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Rwanda offers investment opportunities and is amongst the region’s fastest growing economies

In 2014, Rwanda’s energy sector developments were seen to be transforming the country into Africa’s next best business opportunity.

This article originally appeared in Issue 3 2014 of ESI Africa print magazine [page 56]. The digital version of the full magazine can be read online or downloaded free of charge.

Rwanda’s energy sector landscape is changing rapidly – demand for energy has grown exponentially over the past two decades due to increased business activity and a growing middle class. Plans for the next 36 months include increasing power access from 21% to 70%, with an installed generation capacity of 563MW, up from the current 119MW. In order to achieve this, the country needs investments worth $3 billion, with the expectations that one third of this investment will be driven by the private sector.

The former national utility, Energy, Water and Sanitation Authority (EWSA) had made an enormous contribution to meeting Rwanda’s power demands.

The Electricity Rollout Access Project (EARP), which continues to give people access to the national grid, is just one of these. However, thinking within the Rwandan power sector was that EWSA had reached its strategic and operational ceiling, particularly in light of its dual role of delivering both water and power service.

EWSA official reform

During a cabinet meeting in July this year [2014], the President of the Republic of Rwanda, Paul Kagame approved the Prime Minister’s order determining modalities to transfer responsibilities and property of EWSA, alongside the executive appointments in the two corporations created to replace it.

By creating the Rwanda Energy Group Ltd (REG), which will operate as the holding company, and the Water and Sanitation Corporation Ltd (WSC), government sought to have undivided attention in each sector and thereby be more effective to achieving national development plans.

The two subsidiaries (under REG) will work to become more efficient, dynamic and sustainable with a view to making the industry attractive for investment while meeting government targets. The corporations are 100% state owned, operating on corporate principles.

The reform allows the private sector to actively participate in electric power production, transmission, distribution and trading both within and outside the country. Furthermore, it simplifies the tendering procedures to allow local investors to bid for contracts.Rwanda's energy sector reform

Encouraging foreign investment has been, and continues to be, a key driver for the government.

More than 85% of the current energy consumed in Rwanda comes from biomass, with a mere 4% from electricity. Additionally, average energy consumption in the country is 41kWh, compared with 457kWh in sub-Saharan Africa and 1,155kWh in the rest of the developing world.

The government is actively pursuing a programme to change the energy mix within the country, and taking advantage of local resources such as peat, geothermal, hydro, solar, methane gas and LPG. This forms part of an overall initiative to increase generation capacity and mix by 2017 to the following: peat (255MW), methane (75MW), hydro (140MW) and solar (18.5MW).

According to a report by EWSA: “Although the electricity access level in Rwanda is still low compared with Africa’s and sub-Saharan Africa’s average access rates of 40% and 31% respectively, the country’s electricity access rate has more than tripled from 5% in 2005 to the current access rate of 18%. To achieve the above access rate target above by 2017 (Ref. Energy Sector Strategic Plan 2013-2017), Rwanda will explore both on-grid and off-grid solutions ranging from solar home systems to small off-grid hydro installations.”

Discussions are already underway to import power from countries such as Ethiopia, with a plan to downsize and phase out thermal generation in Rwanda by 2018.

This article originally appeared in Issue 3 2014 of ESI Africa print magazine [page 56]. The digital version of the full magazine can be read online or downloaded free of charge.

The ongoing interconnection projects with Democratic Republic of Congo, Uganda and Burundi, Rwanda’s membership into the Eastern African Power Pool (EAPP) and the three regional hydro projects i.e. Rusumo (80MW), Rusizi III (137MW) and Rusizi IV (287MW) will also boost Rwanda’s energy sector, providing the supply routes and reserve energy to cater for the expected double digit annual economic growth.

Rwanda’s energy sector investment opportunities in 2014

Rwanda’s energy sector boasts of a great deal of untapped resources for power generation. Potentials include:

Hydro power:

Hydro currently constitutes the largest source of energy and is expected to remain a major source for a foreseeable future. As per the hydro atlas, there exist more than 300 Micro and Pico hydro sites in different parts of the country. Available hydropower potential from local sites is estimated at more than 100MW. Feasibility Studies for up to 40 micro hydro sites are available. Investment opportunities also exist for some regional hydro projects (137MW Rusizi III and 287MW Rusizi IV) expected to come on stream before 2025.

Methane gas:

The methane in Lake Kivu is estimated to be sufficient to generate 700MW of electricity over a period of 55 years. Currently a 4.2MW pilot plant is in operation while another 3.6MW is under construction by a local company.

Another 25MW owned by an international investor is about to be completed. Potential investment opportunities exist for an additional 50-100MW of power from methane.


The potential for electricity energy generation from peat is estimated to be at least 400MW. Rwanda plans to develop its peat resources to generate about 255MW of power by 2017. Three projects are currently on the right track i.e. the government funded Gishoma (15MW) peat plant, 120MW independent power producer by a Turkish investor.

Solar energy:

With a potential of 4.5kWh per m2 per day and approximately 5 peak sun hours, solar energy has a huge potentiality in Rwanda. The country has already engaged into solar solutions as a lighting substitute for remote areas for ICT in schools, clinics and hospitals.

Solar water heaters could be used for water heating to reduce the consumption of electricity in hospitality, clinics, hospitals and catering services and households. Investment opportunities exist in solar mini grid and solar off-grid systems.


Kigali city produces around 450 tons per day of solid waste of which between 300 and 350 tons per day is centrally collected. The fraction of organic waste comes from households, restaurants, hotels and markets, agricultural waste, livestock waste, water hyacinth etc. It is estimated that 100 tons per day of raw municipal solid can produce 1MW, using traditional thermal technologies.

The population in Kigali is expected to reach about 1.5 million by 2020. It is believed that the waste collected will reach about 1000 t per day. There are therefore currently an estimated 5MW of investment opportunities in waste-to-power. By 2020, the opportunity will stand at 10MW. The Ministry of Infrastructure and Kigali City coordinate waste-to-power investments.

Geothermal energy:

Geothermal energy in Rwanda’s volcanic area of the Northern Province and the Western Province are estimated to have a generation capacity of between 170MW and 320MW respectively. Exploratory drilling on the first two wells has been completed on Karisimbi prospect and results are being analysed to guide the way forward for future geothermal exploration. If the resource is proven, investment opportunities could be available for private investors at Bugarama, Gisenyi and Kinigi prospects. ESI

This article originally appeared in Issue 3 2014 of ESI Africa print magazine [page 56]. The digital version of the full magazine can be read online or downloaded free of charge.


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