WSHPDR_2013_Final_Report-updated_version

Different donor agencies have assisted Rwanda in its
efforts to build a local small hydropower industry,
following different approaches. UNIDO followed the
route of village level management at the four small
hydropower systems they are supporting. Experience
gained in implementation led to revert to management
models in which the systems are operated through
private businesses. 4 The Dutch/German-funded EnDev
programme followed a pure private sector approach
from the outset. Under this programme, five business
consortia have been contracted to implement small
hydropower schemes. Typical participants are local
businessmen, NGOs, social institutions (hospitals), and
local and foreign investors. The EnDev programme
provides 30-50 per cent investment subsidy, technical
assistance, business support, etc., while the developer is
responsible for financial closure (15 per cent equity and
loans), construction, permits, etc. 7 Experience to date,
however, indicates a very strong preference of private
investors to supply at least a portion of the electricity
generated to the national electricity grid (and hence to
existing customers, which is contrary to the objectives
of the donors) as the interconnection gave great
comfort to the banks, who appreciated a guaranteed
sale of electricity produced. 4
A 2011 report on the pico-hydropower situation in
Rwanda by the Global Village Energy Partnership
International (GVEP International) and Entec analysed
the potential commercial market for off-grid
hydropower plants in Rwanda, with individual
generation capacities of 50 kW or less. They suggest the
market can be developed through specific interventions
by the Government, development partners or the
private sector, such as training of local developers or
financial investments. At least seven project developers
from the private sector operate in the country and have
realized around 30 pico-hydropower plants in recent
years. 8
Renewable energy policy
Given its history, Rwanda has only recently been able to
draft and enhance its environmental protection
instruments. Thus the Electricity Law was enacted in July
2011 with the aim to liberalize and regulate the sector,
to attract private investment while encouraging a more
competitive market. 9 A Draft Energy Policy is also in
place, highlighting the need to maximize use of
indigenous energy, improve access and transparency
and most importantly to promote the use of renewable
energy technology and conducive instruments such as
feed-in tariffs (FIT). 9
The Government of Rwanda is currently in the process
of developing a solar energy policy and a Solar Map,
furthermore, renewable energy feed-in-tariffs (REFITs)
are already available for small hydropower and are to be
extended towards solar generation.
Legislation on small hydropower
The Government of Rwanda issued a REFIT in February
2012 for small and mini-hydropower. The REFIT
guarantees access to the grid for renewable energy
generators and obliges the national utility Energy, Water
and Sanitation Authority (EWSA) to purchase the
renewable energy generated. It applies to hydropower
plants from 50 kW to 10 MW. REFITS are valid up to
three years. 4
Moreover, the National Energy Strategy strongly states
the specific objective to increase micro-hydro, mediumhydro
and cross-border hydropower projects to about
333 MW. 10
Barriers to small hydropower development
One of the major barriers to the development of small
hydropower, despite the motivation and instruments
provided by the Government of Rwanda, is the country’s
history which provides no incentive for foreign
investment.
Rwanda has a vast potential for producing clean energy
using small hydropower, however, efforts are often
limited by weak technical capabilities and private sector
actors. In addition, the lack of financial institutions and
the low income of the rural population further hinder
the process of small hydropower development in
Rwanda. 10
References
1. Central Intelligence Agency (2012). The World
Factbook. Available from
www.cia.gov/library/publications/the-world-factbook/.
2. Rwanda Environmental Management Authority
(2009). Chapter IX: Climate change and natural disasters
in Rwanda State of Environment and Outlook Report.
Kigali. Available from www.rema.gov.rw/soe/chap9.php.
3. Rwanda Environmental Management Authority
(2009). Chap VIII: Energy resources in Rwanda State of
Environment and Outlook Report. Kigali. Available from
www.rema.gov.rw/soe/chap8.php.
4. Gaul Mirco, Fritz Kölling and Miriam Schröder (2010).
Policy and regulatory framework conditions for small
hydro power in Sub-Saharan Africa: Discussion paper.
Eschborn. Available from
www.giz.de/Themen/en/dokumente/gtz2010-en-HERA-
EUEI-PDF-framework-conditions-hydropower.pdf.
5. Rwanda, Ministry of Infrastructure (2011). 4th Event
News: 3 more Micro-Hydropower plants to generate 3.2
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