African Development Bank (AfDB) has approved two loans to co-finance a major energy project that will extend electricity access to rural Rwanda.
In total, the loans, which amount to $180 million (Rwf184 million), are expected to reduce greenhouse gas emissions and accelerate the country’s efforts to achieve universal electricity coverage by 2024.
Finances for the Transmission System Reinforcement and Last Mile Connectivity project comprise $140 million from the African Development Bank sovereign window and a $40 million co-financing from the Africa Growing Together Fund (AGTF), as well as resources from the African Development Fund (ADF), the bank indicated.
This follows the approval for $84.2 million from the resources of the ADF, the concessional window of the Bank Group, for the same project.
The project will entail the construction of over 1,000 km of medium voltage and 3,300 km of low voltage lines to boost last mile access (providing electricity to people in remote areas).
It will also build 137km of high voltage line and six substations required to strengthen the grid. Other features of the project include the installation or upgrading of more than 1,200 distribution transformers and related infrastructure.
The project will connect 77,470 households to the electricity network for the first time. It will also connect 75 schools, eight health centres and 65 administration centres, while enabling the evacuation (transmission) of 125MW of clean energy from hydropower plants.
It will also create 455 permanent jobs and 760 part-time jobs, with 30% of these going to women.
"The rationale for the bank’s intervention is to support the country’s pursuit of 100 percent access to electricity by 2024,” said Aissa Toure Sarr, African Development Bank’s Country Manager in Rwanda.
"The project will contribute to enhancing the quality of life by facilitating improved education and health provision as well as promoting private sector growth, hence contributing to Rwanda’s social and economic transformation agenda which aims to transition Rwanda from a developing country to a middle-income country by 2035,” Sarr observed.
The bank-financed grid access component of the project will target households in southern Rwanda, where connection rates are below 34 percent. The main cities targeted are Gisagara, Huye, Nyamagabe, Nyanza, Nyaruguru, and Ruhango.
Also, the project will strengthen the network in Nyarugege city, Nyamata, Kigali Hub, and other zones across the country where growing commercial activity has increased electricity demand.
"The bank is pleased to play an important role in actualising Rwanda’s Transmission Reinforcement and Last Mile Connectivity Project, which will not only contribute to addressing the country’s energy poverty, including pursuit of universal access by 2024, but also aligns closely with the bank’s high 5 priorities,” remarked Dr Kevin Kariuki, AfDB Vice President for Power, Energy, Climate & Green Growth.
Moreover, the project exemplifies the transformational impact of effective coordination amongst development partners.
The project aligns with two of the bank’s High-5s (priorities) - "Light Up and Power Africa” and "Improve the Quality of Life for the People of Africa.”
It is a component of the $670 million multi-donor Rwanda Universal Energy Access programme (RUEAP), which is being co-financed by the World Bank Group, OPEC Fund for International Development, Saudi Fund for Development, Agence française de développement, and the European Investment Bank.
According to information from the Ministry of Finance and Economic Planning, RUEAP aims to achieve 100 percent electrification by 2024 as per the National Strategy for Transformation target (2017-2024).
It is to note that as of March 2022, the African Development Bank has financed over $1.4 billion worth of projects in Rwanda, of which $498 million has been directed towards energy project projects.
As of March 2022, the cumulative connectivity rate in Rwanda was 69.80 percent of Rwandan households including 49.23 percent connected to the national grid and 20.57 percent accessing through off-grid systems (mainly solar), according to data from the Rwanda Energy Group (REG).