Manufacturers advised on cheaper energy

Industrialists have been urged to consider working at night and take advantage of cheaper energy tariffs while the government moves to boost electricity production and eventually reduce the cost per unit.
Workers at a factory in Kigali. Members of the private sector have expressed concerns over power outages. The New Times/John Mbanda
Workers at a factory in Kigali. Members of the private sector have expressed concerns over power outages. The New Times/John Mbanda

Industrialists have been urged to consider working at night and take advantage of cheaper energy tariffs while the government moves to boost electricity production and eventually reduce the cost per unit.

The call was made by the Permanent Secretary Ministry of Infrastructure, Christian Rwakunda, who explained that current power fluctuations were due to on-going short-term maintenance and modernisation of equipment. 

The PS was responding to some members of the private sector who complained about power outages and high tariffs during a two-day conference on the role of law reforms in doing business that took place at Parliament building last week.

“As means to increase energy are being sought, the government and the private sector must continue sensitizing industries to work at night when they can get more but less costly energy,” Gerald Mukubu, Director of Advocacy in Private Sector Federation (PSF) said as he read part of the recommendations from the conference on Friday.

Rwankunda said that measures are being put in place to boost energy generation and reduce the cost. 

“You also very well know about the reforms we have undertaken in the energy sector, particularly in EWSA – which is going to be 100 per cent government-owned but under a corporate arrangement,” Rwakunda said.

Currently, 1Kw of electricity in Rwanda costs Rwf22 cents, Rwf21.1 cents in Tanzania, Rwf21 cents in Uganda and Rwf20 cents in Kenya. However, without government subsidy, the cost in Rwanda would be as high as Rwf32 cents per Kw, the PS said. 

“There is now going to be a cost reflective tariff. Clearly, to the private sector or investors operating in Rwanda, energy is not so high in terms of cost but what we must focus on is having reliable energy,” Rwakunda added. 

Mid last year, new power tariffs were introduced so that factories operating at night benefit from lower rates. The new tariff structure that became effective May 1, allow industries operating between 11p.m and 7a.m to pay Rwf 80 /KWh from the previous 105/KWh. The move was meant to encourage factories to work overnight. At the time, EWSA’s statistics indicated that factories use 30 per cent of Rwanda’s total electricity consumption. The EWSA had increased tariffs to 140kWh for those operating during peak hours.

During the Thursday session, Senate Vice President, Bernard Makuza, stressed that a mindset change will be crucial if this challenge is to be overcome by industrialists. He said that despite the ambitious plan to boost energy production current capacity of 67.85MW is low and calls for efficient use of energy by the industrialists including operating at night.

“This is an issue about mindset change. We need to cooperate to make Rwandans, and all of us, understand that working from 21:00 hrs in the evening till 06:00 hrs in the morning, is the way to go,” Makuza said.

Beata Mukangabo, a RURA official, said that many manufacturers had not taken advantage of the lower power tariffs at night.

Immaculée Kayitesi, the owner and manager of Zirakamwa Neza Dairy, in Nyanza district, told The New Times that night operations appear to be a challenge largely because it was a new policy that people were not used to.

“It might take some time and requires mobilisation because some employers fear that employees might demand higher wages for working at night,” she added.

 

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