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

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Table 5.4: Estimated System Operating Costs (2009–2013) (USD million)Programme Component 2009 2010 2011 2012 2013Current connections– Generation 24.7 29.5 24.8 25.3 25.2– Transmission and Distribution 4.3 4.0 3.6 3.3 3.0– Other (staff, administration, interest) 1 5.1 5.3 5.5 5.7 5.8New grid connections– Generation 2.0 8.0 12.8 18.1 24.3– Transmission and Distribution 0.3 0.9 1.8 2.6 3.7– Other (staff and administration) 0.7 1.8 2.8 3.7 4.7Off-grid connections 0.7 1.5 2.8 4.8 1.4Operating contingencies 4.5 5.1 4.3 3.8 3.4Total 42.3 56.1 58.4 67.4 71.5The average cost of supplying existing customers in Rwanda is projected to be around 8–10c/kWh, while new connections made under the access programme have a higher averagesupply cost of between 10–13c/kWh. This is because new connections are assumed to besupplied by higher-cost plants. The overall average supply cost is projected to be around9c/kWh. These estimated per unit supply costs are lower than those recently incurred inRwanda because expensive rental units have been used in the past four years. Forcomparison, the average cost of supply in 2007 is estimated to be 17c/kWh. 28Funding needs—capital investmentsThe Government, development partners and private investors have proposed a number ofcapital investments in new generation and transmission that must be funded, in addition tothe access programme. It is important to account for these investments in planning theaccess programme because the Government and development partners have constraints onthe amount of funding that can be committed to the energy sector.Estimates of the capital costs accounted for in this Prospectus are shown in Table 5.5(below). Because most new generation capacity is treated as being repaid under powerpurchase agreements, the capital costs of constructing most new generation plants are notshown in Table 5.5 (instead payments under power purchase agreements are assumed to besufficient to cover operating expenses and repay capital costs). The capital cost for newgeneration shown in Table 5.5 is for rehabilitating existing micro-hydro sites and conductingfurther hydro studies.28 Electrogaz Annual Report, 2007.50
Table 5.5: Capital Cost of Sector Investment Plans (excluding generation under PPAs)Capital Investments 2009 2010 2011 2012 2013 TotalGeneration 22.3 12.7 17.5 17.6 4.4 74.5HV Transmission 1 25.7 19.9 11.1 11.8 11.8 80.3Distribution Rehabilitation 0.2 0.2 0.2 0.2 0.7 1.5Access programme 56.1 78.9 84.2 92.1 66.3 377.7Total 104.3 111.7 113.0 121.7 83.2 534.0Notes:1 Transmission expenditures also include allocations for the rehabilitation of existing transmission anddistribution networks, including the rehabilitation at Gikondo under the UERP.The Medium Term Expenditure framework highlights that the Government has committedto provide considerable funds to the energy sector, in addition to its commitments to theaccess programme (Vernstrom, 2008). The Government will provide most of theUS$80 million highlighted in Table 5.5 for new transmission facilities, with support fromdevelopment partners such as the African Development Bank, on regional transmissionlinks.Private investors are also contributing an increasing amount in the energy sector. Mostnotably, the US-based company Contour Global signed a US$325 million deal to develop100MW of methane gas fired generation at Lake Kivu. 29 In addition, development partnersare working with private entrepreneurs on several micro-hydro sites.Funding needs—technical assistanceTechnical assistance will be an important component of the proposed expansion plan forRwanda’s electricity system. The electricity utility will need to enhance its capacity to planand develop as a company, and a strategic plan has been prepared for the new electricityutility that estimates the cost of the technical support required (Hampton, 2009). Differentaspects of the access programme will also require technical support. An initial estimate ofthese costs is provided in Table 5.6 (below).29 See Contour Global http://www.contourglobal.com/# (Accessed March 16, 2009).51
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Rwanda ElectricitySector AccessProg
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Table of Contents1 Purpose of Prosp
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Figure 2.2: Comparative Data from A
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Glossary of TermsAbbreviations and
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Executive SummaryThe Government of
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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
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Page 21 and 22: supply capacity is available as exp
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’
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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: which estimate 370GWh of domestic e
Page 69 and 70: on approximately 75 percent of resi
Page 71 and 72: • The capital costs of the access
Page 73 and 74: • EPC contracts for half of the n
Page 75 and 76: Managing Director of RECO will then
Page 77 and 78: Figure 6.2: Overview of Programme M
Page 79 and 80: The electricity utility is well-pla
Page 81 and 82: To account for funds committed to t
Page 83 and 84: Impact on funding requirements-US$1
Page 85 and 86: 7.3 Management of Development Partn
Page 87 and 88: ReferencesColumbia Earth Institute.
Page 89: T: +1 (202) 466-6790F: +1 (202) 466
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