Can Rwanda’s $450m peat power plant reach full capacity?

The Hakan peat-to-power plant, which saw an investment of $450 million (approx. Rwf650 billion), is currently operating well below its intended capacity. The plant is producing only 23 MW on average – less than 30 per cent of its gross generation capacity of 80 MW, it has emerged. It is located at a peatland near River Akanyaru, in Gisagara District, Southern Province. As Prime Minister Justin Nsengiyumva visited the plant on September 23, Tonci Tadic, the HQ Power Plant Project Manager, said that the facility began production in 2021 with a gross generation capacity of 80 MW, referring to the total electricity generated, including what the plant consumes for its operations. Its net generation capacity – the electricity for supply to the national grid – is 70 MW. ALSO READ: Turkish company to invest $400m in peat power plant The plant was designed to play a key role in Rwanda’s energy mix. However, persistent operational challenges – primarily due to climate change impacts and equipment shortages – have hindered its performance, according to Tadic. It represents almost 20 per cent of Rwanda’s installed energy capacity of 406.4 MW as of 2024. Climate challenges and equipment shortages Tadic pointed to repeated flooding in the peat extraction area, caused by rising water levels in River Akanyaru, as a major disruption to production. He explained that over the past four years, climate change has significantly affected the river’s water levels. Originally, the river level was recorded at 3.5 metres, but it has now risen to 4.9 metres, he said, pointing out that this change was unforeseen. “[As a result] all our peatland is flooded, which is affecting us at least for three months production, three to four months production,” Tadic added. ALSO READ: Govt moves to support major peat firm amid supply shortages To reach its full net capacity of 70 MW, the plant requires a consistent supply of 1.2 million cubic metres of peat—enough to be stockpiled and sustain continuous generation. However, Tadic said that current extraction levels are inadequate due to equipment limitations, logistical challenges, and heavy rains during the March to May season, which further disrupt peat harvesting. Currently, the plant extracts peat from around 300 hectares, but wants such an area to be expanded to about 800 hectares to meet its target. This expansion would also require doubling equipment, according to Tadic, who said that the firm needs a minimum of 20 more tractors, 20 wagons “and all these other machines like super loader, miller, turner, ditcher.” The cost of scaling up Flooding, particularly during the rainy season, continues to negatively impact plant performance. To address these challenges and reach the plant's full 70 MW capacity, Tadic estimates an additional $25 million is needed. These funds would be allocated toward new equipment, expansion of the extraction area, and flood mitigation infrastructure. He believes that with this investment, the plant could reach full capacity within three years. However, he also mentioned ongoing collaboration with the government to find a solution that could shorten this timeline. Government support on the horizon While visiting the facility, Prime Minister Justin Nsengiyumva pledged government support to help raise its energy production. “What we want to do is to partner with the investor to increase energy production,” he said. Tadic confirmed the government's involvement: “The government is taking the issue seriously,” he said, adding that over the past three weeks, the government has brought in other companies interested in helping HQ Power Plant improve its production.

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Can Rwanda’s $450m peat power plant reach full capacity?