NAE Case Study: Rwanda, Sector-Wide Approach to Planning
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”.
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.
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.
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.
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.
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.
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).
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.
Overview of Other Country Case Studies
- 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
- 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
Authors: Mary Willcox, Dean Cooper
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 -
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