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

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• Government and development partner funding will need to be in the order ofUS$320 million to meet the remaining costs projected to 2012. This contributionwill have an important effect on accelerating growth and reducing poverty, and asincomes rise, over time the power sector in Rwanda will become self-sustaining.Figure 5.6: Funding Sources for Capital Costs of Access ProgrammeCapital Costs and Funding Sources (US$)Capital Costs ofOff-gridInvestmentsand TechnicalAssistance(US$112m)Capital Cost ofGrid AccessProgramme(US$265m)80%GovernmentandDevelopmentPartnerFunding(US$320m)10%10%Surplus fromTariff PaymentsConnectionChargesCapital Cost of Access Programme Available Funding Sources5.3 Financial Commitments for an Initial Procurement PackageThe capital costs of the access programme have been projected on a quarterly basis to 2012to ensure that cash expenditure requirements are able to be met from available sources ofcash (see Technical Annex, Section 4.2). In addition, an initial procurement package has beenestimated, recognising that promptly procuring required materials in bulk will achieve earlycost reductions. An initial procurement of materials will also ensure that the programme isnot delayed due to shortages in available materials.Although payments to suppliers under procurement contracts will generally be made upondelivery of materials, this projection helps to understand the funding commitments that willneed to be made by development partners to enter into large-scale agreements withsuppliers.The procurement packages presented in Table 5.7 is based on the projected costs of twoinitial procurement components:• Grid connections in the first 18 months of the access programme (approximately65,000 connections)56
• EPC contracts for half of the new grid connections during the second 18 monthsof the programme (approximately 47,000 connections).This suggests that financial commitments of approximately US$96 million will be needed tofund an initial procurement package and enable timely programme implementation.Table 5.7: Estimated Cost of Initial Procurement PackagesProgrammecomponentMV lineextensionsInfillconnectionsExpansionconnectionsGrid connections in 1 st 18monthsUnits required2009–2010Cost(US$ million)EPC contracts for gridconnections in 2 nd 18 monthsUnits required2010–2010Cost(US$ million)669 km 35.7 350 km 15.047,541connections18,141connections15.49.720,309connections24,405connections7.512.5Major componentsPoles, MV cable,isolators, accessoriesMeters and service cablePoles, MV cable, LVcable, transformers,meters and service cableThe initial procurement of materials will likely be followed by a regular flow of supplycontracts on an annual basis as the access programme becomes more established.5.4 Government Funding for Access ProgrammeThe Government is currently deciding on the level of fiscal contributions that will bebudgeted for the energy sector in the Medium Term Expenditure Framework to 2012.Although the exact level of fiscal contribution is not yet known, the Government willcontinue to make a strong financial commitment to the energy sector. SignificantGovernment resources have been committed to developing new hydroelectric plants atRukarara and Nyaborongo, progressing methane gas generation at Lake Kivu, supportinginvestments in micro-hydro plants and commissioning new transmission facilities. Inaddition, the Government plans to make a strong financial commitment to the accessprogramme to underscore the importance of electricity access.As a developing country, Rwanda has a number of important priority expenditures foreconomic development, and has limited fiscal room for extensive Government programmes.In addition, Rwanda reached the completion point under the Highly Indebted Poor Country(HIPC) Initiative in April 2005, which provided for debt relief for the country ofUS$1.4 billion. Under the HIPC Initiative, the Government also agreed to limits on possibleexternal borrowing to ensure that the country remains in a sustainable debt situation.Notwithstanding these restrictions, the Government is committed to the access programme.The Government is expected to be able to commit $50 million to the access programmeover the next five years, and will extend additional support to other sector investments ingeneration and transmission as required. This leaves around US$270 million required fromdevelopment partners. This funding requirement is discussed in further detail later (inSection 7).57
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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
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1 Purpose of ProspectusThe Governme
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2 Access Programme is a Critical Pa
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Page 27 and 28: Central GovernmentThe Government’
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Page 33 and 34: Table 4.1: Variables Considered in
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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
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Page 65 and 66: which estimate 370GWh of domestic e
Page 67 and 68: Table 5.5: Capital Cost of Sector I
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Page 71: • The capital costs of the access
Page 75 and 76: Managing Director of RECO will then
Page 77 and 78: Figure 6.2: Overview of Programme M
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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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