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

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