Private investments ‘key to meeting national electrification targets’

Officials at the meeting. Eddie Nsabimana.

Rwanda’s targets of universal electricity access by 2024, as highlighted in the government’s National Strategy Transformation (NST1) can only be achieved if investments in the energy sector by the Private sector are stepped up, experts say.

However, low investments in the energy sector could pose a threat to the target.

So far, Rwanda’s electricity access currently stands at 51 per cent from 9 per cent in 2010, of which 38 per cent is on-grid supplied by the government, through Rwanda Energy Group and 13 per cent off-grid power contributed by private investors in the past four years.

To ensure universal access to electricity by 2024, the government aims at supplying electricity to 52 per cent of the total population, using its on-grid power stations, while private off-grid investments are expected to contribute the remaining 48 per cent mainly through solar or mini-grid.

But the statistics show that the private sector’s commitment to invest in energy sector is still low considering that the government expects private investors to contribute 48 per cent of the total power electrification by 2024.

Sanday Kabarebe, the Chief Executive of Energy Private Developers (EPD), the umbrella body of private energy firms, said that the major challenge private companies encounter is the mindset among rural communities where most think they ought to have access to electricity for free..

 “Given that the private sector’s energy investment mainly targets the rural households whose big number of families seem to be dependent on government support, it is still a challenge for some communities to afford to access the off-grid power and that is affecting private investors in the energy sector,” Kabarebe said.

“There is need not only in increasing investment in the energy sector but awareness campaigns should also be made among people changing who have that  mindset that they should have free access to electricity, which is totally false. If they change their mindset, then the investment will hopefully go up in the sector,” he said.

This year, the private sector targets to increase off-grid power generation among the communities up by 7 per cent compared to last year’s 2 per cent, with off-grid power supply mainly targeting rural areas.

To achieve it, discussions between the private sector and stakeholders like USAID, World Bank, Power Africa as well as the government are ongoing to see how affordable electricity can be made for the communities can access it at lower costs.

There are 52 private companies currently investing in the energy sector but some have started to slowly pull themselves out of the market.

“A number of companies are coming to invest in the energy sector but others are slowing down in the move. We are looking at how they can be facilitated to continue their investments in the sector to meet the expectations by the government,” Kabarebe revealed.

For instance a review of import duty has been made to ease importation of energy products. However, more has to be done.

“We are working on other options such as reviewing the best way to deploy the renewable energy fund available in BRD. We are looking at better ways of deploying more funds through subsidies in order to stimulate the market through increased demand” Kabarebe said

Robert Nyamvumba, the Energy Division Manager at the Ministry of Infrastructure hailed the current public-private partnerships made so far in the energy sector but appeals more efforts are needed to achieve the 2024 universal access target.

“The government is always looking forward to increased investment by private sector in energy because it can’t achieve the target of ensuring universal access to electricity alone.  We are working hand-in-hand with investors and set policies that facilitate them invest in the sector in a conducive environment,” he said.

Need to harmonise renewable energy policy

 Government representatives, private energy investors and development partners from across the region who gathered in Kigali for a  two-day EAC Public-Private Sector Renewable Energy Policy Dialogue called for a harmonised EAC policy framework on renewable energy and energy efficiency policies and legislation.

Michael Kiza, the Programme Management Expert at East African Centre of Excellence for Renewable Energy and Efficiency (EACREEE), said there is need to harmonise Renewable Energy Policy to open doors for investors to invest in any EAC member state.

“Access to electricity in the region is still very low and this is really affecting the welfare of citizens. If the laws and the regulations in Rwanda are different from those elsewhere in the region, then the common market cannot work properly, the same to customs unions. But if we have a harmonized policy, then an investor can have an option to invest in another East African country,” he said.

editor@newtimesrwanda.com

 

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