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Difference between revisions of "NAE Case Study: Rwanda, Sector-Wide Approach to Planning"

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= Description<br/> =
 
= Description<br/> =
  
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The Rural Energy Development Programme (REDP) aimed to increase energy access from micro-hydro systems, based on a mobilization process which put the community at the centre of planning and implementation. After its launch in 1996 as a small pilot initiative in five remote hill districts, the programme was scaled-up in response to the national Hydropower Development Policy of 2001. Three phases addressed the cycle of pilot operation, expansion, replication, mainstreaming and institutionalization. The programme expanded from 5 to 40 districts in its third phase from 2007-11. Communities were selected based on technical feasibility and requests from residents willing to implement, manage and partly finance each proposed scheme, thereby ensuring ownership and timely execution. The REDP operated at three levels. At the community level, activities focused on planning, implementation, operation, and maintenance of energy systems. This included establishment of Community Energy Funds where revenues - from grants, subsidies, charity, loans and tariff collection - were deposited, and payments made for operations, repairs and maintenance (done entirely by the community).&nbsp; Tariffs were set at local level, with flat tariffs ranging from RS 0.25-2/W/month applied in most cases,. At the district level, activities focused on building capacity to plan, manage, and monitor the rural energy development process.&nbsp; At the national level, activities focused on policy support and coordination based on lessons learnt from decentralized local operations.<span style="font-size: 0.85em;"></span>
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The SWAP initiative was a plan for integrated electrification combining grid, mini-grid and off-grid technologies on a least-cost basis together with coordination of the Government and development partners under an MoU.&nbsp; This was based upon utility-led grid-extension combined with private sector led off-grid electrification.&nbsp; The SWAP was designed to identify the least-cost network rollout for electricity to be extended over 20 years, with an initial medium-term target for 2014.&nbsp; A high-level, spatial, least-cost network rollout planning and costing platform was used to bring together demand and socio-economic data to develop an electrification plan to anchor the sector, called&nbsp;<span style="font-size: 0.85em;">“Access Program Investment and TA Prospectus”.</span>
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= Context =
 
= Context =
  
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Nepal has no known major oil, gas, or coal reserves, and its position in the Himalayas makes it hard to reach rural communities, many of which&nbsp; are extremely remote. Nepal has one of the world’s lowest rates of per capita electricity consumption, with an average in&nbsp; 2007 of 86 kWh/year rising to 139kWh/year by 2014. Between 2005 and 2014 peak demand more than doubled from 557 to 1200 MW. In the same period of time annual electricity production increased from 2642 GWh to 4631 GWh. Out of these, 3558 GWh were produced domestically, while 1072 GWh were imported from India.&nbsp; 88% of the population relies on traditional biomass fuels for cooking and heating; about 45% of the population has access to electricity (only 8% in rural areas).&nbsp; The National Electricity Authority (NEA) serves only 15&nbsp;% of the total population with electricity supplied from the main grid and, for these customers, average electricity supply is less than eight hours per day, with load shedding accounting for up to 16 hours during winter.&nbsp; (This level of intermittency means that even those consumers who are connected to the national grid may receive electricity for only 8 hours per day, which means at most a Tier 3 energy supply).&nbsp; The remaining 30% of the population with electricity access are served by the thousands of small installations (e.g. diesel gensets, micro-hydro systems, solar home systems, small island mini-grids.) that are mostly installed at the users' premises in Nepal. There are however untapped hydropower resources of about 83,000 MW, with 43,000 MW deemed to be economically viable for development.
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In July 1994, over one million people had been killed and millions were displaced from their homes due to the genocide against the Tutsis.&nbsp; The country´s development strategy has since prioritised the need for security and stability, to be sustained at whatever cost.&nbsp; Electrification of rural areas in 2008 was only 15% and the power supply increased by only 10% over the following five years, while annual peak demand grew from 50MW to almost 90MW in 2013.&nbsp; However, the Electricity Access Roll-out Programme (EARP) increased access from 364,000 households in June 2012 to 590,000 households (24% of the total) by June 2016.&nbsp; The government target for access to electricity is now 100% by 2020.&nbsp; Rwanda is endowed with a number of natural resources, including hydro, solar, and methane gas, and has plans to generate 563MW of electric power from these sources.&nbsp; But, despite positive recent electrification efforts, it currently still has only about 186 MW of installed generation capacity to serve a population of more than 10.5 million people.&nbsp; The majority of its existing capacity comes from hydropower (59%) and thermal generation (40%).&nbsp; Most of the generation projects in Rwanda are the result of public-private partnerships between the government and independent power producers.&nbsp;&nbsp; Rwanda is also part of the Eastern Africa Power Pool, and has plans to import up to 30 MW from Kenya in 2017.&nbsp; Based on current data (end 2016), Rwanda’s national electrification rate has reached 24.5% (1.5% off-grid, 23% on-grid). The annual consumption of electricity per capita is among the lowest in Africa, with approximately half of consumers using an average of less than 20 kWh per month. As many as seven million people still lack access to electricity.
  
 
= Objectives =
 
= Objectives =
  
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REDP was launched in 1996 with the aim of expanding energy access to remote rural communities, strengthening capacities of energy institutions and establishing a national rural energy policy framework.&nbsp; The ultimate objectives were:&nbsp; i) develop best practices for rural electrification, bringing new models and continuous learning for rural energy access and poverty alleviation in Nepal; ii) build local capacity to increase energy access through a community management model in 40 districts, iii) develop productive and other end uses, including for women and the socially excluded; iv) support the AEPC for energy planning and the preparation of a Rural Energy Policy; and v) pilot innovative approaches for long-term micro-/mini hydro. There were few quantitative targets, though the aim for phase II was to provide 3MW of increased supply (though the outcome fell 20% short of this aim).
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The first 5-year phase of the Electricity Access Roll-Out Plan (EARP) aimed to increase electricity connections from 110,000 in 2008 to 350,000 in 2014 (a target that in practice was reached by 2012), and substantially increase electricity access for social infrastructure facilities in the health and education sectors.&nbsp; Under the Economic Development and Poverty Reduction Strategy for 2013–18 (EDPRS 2), the government was working towards the target of 70% of households connected by 2017.&nbsp; This was revised in the RE Strategy of 2016, which replaced the previous goals with a target of 22% of households gaining access to a Tier 1 energy service (as defined in the SE4ALL Multi-Tier Framework) and 48% of households gaining access to on-grid or at least Tier 2 energy service by July 2018 (in acknowledgement of the differing service levels and the extended timeframe required to reach increasing remote areas). This goal is to be met through a combination of on-grid and off-grid supply. 100% access to electricity is targeted by 2020.
  
 
= Legal Basis =
 
= Legal Basis =
  
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The Renewable Energy Development Programme (REDP) of Nepal was an international co-operation programme supported by the World Bank and United Nations Development Programme, in partnership with the national Government.&nbsp; The Alternative Energy Promotion Centre (AEPC), the managing agency for REDP, is a Government entity. The Department of Electricity Development (DoED), oversees the issuing of licenses for hydropower projects, though no licensing is required for projects of up to 1,000 kW capacity.
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Rural Electrification Strategy, prepared by MININFRA and approved by Cabinet in April, 2016.
  
 
= Institutions, Roles and Responsibilities<br/> =
 
= Institutions, Roles and Responsibilities<br/> =
  
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Many entities – including the government, non-governmental organizations, international organizations, and private institutions – are involved in promoting renewable and rural energy service delivery in Nepal. Overarching authority for electrification efforts is provided by the Nepal Electricity Authority (NEA), established in 1984, whose primary objective is to generate, transmit, and distribute adequate, reliable, and affordable power by planning, constructing, operating, and maintaining all generation, transmission, and distribution facilities in Nepal’s power system. Thus, NEA’s engagement in rural electrification is primarily through the national grid system. Off-grid, decentralized energy service provision is led by the Alternative Energy Promotion Centre (AEPC), established in 1996 as an autonomous agency within the Ministry of Environment (MoEnv). AEPC presides over various rural energy projects, including the Rural Energy Development Programme (REDP). REDP projects received about 45% grant finance through the programme (from the World Bank and UNDP), a 16% subsidy from the Government of Nepal, and about 10% from Village and District Development Committee (VDC/DDC) funds, representing a total subsidy of approximately 70%.&nbsp; The remainder was paid via the tariffs collected from users.&nbsp; (The total programme cost for the Phase III was USD 35 million, which consisted of&nbsp;: UNDP – USD 3.4 million; World Bank – USD 16 million; GoN – USD 5 million; and community – USD 10.6 million). Private sector firms such as the Rural Energy Services Centre (RESC) provided technical support services to communities for feasibility studies and installation, operation and maintenance of RE systems.
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*Ministry of Infrastructure (MININFRA):&nbsp; leads the country’s national energy policy and responsible for the co-ordination of SWAP
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*The Energy, Water, and Sanitation Authority, EWSA (the former Rwandan electricity utility):&nbsp; responsible for the implementation of EARP and met the initial target in 2012 (ahead of schedule) through rapidly scaled-up implementation.
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*Rwanda Energy Group Limited and its two subsidiaries, EUCL and EDCL:&nbsp; replaced the former utility EWSA in 2014; responsible for energy development and utility service delivery
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*Rwanda Utilities Regulatory Agency (RURA): regulates all the utilities that include ICT, Transport, and Energy sector, Water, Sanitation and Media; established in 2002 as an institution to build capacity and synergies across different sectors that drive economic development.
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*Water and Sanitation Corporation:&nbsp; role is to develop and operate water and sanitation infrastructure and deliver related services in the country.<br/>
  
 
= Interventions<br/> =
 
= Interventions<br/> =
  
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REDP focuses on involving local communities and building institutional capacities and local skills.&nbsp; It created a Rural Energy Fund at the district level (using the grant funds from the WB, UNDP and the Government) that provided subsidies for mini-grid electrification. Micro- and mini-hydropower systems (up to 1,000 kW) were made exempt from certain taxes, royalties, and licensing requirements.&nbsp;&nbsp; Key elements of the REDP interventions included: i) community mobilization to encourage and support them in undertaking productive activities resulting in strong social capital, economic growth, and environmental sustainability. Even the poorest families were made capable to own and use the systems, and pay a tariff for the electricity consumed; ii) broad-based participation to ensure transparency and consensus-based decision-making by all households; iii) support for institution building, helping to create District Energy and Environment Sections in the District Development Committees (DDCs); iv) training for local NGOs, community groups, and the private sector to strengthen their technical and managerial skills to deliver and manage micro-hydro systems.
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The RE Strategy of 2016 sets out four distinct programmes that provide the framework for SWAP, including: 1) the provision of basic solar systems as a basic necessity to the less privileged population, 2) the establishment of a risk mitigation facility that will support the private sector, 3) mechanisms that will increase the development of mini-grids in suitable locations, and 4) the continued implementation of the Electricity Access Rollout Programme (EARP).&nbsp; Least-cost planning is a particular focus of SWAP, together with the coordination of funding.&nbsp; These interventions are based upon the following principles: i) Rural electrification measures are driven by economic efficiency; ii) The private sector takes a lead role in financing and delivering off grid energy access; iii) Government financial support is only used to address affordability gaps and market failures; iv) consumers have the most appropriate, cost effective technology for their needs; v) interventions are financially sustainable. The mechanisms and structures to support the delivery of targets are still at an early stage of development, though some specific steps have already been undertaken.&nbsp; On 1 January 2017, Rwanda introduced cost-cutting measures for poor households by cutting the tariff for the first 15kWh consumed per month by 50%. It also reduced industrial tariffs to bring make them competitive with regional rates and brought in a time-of-use tariff for industrial customers in order to shift load to off-peak periods.&nbsp; A wide range of technical assistance is being provided by international donors to make further progress, including the preparation of new procedures to facilitate private-sector led IPP investments in clean electrification projects, assistance with the planning, operation, and maintenance of generation, transmission, and distribution systems, and support for increased access to off-grid electricity.
  
 
= Impacts Achieved<br/> =
 
= Impacts Achieved<br/> =
  
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The impressive performance of the REDP is reflected by its outputs, which included the preparation of pragmatic policy and regulation based upon the lessons learned, and the internalization of rural electrification development at country, district and community levels. 317 micro-hydro mini-grids with a cumulative capacity of 5,814 kW were implemented,&nbsp; benefitting almost 350,000 people living in rural areas unlikely to be grid-connected for at least five years. At the end of the project period, an additional 137 micro hydro systems were at an advanced stage of installation and expected to generate 4,441 kW, providing electricity services to an additional 250,000 people (42,000 households).&nbsp; By 2014, more than 1,000 micro-hydro plants with total generation capacity of 22 MW had been developed, providing off-grid electricity access to 20% of the population, including power for agro-processing and other productive activities. Local governments have integrated the REDP approach into local development planning (rather than leaving isolated, donor-funded projects) and they have supported the capacity development needed for sustainable impact.
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REG recorded a generation capacity increase of 89.5 megawatts over 2014-2016, bringing the total installed capacity to 190MW, with the Government projecting 563MW power generation in the following two years.&nbsp; This is an interesting case of how access to electricity can be quickly scaled up despite deficits in infrastructure and institutional capacity. The magnitude and pace of the successes achieved under the country’s Electricity Access Rollout Program (EARP) surpassed even the ambitious targets set by the government.&nbsp; The SWAP framework and process (one of the first applications of such a sector-wide approach in the electricity sector) proved to be pivotal in rallying all major stakeholders to support the sector-wide "bankability” during the donor financing roundtable for the first 5-year phase of the national electrification program (2009–14).&nbsp; Under the SWAP program, the national utility has impressively ramped up its annual implementation rate from under 1,000 connections per year prior to the start of the program (2008) to a current annualized rate of 60,000 new connections.
  
 
= Lessons Learned<br/> =
 
= Lessons Learned<br/> =
  
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REDP’s community-based approach to energy planning and managing rural energy systems has proven to be an effective model for decentralized energy solutions, providing an attractive alternative to what had historically been a weak and centralized government approach to rural energy development.&nbsp; Key drivers of success were: national ownership and commitment, local engagement, catalytic finance, community mobilization and local partnerships, and capacity development at all levels.&nbsp; The funding arrangements were particularly significant, including a relatively well-functioning subsidy scheme and the mini-hydro revolving debt fund, with communities financing an increasing proportion of the costs as the programme progressed.
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The spatial least-cost integrated (grid and off-grid) rollout investment and implementation planning platform used in Rwanda proved to be effective because: (i) it was seen as a national development plan rather than a electricity sector plan; (ii) it was inclusive in that all key stakeholders (in-country and external) participated on an ongoing basis during preparation of the spatial plan and preparation of the prospectus document based on that plan; (iii) rallying development partner contributions in a coordinated manner was a success, increasing the number of donors and the total financing support pledged at the donor financing roundtable. Other key benefits from a well-prepared SWAP potentially include: increased predictability (and possibly scale) of sector funding from donors; increased transparency and accountability; more effective partnerships; increased donor coordination/alignment, leading to lower transaction costs for disbursing and receiving donor funds; and results that track national targets and priorities. Experience with rural electrification efforts suggests that local community participation brings many benefits in terms of improving design, mobilizing contributions in cash or in kind, and increasing local ownership and operational sustainability. Early community involvement can also help identify those particularly in need of assistance and ensure that community voice and participation are embedded in the design.&nbsp; Developing local capacity to operate and maintain installations and equipment is critical to success and for spurring local economic development. Helping to grow local energy markets that support entrepreneurship is another way of empowering local communities. Overall, the SWAP experience has shown that sector-wide planning can be very effective if certain conditions are present, including: i) Strong government buy-in; ii) Coordination facilitated through a dedicated platform (the Sector Working Group); iii) Data collection from widespread sources; iv) Least-cost planning; v) financial sustainability (taking account of the duration of subsidies).
  
 
= Effectiveness<br/> =
 
= Effectiveness<br/> =
  
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The micro-hydro power systems constructed with support from REDP, have a cost range of US$1280-1780 per kW.&nbsp; The investment cost per connected household (cost of micro-hydro infrastructure and&nbsp; village distribution system) is estimated at about US$ 325 of which approximately US$70 is paid by the customer (for internal wiring and a connection charge).&nbsp; This is good value for customers, who have reduced their average annual household spending on energy by US$22 (from US$41 to US$19), which represents a payback period of about 3 years for an improved and far more convenient service.&nbsp; It also reflects well on the government support that has been provided (with input from the United Nations Development Programme), particularly the funding to offset capital costs, which is otherwise a key barrier. The REDP has been recognized as a "best practice" programme, receiving awards in various national and international events for the approach and achievements made. It should however be recognised that REDP is aimed to advance rural households from no electricity supply to the first step on the energy access ladder.&nbsp; Committed finance of US$325 per household at an average of US$1500/kW equates to energy capacity of less than 200W which is enough to provide a tier 2 level of energy access at best.&nbsp; The REDP has made very positive process, but represents just a foundation for the increased power supply required to meet the customers' social and economic development needs.
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The SWAP in Rwanda enabled the development of a country-led, results-focused framework that brought together development partners and other stakeholders to coordinate resources for national electrification. Rwanda was one of the first countries to use a SWAP in the energy sector to increase access to electricity.&nbsp;&nbsp; This approach has been successful in Rwanda, leading to increased access to energy and more than US$ 200&nbsp;million raised toward the costs of the electrification program, which is now being implemented.&nbsp; Furthermore, implementation costs are in line with the target unit cost average of US$600 per new connection, compared to historical average costs of the pre-SWAP program, which started at US$2,000 per new connection.&nbsp; Overall, there has been clear positive value from the SWAP initiative.
  
 
= References =
 
= References =
  
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*[http://www.aepc.gov.np/rerl/uploads/publication/6attachment2.pdf http://www.aepc.gov.np/rerl/uploads/publication/6attachment2.pdf]
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*http://documents.worldbank.org/curated/en/621551468059083947/pdf/88703-REPF-BRI-PUBLIC-Box385194B-ADD-SERIES-Live-re-knowledge-note-series-LW22-New-a-OKR.pdf
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*Bouille et al (2010). Policies For Energy Access [https://pdfs.semanticscholar.org/abc5/eeed05d6f30d72169c29cad7f6f69b8002ad.pdf https://pdfs.semanticscholar.org/abc5/eeed05d6f30d72169c29cad7f6f69b8002ad.pdf]
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*https://www.esmap.org/sites/esmap.org/files/ESMAP_Energy_Access_RwandaSWAp_KS013-12_Optimized.pdf
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*[https://www.climate-eval.org/sites/default/files/evaluations/364 Rural Energy Development Programme.pdf https://www.climate-eval.org/sites/default/files/evaluations/364 Rural Energy Development Programme.pdf]
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*http://mininfra.gov.rw/fileadmin/user_upload/aircraft/Rural_Electrification_Strategy.pdf
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*[https://www.dmu.ac.uk/documents/technology-documents/research-faculties/oasys/project-outputs/working-papers/wp17---nepal-case-study.pdf https://www.dmu.ac.uk/documents/technology-documents/research-faculties/oasys/project-outputs/working-papers/wp17---nepal-case-study.pdf]
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*http://www.newtimes.co.rw/section/article/2016-06-30/201284/
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*[[Nepal Energy Situation|https://energypedia.info/wiki/Nepal_Energy_Situation]]
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*Rwanda. Eng. Yussuf Uwamahoro (Year Unknown), Rwanda Electricity Access Scale Up Program and Swap Development [http://siteresources.worldbank.org/EXTAFRREGTOPENERGY/Resources/717305-1264695610003/6743444-1268073536147/7.3.Rwanda_sector-wide_approach.pdf http://siteresources.worldbank.org/EXTAFRREGTOPENERGY/Resources/717305-1264695610003/6743444-1268073536147/7.3.Rwanda_sector-wide_approach.pdf]
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*EUEI PDF (2014), Mini-grid Policy Toolkit: Policy and Business Frameworks for Successful Mini-grid Roll-outs. Eschborn [http://www.euei-pdf.org/sites/default/files/field_publication_file/RECP_MiniGrid_Policy_Toolkit_1pageview_(pdf,_17.6MB,_EN_0.pdf http://www.euei-pdf.org/sites/default/files/field_publication_file/RECP_mini-grid_Policy_Toolkit_1pageview_(pdf,_17.6MB,_EN_0.pdf]
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*http://www.rw.undp.org/content/dam/rwanda/docs/Rwanda_MDGR_2013.pdf
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*[https://www.giz.de/fachexpertise/downloads/2013-en-bhupendra-pep-informationsworkshop-mini-grids.pdf https://www.giz.de/fachexpertise/downloads/2013-en-bhupendra-pep-informationsworkshop-mini-grids.pdf]
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*https://www.usaid.gov/powerafrica/rwanda
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*[http://www.microhydropower.net/download/mhpcosts.pdf http://www.microhydropower.net/download/mhpcosts.pdf]
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*The World Bank Group, (2012). Institutional Approaches to Electrification: The Experience of Rural Energy Agencies/ Rural Energy Funds in Sub-Saharan Africa. November 14–16, 2011 Dakar, Senegal [https://openknowledge.worldbank.org/bitstream/handle/10986/26073/763820WP0P11090s0to0Electrification.pdf?sequence=1&isAllowed=y https://openknowledge.worldbank.org/bitstream/handle/10986/26073/763820WP0P11090s0to0Electrification.pdf?sequence=1&isAllowed=y]
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*[https://www.researchgate.net/profile/Bikash_Sharma2/publication/237803040 https://www.researchgate.net/profile/Bikash_Sharma2/publication/237803040]
 
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*[https://www.stimson.org/sites/default/files/file-attachments/Developing_Nepals_Hydroelectric_Resources_-_Policy_Alternatives.pdf https://www.stimson.org/sites/default/files/file-attachments/Developing_Nepals_Hydroelectric_Resources_-_Policy_Alternatives.pdf]
 
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*[http://www.undp.org/content/undp/en/home/ourwork/environmentandenergy/projects_and_initiatives/rural-energy-nepal.html http://www.undp.org/content/undp/en/home/ourwork/environmentandenergy/projects_and_initiatives/rural-energy-nepal.html]
 
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*[http://www.undp.org/content/dam/undp/library/Poverty Reduction/Participatory Local Development/Nepal_REDP_web.pdf http://www.undp.org/content/dam/undp/library/Poverty Reduction/Participatory Local Development/Nepal_REDP_web.pdf]
 
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*[http://www.worldbank.org/en/news/feature/2015/09/26/ensuring-sustainable-rural-electrification-in-nepal http://www.worldbank.org/en/news/feature/2015/09/26/ensuring-sustainable-rural-electrification-in-nepal]
 
  
 
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{{NAE Acknowledgements}}
 
{{NAE Acknowledgements}}
  
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[[Category:Rwanda]]
 
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Description

The SWAP initiative was a plan for integrated electrification combining grid, mini-grid and off-grid technologies on a least-cost basis together with coordination of the Government and development partners under an MoU.  This was based upon utility-led grid-extension combined with private sector led off-grid electrification.  The SWAP was designed to identify the least-cost network rollout for electricity to be extended over 20 years, with an initial medium-term target for 2014.  A high-level, spatial, least-cost network rollout planning and costing platform was used to bring together demand and socio-economic data to develop an electrification plan to anchor the sector, called “Access Program Investment and TA Prospectus”.

Context

In July 1994, over one million people had been killed and millions were displaced from their homes due to the genocide against the Tutsis.  The country´s development strategy has since prioritised the need for security and stability, to be sustained at whatever cost.  Electrification of rural areas in 2008 was only 15% and the power supply increased by only 10% over the following five years, while annual peak demand grew from 50MW to almost 90MW in 2013.  However, the Electricity Access Roll-out Programme (EARP) increased access from 364,000 households in June 2012 to 590,000 households (24% of the total) by June 2016.  The government target for access to electricity is now 100% by 2020.  Rwanda is endowed with a number of natural resources, including hydro, solar, and methane gas, and has plans to generate 563MW of electric power from these sources.  But, despite positive recent electrification efforts, it currently still has only about 186 MW of installed generation capacity to serve a population of more than 10.5 million people.  The majority of its existing capacity comes from hydropower (59%) and thermal generation (40%).  Most of the generation projects in Rwanda are the result of public-private partnerships between the government and independent power producers.   Rwanda is also part of the Eastern Africa Power Pool, and has plans to import up to 30 MW from Kenya in 2017.  Based on current data (end 2016), Rwanda’s national electrification rate has reached 24.5% (1.5% off-grid, 23% on-grid). The annual consumption of electricity per capita is among the lowest in Africa, with approximately half of consumers using an average of less than 20 kWh per month. As many as seven million people still lack access to electricity.

Objectives

The first 5-year phase of the Electricity Access Roll-Out Plan (EARP) aimed to increase electricity connections from 110,000 in 2008 to 350,000 in 2014 (a target that in practice was reached by 2012), and substantially increase electricity access for social infrastructure facilities in the health and education sectors.  Under the Economic Development and Poverty Reduction Strategy for 2013–18 (EDPRS 2), the government was working towards the target of 70% of households connected by 2017.  This was revised in the RE Strategy of 2016, which replaced the previous goals with a target of 22% of households gaining access to a Tier 1 energy service (as defined in the SE4ALL Multi-Tier Framework) and 48% of households gaining access to on-grid or at least Tier 2 energy service by July 2018 (in acknowledgement of the differing service levels and the extended timeframe required to reach increasing remote areas). This goal is to be met through a combination of on-grid and off-grid supply. 100% access to electricity is targeted by 2020.

Legal Basis

Rural Electrification Strategy, prepared by MININFRA and approved by Cabinet in April, 2016.

Institutions, Roles and Responsibilities

  • Ministry of Infrastructure (MININFRA):  leads the country’s national energy policy and responsible for the co-ordination of SWAP
  • The Energy, Water, and Sanitation Authority, EWSA (the former Rwandan electricity utility):  responsible for the implementation of EARP and met the initial target in 2012 (ahead of schedule) through rapidly scaled-up implementation.
  • Rwanda Energy Group Limited and its two subsidiaries, EUCL and EDCL:  replaced the former utility EWSA in 2014; responsible for energy development and utility service delivery
  • Rwanda Utilities Regulatory Agency (RURA): regulates all the utilities that include ICT, Transport, and Energy sector, Water, Sanitation and Media; established in 2002 as an institution to build capacity and synergies across different sectors that drive economic development.
  • Water and Sanitation Corporation:  role is to develop and operate water and sanitation infrastructure and deliver related services in the country.

Interventions

The RE Strategy of 2016 sets out four distinct programmes that provide the framework for SWAP, including: 1) the provision of basic solar systems as a basic necessity to the less privileged population, 2) the establishment of a risk mitigation facility that will support the private sector, 3) mechanisms that will increase the development of mini-grids in suitable locations, and 4) the continued implementation of the Electricity Access Rollout Programme (EARP).  Least-cost planning is a particular focus of SWAP, together with the coordination of funding.  These interventions are based upon the following principles: i) Rural electrification measures are driven by economic efficiency; ii) The private sector takes a lead role in financing and delivering off grid energy access; iii) Government financial support is only used to address affordability gaps and market failures; iv) consumers have the most appropriate, cost effective technology for their needs; v) interventions are financially sustainable. The mechanisms and structures to support the delivery of targets are still at an early stage of development, though some specific steps have already been undertaken.  On 1 January 2017, Rwanda introduced cost-cutting measures for poor households by cutting the tariff for the first 15kWh consumed per month by 50%. It also reduced industrial tariffs to bring make them competitive with regional rates and brought in a time-of-use tariff for industrial customers in order to shift load to off-peak periods.  A wide range of technical assistance is being provided by international donors to make further progress, including the preparation of new procedures to facilitate private-sector led IPP investments in clean electrification projects, assistance with the planning, operation, and maintenance of generation, transmission, and distribution systems, and support for increased access to off-grid electricity.

Impacts Achieved

REG recorded a generation capacity increase of 89.5 megawatts over 2014-2016, bringing the total installed capacity to 190MW, with the Government projecting 563MW power generation in the following two years.  This is an interesting case of how access to electricity can be quickly scaled up despite deficits in infrastructure and institutional capacity. The magnitude and pace of the successes achieved under the country’s Electricity Access Rollout Program (EARP) surpassed even the ambitious targets set by the government.  The SWAP framework and process (one of the first applications of such a sector-wide approach in the electricity sector) proved to be pivotal in rallying all major stakeholders to support the sector-wide "bankability” during the donor financing roundtable for the first 5-year phase of the national electrification program (2009–14).  Under the SWAP program, the national utility has impressively ramped up its annual implementation rate from under 1,000 connections per year prior to the start of the program (2008) to a current annualized rate of 60,000 new connections.

Lessons Learned

The spatial least-cost integrated (grid and off-grid) rollout investment and implementation planning platform used in Rwanda proved to be effective because: (i) it was seen as a national development plan rather than a electricity sector plan; (ii) it was inclusive in that all key stakeholders (in-country and external) participated on an ongoing basis during preparation of the spatial plan and preparation of the prospectus document based on that plan; (iii) rallying development partner contributions in a coordinated manner was a success, increasing the number of donors and the total financing support pledged at the donor financing roundtable. Other key benefits from a well-prepared SWAP potentially include: increased predictability (and possibly scale) of sector funding from donors; increased transparency and accountability; more effective partnerships; increased donor coordination/alignment, leading to lower transaction costs for disbursing and receiving donor funds; and results that track national targets and priorities. Experience with rural electrification efforts suggests that local community participation brings many benefits in terms of improving design, mobilizing contributions in cash or in kind, and increasing local ownership and operational sustainability. Early community involvement can also help identify those particularly in need of assistance and ensure that community voice and participation are embedded in the design.  Developing local capacity to operate and maintain installations and equipment is critical to success and for spurring local economic development. Helping to grow local energy markets that support entrepreneurship is another way of empowering local communities. Overall, the SWAP experience has shown that sector-wide planning can be very effective if certain conditions are present, including: i) Strong government buy-in; ii) Coordination facilitated through a dedicated platform (the Sector Working Group); iii) Data collection from widespread sources; iv) Least-cost planning; v) financial sustainability (taking account of the duration of subsidies).

Effectiveness

The SWAP in Rwanda enabled the development of a country-led, results-focused framework that brought together development partners and other stakeholders to coordinate resources for national electrification. Rwanda was one of the first countries to use a SWAP in the energy sector to increase access to electricity.   This approach has been successful in Rwanda, leading to increased access to energy and more than US$ 200 million raised toward the costs of the electrification program, which is now being implemented.  Furthermore, implementation costs are in line with the target unit cost average of US$600 per new connection, compared to historical average costs of the pre-SWAP program, which started at US$2,000 per new connection.  Overall, there has been clear positive value from the SWAP initiative.

References


Authors

Authors: Mary Willcox, Dean Cooper

Acknowledgements

The Review was prepared by Mary Willcox and Dean Cooper of Practical Action Consulting working with Hadley Taylor, Silvia Cabriolu-Poddu and Christina Stuart of the EU Energy Initiative Partnership Dialogue Facility (EUEIPDF) and Michael Koeberlein and Caspar Priesemann of the Energising Development Programme (EnDev). It is based on a literature review, stakeholder consultations. The categorization framework in the review tool is based on the EUEI/PDF / Practical Action publication "Building Energy Access Markets - A Value Chain Analysis of Key Energy Market Systems".

A wider range of stakeholders were consulted during its preparation and we would particularly like to thank the following for their valuable contributions and insights: - Jeff Felten, AfDB - Marcus Wiemann and other members, ARE - Guilherme Collares Pereira, EdP - David Otieno Ochieng, EUEI-PDF - Silvia Luisa Escudero Santos Ascarza, EUEI-PDF - Nico Peterschmidt, Inensus - John Tkacik, REEEP - Khorommbi Bongwe, South Africa: Department of Energy - Rashid Ali Abdallah, African Union Commission - Nicola Bugatti, ECREEE - Getahun Moges Kifle, Ethiopian Energy Authority - Mario Merchan Andres, EUEI-PDF - Tatjana Walter-Breidenstein, EUEI-PDF - Rebecca Symington, Mlinda Foundation - Marcel Raats, RVO.NL - Nico Tyabji, Sunfunder -


NAE Overview Page

Any feedback would be very welcome. If you have any comments or enquires please contact: mary.willcox@practicalaction.org.uk, benjamin.attigah@euei-pdf.org, or caspar.priesemann@giz.de.

Download the Tool as a Power Point: https://energypedia.info/images/a/aa/National_Approaches_to_Electrification_-_Review_of_Options.pptx

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