The Government of Rwanda has set ambitious targets for access to renewable energy. In the context of its Promoting Renewable Energy Programme, the Netherlands has a program of 140 million euro in renewable energy production and use in the Great Lakes region, supporting regional investments as well as the ambitions of the government of Rwanda.
Electricity Access Roll-out Program
Access to electricity takes a central place in the national development strategy of Rwanda. With only 10% access, Rwanda falls well below the African average of 20-25%. Consumer tariffs are 19 dollar cents per kWh, among the highest in the world. The Government of Rwanda aims to increase the number of connections of households and enterprises and move away from fossil energy. Rwanda aspires to eventually rely totally on renewable energy sources. Most Rwandan households will be connected to the grid, but remote areas will rely on off-grid solutions, including micro hydropower and solar energy.
The Netherlands committed 30 million euro (on a total budget of 380 million dollar) for the Rwandese Electricity Access Roll-Out Program. In addition, the Netherlands contributes 25 million euro through KfW for the interconnection between the national grids of Rwanda and the Democratic Republic of Congo.
Micro Hydro Plants
The Private Sector Participation Hydro Project (PSP Hydro) aims to develop a private hydropower sector in Rwanda. It supports the construction of micro hydro power plants (MHPPs) and invests in enabling environment and capacity building for private companies in order to produce electricity, operate and maintain micro hydro power installations. The Netherlands supports this project through the Energising Development Partnership.
PSP Hydro currently supports the construction of six private MHPPs. Murunda (96 kW) has been operating since March 2010. Two more became operational early 2012: Mazimeru (500kW) en Musarara (438 kW). Three more projects are in preparation. A standard Power Purchase Agreement (PPA) model has been put in place, which provides certainty for private power producers that their electricity will be bought, make them more willing to invest and make it easier to obtain loans. Feed-in tariffs have been introduced, as well as an environment clearance and standardized license procedures (which reduces the time to obtain a license from six months to two weeks). These legal, institutional and regulatory improvements will make it much easier to realize new micro hydro plants with private investment in Rwanda in the coming years.
The Rusumo Falls Hydro power Plant will generate 80 MW electricity for three countries: Burundi, Rwanda and Tanzania. An artificial lake of around 32,000 ha will be created bordering all three countries. The feasibility studies for the plant and its connection to the national grids in the three countries included a detailed Resettlement Action plan for the 6.000 affected households. The construction itself will start in 2013 and be completed in 2016. The Netherlands will invest 12 million euro through the World Bank and the African Development Bank.
The Netherlands invests 10 million euro (in the period 2008 – 2012) in a reforestation project that is implemented by the International Fertilizer Development Center (IFDC). It aims at the creation and management of 10.000 ha forest on private land with trees that are used for the production of sustainable firewood and charcoal. This will create at least 4.000 sustainable jobs, 29.000 tons of firewood and 12.000 tons of charcoal.
In Rwanda, the Netherlands is also involved in a methane extraction project at Lake Kivu. The Dutch funds are invested through the Netherlands Development Finance Company (FMO), who together with other development banks has financed the first phase of the KivuWatt project. This first phase consists of building a gas extraction facility and 25 MW power plant in Kibuye, Rwanda. Next phases will reach a total of 100 MW. This project not only supports cheap electricity generation, it also removes and processes otherwise hazardous methane gas that is trapped under the surface of Lake Kivu. With pressure building up, release of this gas into the atmosphere would be lethal for the local population and would contribute to global warming.