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

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Table 5.6: Technical Assistance Required for Access ProgrammeTechnical Assistance 2009 2010 2011 2012 Total EDPRSGrid-based componentElectrogaz Strategic Planning 1.7 1.7 1.7 1.7 6.9Programme implementation unit 1.1 1.1 0.6 0.6 3.8Further design and planning 0.8 0.8 0.8 0.8 2.5Support to private sector 0.2 0.2 - - 0.5Lowering Programme Costs 0.2 0.2 - - 0.4Training for programme 0.5 0.5 0.5 0.5 2Total Grid Based Technical Assistance 5.3 5.3 3.7 3.7 17.9Support to MININFRA/NEDASWG Secretariat 0.8 0.8 0.8 0.8 3.2Reporting 0.7 0.7 0.7 0.7 3Micro hydro sustainability framework 0.2 0.2 - - 0.5Solar PV installation 0.1 0.1 0.1 0.1 0.4Solar hot water systems 0.1 0.1 0.1 0.1 0.3Total Technical Assistance toMININFRA / NEDA 2 2 1.7 1.7 7.4Total Technical Assistance 7.2 7.2 5.4 5.4 25.3Funding sources—customer payments (tariffs and connection charges)Financially sustainable power systems rely solely on customer payments to meet bothoperating and capital costs. However, very few developing countries have been able toachieve financial sustainability due to the relatively high costs associated with systemexpansion and the relatively limited ability for customers to pay cost-reflective tariffs.The ability to at least fund operating costs through customer payments is greater in Rwandathan many other African nations as a result of recent Government decisions to raise tarifflevels. The current residential electricity tariff in Rwanda is 112 RWF/kWh (approximately20c/kWh) before value added tax.Revenue collection rates are also relatively high in Rwanda due to the extensive use ofprepayment meters. Electrogaz reports that in 2007, the utility was able to collect payment52
on approximately 75 percent of residential and institutional bills, and over 80 percent of billsissued to larger customers. 30Additional tariff revenues, combined with increasing support from the Government, havehelped to improve the financial health of the Rwandan electricity utility over the past fiveyears. As discussed in Box 5.2 below, the national utility has historically struggled to meet itsoperating costs from available funding sources, but has covered its costs from availablerevenues since 2005.Box 5.2: Historical Financial Performance of ElectrogazThe financial health of the electricity utility in Rwanda is an important success factor forthe access programme. Electrogaz will have primary responsibility for implementing theaccess programme, and it is therefore crucial that financial support provided to extendelectricity access is not put at risk by poor utility financial performance.The graph below provides an overview of Electrogaz’s financial performance from 2003–2007 by focusing on bottom-line profits and losses. These profit and loss figures have beenobtained from trial balances provided by Electrogaz for the past three financial years toobtain a reasonable view of the financial position of the company before the release ofaudited financial statements for this period. 311053 36Profit / Loss (US$ million)-(5)(10)(15)(20)2003 2004 2005 2006 2007(25)(30)(28)(26)Higher revenues, combined with lower interest payments, have enabled Electrogaz tomake a small profit from 2005–2007. These results are a significant improvement on thelarge financial losses made by Electrogaz in 2003 and 2004.YearThe Government recently commissioned an external consultant to help understand whethertariffs can be adjusted to account for the lower cost of new generation sources. 32 TheGovernment also plans to complete a full tariff study this year to fully understand the costsof serving different customers with electricity. The initial tariff study found that the30 Electrogaz Annual Report, 2007.31 An accounting firm from Mauritius is currently completing an audit of the financial accounts of Electrogaz from 2003–2007. The results of this audit are expected in coming months.32 Vernstrom. “Tariffs, taxes and subsidies in the electricity sector: An assessment and guide for public policy.” Reportcommissioned by the Ministry of Infrastructure, Rwanda. 2008.53
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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
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There are three sources of funds fo
Page 17 and 18: 1 Purpose of ProspectusThe Governme
Page 19 and 20: 2 Access Programme is a Critical Pa
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’
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: Table 5.5: Capital Cost of Sector I
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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