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

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7 Support from Development PartnersExpanding electricity access at the rate envisaged in Rwanda will not be possible withoutstrong commitment from development partners. Capital grant contributions of aroundUS$270 million will be required for the programme over the next 5 years. Several donoragencies are active in Rwanda’s energy sector, and some of the off-grid investmentspresented in this Prospectus have already received funding from development partners.This Section reviews the funding required from development partners for the accessprogramme. Section 7.1 discusses the funding requirement and support that has already beencommitted to the access programme. An assessment of key programme risks is thenpresented in Section 7.2. Finally, Section 7.3 provides an overview of how fundingallocations will be treated under the programmatic approach to electricity access investmentsand how funding flows will be monitored.7.1 Funding Requirements from Development PartnersAs set out in Section 5 of this Prospectus, the funding available from customer paymentsand the fiscal commitment from the Government leaves around $270 million of the costs ofthe access programme that development partners are being asked to contribute.Certain off-grid components of the access programme have already received fundingcommitments from development partners. These commitments reduce the total amount thatneeds to be raised from development partners to achieve the new connections planned inthis Prospectus.Table 7.1 presents off-grid components in the access programme that have already receivedsome funding commitments. Although, most funding relates to planned projects that havebeen factored into this Prospectus, some funding does not yet relate to specific investments.Table 7.1: Existing Donor Support for Access Programme Components (US$ million)WoldBankNetherlands EU GtZ BTCExistingSupportMicro Hydro 1 0.3 5.2 2.0 18.8 26.3Solar 6.3 1.9 8.2CFLs 1.2 1.2Total 1.2 0.3 11.5 2.0 20.7 35.7Source: MININFRA, Rwanda Public Procurement Authority (2008)Notes: 1 Support for the access programme under current micro-hydro projects has been calculated as aproportion of total investment costs assuming an ADMD of 0.3kVA and an average connection costof US$1,200 (excluding new transmission facilities for new grid connected micro-hydro sites).The total cost of micro-hydro schemes already under development in Rwanda is overUS$70 million—including the costs of developing the generation source and the cost ofproviding connections for households and social institutions. Existing micro-hydroinvestments are administered by GtZ (US$3.5 million), BTC (US$49.5 million, includingUS$13 million co-funding from the EU), and the Government/UNIDO (US$16.9 million).64
To account for funds committed to these micro-hydro plants in this Prospectus, the cost ofnew connections made by these schemes has been removed from the amount to be raisedfrom development partners.Another notable example of early donor commitment to the access programme is the solarenergy project funded by members of the European Commission. Under this programmerural schools, health centres and administrative offices will receive electricity supply usingsolar PV installations. An international tender is already underway for the supply andinstallation of photovoltaic equipment for health centres, applying funding received fromPEPFAR. 35 These initiatives have also been taken into account in calculating the totalsupport that still needs to be raised from development partners, and indicate that sufficientfunding already exists to achieve the target of electrifying all health centres by 2012.In addition, the African Development Bank proposes to fund regional transmissioninterconnections. Although these investments do not strictly fall within Rwanda’s accessprogramme, greater regional power trading would help to support system reliability followingthe addition of the new connections made in Rwanda, and would also enable more powerexports from Rwanda in the event that surplus generating capacity becomes available.Accounting for the funds already committed by donors, approximately US$225 millionremains to be funded. Table 7.2 presents the calculation of the amount that needs to beraised to support the access programme presented in this Prospectus, starting with the totalcapital cost of the programme and subtracting existing sources of funding from Electrogaz(through surplus operating cash flows), connections charges, Government contributions andexisting donor commitments.Table 7.2: Summary of Access Programme Support Required (US$ million)Capital costs of access programme 377.6Less: Self financing from Electrogaz 39.5Less: Revenue from connection charges 27.9Less: Government contributions 50.0Less: Existing donor commitments 35.7Support Required 224.57.2 Programme Risk MitigationThe major risks facing the access programme are listed in Table 7.3 (below), together with abrief description of the mitigation measure in place to minimise the impact of each risk. Ahigh-level sensitivity test for each risk has also been conducted to evaluate the potentialimpact of each risk on programme costs and objectives. Unless stated otherwise, the impacton new connections is estimated using an average total cost per connection of US$1,200.35 Rwanda Public Procurement Authority (RPPA). “International tender notice: Supply and installation of photovoltaicequipments for health centres in Rwanda.” 2008.65
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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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supply capacity is available as exp
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Table 2.2: EDPRS Targets for Expand
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important for the access programme,
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Central GovernmentThe Government’
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Page 41 and 42: • Presidential priorities for ele
Page 43 and 44: Figure 4.8: Least Cost Grid Priorit
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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 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
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: The electricity utility is well-pla
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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