The Government of Rwanda recognizes the role energy plays in boosting the socio-economic development of the country, and as such is undertaking a variety of initiatives to attract direct private investment in the energy sector including reducing tariffs for consumers to promote industry and exports; and drafting laws on electricity and gas which have been submitted to Parliament for approval.

Such laws also reinforce the function of the Rwanda Utilities Regulatory Agency (RURA), which will provide the regulatory framework for private investors. With new interconnections between Rwanda and the sub-region, there is the potential for the country to share power with its neighboring countries through a common power pool and possible export and import of power.  Potential areas of interest to investors in the energy sector are Hydro power, Geothermal, Peat, Solar energy, Papyrus and Hydrocarbons.

 

Concerning the Hydro power, the natural terrain of Rwanda provides abundant opportunities for hydroelectricity. More than 333 potential micro hydro sites have been identified across the country which can be developed by private companies with mini stand-alone grids that sell electricity to local people and the excess power to the national power utility. Currently 21 of these 333 sites are being developed. There are also attractive large scale regional hydro projects which require investors; Rusizi III (Rwanda, Burundi and DRC) with an estimated installed capacity ranging from 80 to 140MW. Feasibility studies have been completed and the report is available; Rusizi IV (Rwanda, Burundi and DRC) with an estimated installed capacity of 205MW. Pre-feasibility study available; Rusumo (Rwanda, Tanzania and Burundi) with an installed capacity of 62 MW. Feasibility studies for both the power plant and transmission lines to the three countries were completed in June 2009 with World Bank and ADB funding.

 

About the Geothermal area, Rwanda is one of the only African countries with potential prospects for geothermal resource utilization. Assessment to evaluate its potential has been completed.  A remote sensing survey, geochemical surveys and geophysical reconnaissance surveys (Magneto Telluric-MT and Transient Electromagnetic-TEM) have been carried out. Preliminary results indicate that a medium to high temperature geothermal system may exist south west of Karisimbi Volcano.  Additional MT/TEM data points for detailed modeling have been planned to accurately define the size and depth of the heat source, reservoir size and inflow/outflow/ recharge zones, collect information on the reservoir characteristics and capacity, and propose an appropriate development plan.

Peat

Rwanda has about 150 million tons of peat in its marshlands, of which approximately one third is commercially extractable and can be burnt as source of heat or for the production of electricity. This is also another important area of interest for investors. While power production from peat is still at the planning stage, the use of peat as fuel has already been tested in community institutions, for brick making and in the cottage industry. This sector is open to potential investors.

 

 

Solar energy panels

 

The Solar energy sector has two options: the Solar Voltaic where solar power systems will electrify households and institutions located very far from the grid to be connected in the near future. A high number of solar power systems will need to be procured for the electrification of public institutions and households, providing an opportunity for suppliers, installation and maintenance companies in Rwanda.

 

Solar Water Heater (SWH)

 

The second option is the (SWH) that will provide significant amount of electricity which can be utilized to extend the electrical grid. It is estimated that heating water through solar energy in the service sector (60 hotels, 400 health centers and 20 hospitals during the EDPRS period) will require approximately 20,000 m² of solar sensor surface. This will create savings of 2,000 tons of oil equivalent (TOE) per year or 40,000 TOE during the average life span of the equipment (20 years). This corresponds to a saving of USD 28 million for an initial investment of USD 10 million. The internal rate of return would be 7 years considering the expenses for maintenance and management. The Government and people of Rwanda would benefit from the SWH initiative in different ways.

 

Papyrus as another potential area of investment is a renewable resource covering 23,000 hectares mostly around Kigali City. It can be harvested on a 6 month rotation basis without damage to the environment and has a yield of 15 tons per year. This is enough to generate 75,000 tons of charcoal which could replace traditional charcoal in Kigali City.

Regarding the Hydrocarbons; the government encourages the participation of independent power producers into the power generation business. The energy remains a key driver for social economic growth and Rwanda has to prioritize energy in its agenda. The methane gas power plant is expected to increase the current power capacity in Rwanda by 40% and would reduce the cost of electricity. The extraction of gas from Lake Kivu is also likely to reduce the possible risk of eruption and avoid major loss of life along the Lake. Currently Rwanda’s domestic power comes from hydropower, limited solar energy and diesel-fired energy and firewood.

Kivu Methane Gas Project

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