As the global leaders gather in Glasgow, UK for the COP26 UN Climate Change Conference, energy transitioning has emerged as an important pillar of addressing climate change.
Environmentalists say that if the world is to limit global warming to 1.5 degree Celsius, countries will need to reduce global fossil fuel production by an average of 6 percent per year over the next decade.
It is in this context that Emmanuel Hategeka, the Ambassador of Rwanda in UAE, has said the growing Rwanda- International Renewable Energy Agency (IRENA) cooperation opens doors to public and private entities in the renewable energy sector in Rwanda and East Africa.
Headquartered in Abu Dhabi, IRENA is an intergovernmental organisation that supports countries in their transition to renewable energy and serves as the principal platform for international cooperation, a centre of excellence, technology, resource and financial knowledge on renewable energy.
It promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy in the pursuit of low-carbon economic growth.
Rwanda joined IRENA in June 2009 which has 166 member states.
Hategeka, who is also Rwanda’s first Permanent Representative to the agency, recently presented his credentials to IRENA this year.
He said that renewable energy is expected to play a central role in delivering Rwanda’s ambitious climate action pledges known as "Nationally Determined Contribution (NDC)”, submitted to the United Nations Framework Convention on Climate Change in May 2020 for 38 percent reduction of greenhouse gas emissions by 2030.
The country’s efforts to limit its contribution to climate change and adapt to the consequences over the next decade will require approximately US $11 billion.
Actors in the renewable energy sector in Rwanda have been urged to share projects for consideration by partners collaborating under ‘IRENA’s climate investment platform’ in addition to knowledge and best practices exchange.
"Stepping up cooperation with IRENA could give an impetus to ongoing Rwanda’s energy transition. Enhanced partnership with IRENA will promote exchange of knowledge and best practices in renewable energy.
We will work together in resource mobilisation efforts to implement our Nationally Determined Contribution especially for renewable energy targets. We look forward to scaling up in our cooperation in renewable energy transitioning for a greener future of Rwanda,” Ambassador Emmanuel Hategeka said.
With over 300 partners collaborating under ‘IRENA’s climate investment platform, "stakeholders with viable projects in renewable energy and climate investment around the world can bank on the Agency for resource mobilisation.”
By 2020, the IRENA/Abu Dhabi Fund for Development Project Facility resulted in the selection of 32 renewable energy projects that benefited from $350 million in concessional loans and improved the lives of over 2.5 million people around the world.
In Africa, the agency has supported different national and regional programs and initiatives including Africa Clean Energy Corridor, a regional initiative to accelerate the development of renewable energy potential and cross-border trade of renewable power within the Eastern Africa Power Pool (EAPP) and Southern African Power Pool (SAPP).
This is in addition to the West Africa Clean Energy Corridor, a regional initiative supporting the creation of a regional power market in the West Africa Power Pool.
"Increasing the share of renewable energy is enshrined in Rwanda’s vision of becoming a green, climate resilient and low carbon economy by 2050,” Hategeka added.
Rwanda targets to achieve universal access to electricity by 2024 with a production capacity of 556MW of which renewable energy will constitute 60 percent of the energy mix mainly from hydro projects and solar energy.
As of end August 2021, access to electricity in Rwanda is recorded at 65.4 percent with 47.6 percent grid connections while 17.8 percent accounts for off-grid connections.
The current installed power generation capacity is 235.6MW.
Key projects that may attract partners under climate investment platform
According to Hategeka, there are some key ongoing and new projects in Rwanda that may attract IRENA partners under the climate investment platform.
These include Capitalization of the Renewable Energy Fund to support in addressing the affordability challenge for low-income households through the Result-Based Financing framework, managed by Rwanda Development Bank and Rwanda Energy Group/Energy Development Corporation Limited.
The project encompasses Support to private companies through low-cost loans or direct equity as well as grants.
The projects also include construction of a model Green City in Kigali that will develop a blueprint that can be replicated across the country.
The project has some parallels with Masdar City in Abu Dhabi in terms of sustainability and green technology.
The costing of Green City Delivery is estimated at $5 billion over the next decade.
The first phase requires approximately $86 million for the construction of 1,680 housing units.
Other projects include financial support (Equity, Concession loans, Grants, ..) in the dissemination of clean cooking technologies in institutions like schools, hotels and restaurants and households by adopting energy efficient cooking fuels such as LPG, high efficient pellets, briquettes and wood stoves.
Energy Efficiency in the Transmission and Distribution Infrastructure , Energy Efficiency for appliances- that envisages the Capitalization of the Cool Lease Fund for the dissemination of energy efficient cooling appliances-, Renewable Energy Generation project with a focus on Rehabilitation of Nyabarongo I Hydro Power Plant and Construction of small hydropower plants as well as project to produce cooking gas from methane gas in Lake Kivu are among other projects that can leverage IRENA’s investment platform.
Incentives
Attractive incentives and facilitation packages have been put in place to facilitate investments in renewable energy and energy efficiency in Rwanda.
For private developers in the power sector, incentives include provision of investment certificates for the investor’s special treatment, a variety of non-fiscal and fiscal incentives, tax exemption including VAT on importation of some renewable energy equipment, and preferential corporate income tax of 15 percent.
Corporate income tax holiday of up to seven years for energy projects producing 25MW, Power Purchase Agreements of 25 years as minimum, Established Legal Framework to stimulate Public Private Partnership, Renewable Energy Fund (REF) to support Off Grid solar and Clean Cooking Technologies development are among the incentives.
Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA) said that, "To meet the needs of rapidly growing economies, the East African region including Rwanda requires significant levels of investment in its power generation infrastructure.”
It is important that such long-term planning decisions are well-informed and present a balanced picture of all potential pathways including renewable energy options, he added.