. providing forest concessions to pellets makers). Rwanda. Consequently, it is difficult to convince people to change their
ͷͷ Investigate the possibility to produce fuels locally to reduce usage ways introducing new technologies in both urban and rural areas.
costs of tier 4–5 stoves. ͷͷ Contextualise sales strategies and awareness campaigns to local
ͷͷ Investment in the controlled and sustainable production of biomass values.
and clean fuels.
• Most Rwandans still use wood or charcoal which harms our natural en-
vironment because the costs of clean cooking fuels are still too high.
Business might enable customers to exchange raw biomass for pellets or
briquettes. Alternatively, they can obtain discounts when providing raw
biomass.
ͷͷ Develop an inclusive business model with solutions for low-income
households.

Investment Opportunities in the Rwandan Energy Sector 27


Annexe 1 | Overview of categorized donors for off-grid electrification,
on-grid electrification and clean cooking

These companies/organisations are currently providing (financial) support to


programs in Rwanda or used to support projects in the past.

ON-GRID ELECTRIFICATION CLEAN COOKING


AfDB Acumen Capital Partners
Arab Bank for Economic Development in Africa (BADEA) Africa Enterprise Challenge Fund
China Exim Bank Energising Development (EnDev)
Development Bank of Rwanda (BRD) Energy and Environment Partnerships Trust Fund (EEP Africa)
Emerging Africa Infrastructure Fund EU External Action
Enabel Fonerwa
Energy and Environment Partnerships Trust Fund (EEP Africa) Osprey Foundation
European Union (EU External Action) World Bank (Carbon Initiative for Development)
Finnfund
FMO
JICA
KFW Entwicklungsbank
Norfund
STEG International
USAID/Power Africa
World Bank

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

Investment Opportunities in the Rwandan Energy Sector 28


Annexe 2 | Development organisations supporting
ongoing energy projects in Rwanda

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.

EUROPEAN UNION (EU)


In 2014 the government of Rwanda and European Union signed a financial agreement of 23 million euros to upgrade Rwanda’s electricity network
systems to reduce losses of already scarce power produced. An example of a project done in cooperation with the EU, is the Jabana Power
Substation at Gasabo. EU granted 6 million euros to Mobisol for prepaid Energy ‘Rent to own’ solar Home systems (off grid) project.
The goal of the project is to provide solar power systems to more than 70,000 households, and 100 schools in rural areas.

AFRICAN DEVELOPMENT BANK (AFDB)


In 2018 AfDB signed a loan contract of 229.2 million euros to support electricity supply and access to electricity. This loan included 181 million USD
of loans from AfDB and 70 million USD from the African Development Fund. This is a special fund within the AfDB Bank Group focused
on economic and social development in least developed African countries. The program will enable connections to 193,000 households
on-grid and 124,000 off-grid.

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.

RWANDA RENEWABLE ENERGY FUND OF THE WORLD BANK


The REF plans to help 1.8 million people to access electricity off grid through its support to government projects within the RES. The projects
started in 2017 after the government of Rwanda and the World Bank signed the 48.9 million USD SREP fund.

POWER AFRICA OF USAID


Power Africa mainly provides the development of on-grid projects done by its partners. The organisation supports interested private
investors linked to Power Africa and development banks willing to provide loans or grants. Examples of developed projects are the Hakan
peat to power (on-grid power plant, 80MW), SoEnergy diesel generation plant and the Agahozo-Shalom on-grid solar plant.

Investment Opportunities in the Rwandan Energy Sector 29


Ministry of Infrastructure. (2018b). Energy Sector Strategic Plan 2018/19–
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