Volume I: Investment Prospectus Rwanda Electricity Sector Access ...

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• Secondly, commissioning of the UERP thermal plant towards the end of 2008 hasallowed rented units to be displaced, lowering the overall cost of electricity supplywhile still meeting forecast demand in 2009• Thirdly, planned investments in hydro, methane gas and micro-hydro generationwill support system expansion to 2013. Figure 2.1 adds new generation capacityaccording to current expected commissioning dates provided by MININFRA.The 9.5MW hydro plant at Rukarara is projected to be available from the end of2009 and the 27.5MW plant being built at Nyaborongo is expected to becommissioned at the start of 2013. A new 25MW methane gas plant at Lake Kivuis expected to be available from the start of 2011, and new micro-hydro plants areexpected to be commissioned incrementally from 2009–2012.Figure 2.1: Generation Expansion—From Supply Shortage to System Expansion250Installed Capacity (MW)200150100System ExpansionEmergency CapacityExisting SupplyForecast Demand (t+1)5002004 2005 2006 2007 2008 2009 2010 2011 2012 2013Source: Electrogaz Reports and Government EstimatesFigure 2.1 (above) indicates that planned new generation capacity will be sufficient to meetprojected domestic demand, even under the high demand scenario in the Master Plan. Asdiscussed later in this Prospectus, the Government expects that the additional generationcapacity will both improve reliability and will be available for trade with other countries inthe region as transmission interconnections are developed and the East Africa Power Poolprogresses.Table 2.1 (below) considers the impact of delays in commissioning new generation plants.This highlights that a 12-month delay in any of the planned new plants over 5MW would notthreaten system reliability, with reserve margins maintained of available generation overdemand of at least 20 percent. 2 This does not mean that there is no risk of supply shortagesduring the next five years. Given the large increase in demand forecast over this timeframe,power system operators and planners will need to work hard to ensure that existing and new2In Section 4.4 we also present a high-level assessment of network capacity, which suggests that adequate capacity will begenerally available to support the new connections during the initial years of the access programme.4
supply capacity is available as expected. We also note that although planned supply appearssufficient to meet demand for the next five years, planning work needs to proceed forfurther new generation to meet demand to 2020. The Master Plan projects peak demand ofalmost 400MW in 2020 in the maximum demand scenario, while currently plannedgeneration will raise available capacity to around 250MW.Table 2.1: Impact of Potential Delays on Available Generation Reserve MarginIndicators 2009 2010 2011 2012 2013Base supply forecast reserve margin 24% 40% 39% 47% 34%Rukarara 12 month delay 24% 35% 39% 47% 34%Methane Phase I 12 month delay 24% 25% 39% 47% 34%Methane Phase II 12 month delay 24% 40% 39% 20% 34%Nyaborongo 12 month delay 24% 40% 39% 47% 26%In addition to improving supply, the electricity sector has achieved significantly betterfinancial performance in recent years. The national electricity and water utility, Electrogaz,has moved from recording annual operating losses of over US$9.1 million (RWF 5 billion) in2004 to making a small operating profit in 2007 of US$4.6 million (RWF 2.5 billion). Thisturnaround in financial performance can be attributed to three factors:• Increases in electricity tariffs from RWF 42/kWh in 2004 to current tariffs ofRWF 112/kWh (before value added tax)• Increases in Government support in the form of direct subsidies, fuel purchases andtax relief• Increases in the number of electricity customers served by Electrogaz, from around65,000 in 2004 to current connections of just over 100,000.The financial management systems within Electrogaz have also been enhanced. Anexperienced Chief Financial Officer has recently joined the utility, and the process ofauditing annual accounts has been brought up to date.Measures implemented in the past four years have greatly enhanced the operational andfinancial grounding of the electricity sector in Rwanda. The access programme will takeadvantage of these recent sector achievements to rapidly increase access to the electricity inRwanda. The time to expand access to electricity in Rwanda is now.2.2 Government Goals for Expanding Access to ElectricityExpanding access to electricity in Rwanda is central to the Government’s plan to improveeconomic growth as a means of providing employment opportunities and reducing poverty.The Government has established the “Vision 2020” framework for Rwanda’s development,which contains a focus on improving the nation’s energy, water and ICT infrastructure. Thefull benefits of these macroeconomic priorities will not be realised without enhancing accessto electricity. The access programme is supportive of the focus of economic development inRwanda, and forms part of a larger transition to use energy more efficiently andprogressively displace the use of biomass with petroleum products and electricity.5
Page 1: Rwanda ElectricitySector AccessProg
Page 5 and 6: Table of Contents1 Purpose of Prosp
Page 7 and 8: Figure 2.2: Comparative Data from A
Page 9 and 10: Glossary of TermsAbbreviations and
Page 11 and 12: Executive SummaryThe Government of
Page 13 and 14: A series of important conclusions o
Page 15 and 16: There are three sources of funds fo
Page 17 and 18: 1 Purpose of ProspectusThe Governme
Page 19: 2 Access Programme is a Critical Pa
Page 23 and 24: Table 2.2: EDPRS Targets for Expand
Page 25 and 26: important for the access programme,
Page 27 and 28: Central GovernmentThe Government’
Page 29 and 30: 3.4 Energy Sector Legislation and R
Page 31 and 32: Figure 4.1: Overview of Approach to
Page 33 and 34: Table 4.1: Variables Considered in
Page 35 and 36: Figure 4.3: Location of Administrat
Page 37 and 38: In order to provide a realistic vie
Page 39 and 40: The planning approach compares the
Page 41 and 42: • Presidential priorities for ele
Page 43 and 44: Figure 4.8: Least Cost Grid Priorit
Page 45 and 46: Figure 4.12: Least Cost Grid Priori
Page 47 and 48: Figure 4.14: Least Cost Grid Priori
Page 49 and 50: Off-grid micro hydro systemsThe com
Page 51 and 52: Table 4.4: Social Institutions Elec
Page 53 and 54: Figure 4.17 (below) indicates the l
Page 55 and 56: Figure 4.19: Overall Electrificatio
Page 57 and 58: 5 Funding for the Access ProgrammeT
Page 59 and 60: The average contract size is expect
Page 61 and 62: Estimates of the capital cost of th
Page 63 and 64: ased on how much is needed to meet
Page 65 and 66: which estimate 370GWh of domestic e
Page 67 and 68: Table 5.5: Capital Cost of Sector I
Page 69 and 70: on approximately 75 percent of resi
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• The capital costs of the access
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• EPC contracts for half of the n
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Managing Director of RECO will then
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Figure 6.2: Overview of Programme M
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The electricity utility is well-pla
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To account for funds committed to t
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Impact on funding requirements-US$1
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7.3 Management of Development Partn
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ReferencesColumbia Earth Institute.
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T: +1 (202) 466-6790F: +1 (202) 466
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