The African Development Bank has approved a loan of $266 million to support Rwanda’s efforts in improving the east African country’s electricity supply reliability.
Under this initiative, the government is also looking to expand access to electricity as part of a drive to transform the country into an export-oriented economy.
The facility will be specifically channelled to the Scaling Up Electricity Access Programme (SEAP II) in Rwanda.
Rwanda received the Bank’s investment of $46 million in 2013 for the first phase of the programme, using investment-lending financing, which is now 90% complete and ahead of schedule.
The approved facility is split into a $192 million African Development Bank loan and a credit of $74 million from the African Development Fund.
The combined amount represents 8.2% of the government of Rwanda’s $3.3 billion budget for the Energy Sector Strategy Plan.
The Bank’s contribution to SEAP-II will be for the three fiscal years ending in 2021/22 and will be disbursed using the Results-Based Financing (RBF) model, which ensures better risk management and a results-driven approach aligned with the activities of the Bank.
Improving electricity supply reliability
The funding will support the construction of 795 km of medium voltage and 7,317 km of low voltage lines, boosting nationwide connectivity and lighting up previously unserved communities. Read more: Rwanda Energy Group unveils $20m substation facility in Gasabo district
The programme is expected to result in significant reductions of time and frequency of service interruption to customers and network losses ultimately contributing to the financial sustainability of the sector.
In the last seven years, overall access to electricity in Rwanda has more than doubled, growing from 18% to 44% as at end of June 2018.
The east African nation aims to achieve universal electricity access by 2024, using a combination of on-grid and off-grid solutions like solar home systems.
“The approved programme will support the government to add over 193,000 new on-grid and over 124,000 off-grid connections,” said Amadou Hott, the Bank’s Vice President for power, energy, climate change and green growth.