Are Rwanda Energy Groups (REG) 2024 targets feasible? Does the utility company have the resources required to achieve them? What’s the role of the private sector? These are some of the common questions that have emerged in the recent past in regards to REG’s plans for universal electrification by 2024, which in simple terms aims at ensuring every household in the country has electricity.
For answers to the above questions and other aspects concerning the energy sector, The New Times Glory Iribagiza and Ange Iliza caught up with REG’s Chief Executive Officer Ron Weiss for an exclusive interview last week.
How achievable and feasible are the 2024 goals on universal connectivity and what investments are being made towards achieving the goals?
They are not easy, but we can achieve them.
The first target is the generation. We need to achieve 556 MW. We signed all contracts in all projects that are needed and some of the projects are already under implementation, others are still in the design phase, but up to 2024, we are going to implement all the projects that are needed.
We don’t see any challenge to be able to supply all the demand up to 2024. Even some projects we will have to coordinate the right time to see that they are not coming too early, but we don’t see any challenge in a generation.
The same for transmission and distribution, the network itself. We are implementing different projects every year, and I think people can see that we are building lines all over the country.
Also in the area of transmission and distribution, we don’t see any problem to meet the target.
In the area of access, we already have reached over 50 percent mark. We have now in the country around 2.8 million households. We already connected over 1.4 million houses and we don’t see any challenge to connect the rest of the houses by 2024.
We also considered all the new houses that are expected to be built.
According to the forecast in the coming 4.5 years, the country is expecting to build around one million houses. So, in 2024, we are expecting around 3.8 million houses. And the gap of around 2.8 million houses is what we are going to connect.
The main issue is the budget that is needed but we are working with all stakeholders, MININFRA, MINECOFIN, and others to see the different resources that we can bring to the sector.
When we estimated the total cost that is needed by 2024, it is $1.5 Billion for everything; generation, transmission, distribution, and access. The big part of it is access—more than $850m is only for connection.
What is expected from the private sector to achieve the targets? What are the opportunities for the private sector?
The private sector is part of the business. We are working together hand in hand; the private sector is building most of the power stations and supplying us electricity and we are working together to reduce the cost. We don’t want them to lose. We want them to gain money in every project, but it should be reasonable.
We are working with them to ensure that in the new power stations, the feeding tariff to any network will be less than 10 cents, that we will enable us to reduce the cost of power to the end-users.
They should be efficient, as we are trying to be an efficient company, also, each power station, each project should be efficient.
We are working with them also, on different projects; transmission, distribution, and access. We are expecting them to be on time, to be efficient and to work hand in hand with us.
In the end, REG alone will not be able to reach the target. It is the work of everyone; stakeholders, the Government of Rwanda, the development partners, and also the private sector that is supporting us in different projects and activities.
World Bank Doing Business Reports take into account REG’s work in determining the suitability of Rwanda as a business destination, you are currently on position 59 under getting electricity indicator, any new reforms planned?
In the last three years, we are improving our position in doing business, dramatically.
We started around 119th, which was not a good position in the world, we succeeded to come to 68th, and now to 59th.
Being the 59th in the world in electricity is a good position, but it is not enough for us. We want to continue to improve, and the major thing we are going to implement in the future is a system called ‘DMS’, Distribution Management System.
It is a system that is going to improve dramatically, the power supply quality.
I think, even by now the system is stable. We are getting good feedback from our clients that are happy with the supply, people who are coming to Rwanda especially from other African countries, appreciate the fact usually the power is stable, and the number of outages is not too much.
We still have some areas that we need to improve, like Rubavu, we are building some stations there and also other areas that we think are not good enough, and we are working very hard to improve.
DMS is going to reduce the length of the lines and put a lot of elements with smart technology that in a case that we have any problem with the network, for example; a tree that has fallen on our network, or a truck that has hit any of our poles, or any occasion that is causing interruption, only a small portion of the network will be disturbed.
We are going to implement this system in steps, three years, and I think the improvement will be noticed by all clients and citizens in the country.
Clients say that there has been somewhat improvement in service delivery by REG, what has it taken to make the adjustment?
I think one of the major issues that we have succeeded to do, is to create a family feeling in the company, that feeling that people will care about the result.
One example that I can give is that when there is a power cut, and we intervene as quickly as possible to serve the clients and solve it and after we are done, we go door to door to see if the problem has been solved.
If people are happy, it creates a direct relationship between employees and clients. This is what we are trying to do because, at the end, the clients are everything for us. Without them, we are nothing.
Creating a family is done by everyone in the company, and we are trying to show our employees that we care; not just technicians and with that, they will work with their heart.
We will continue to work on this, that everyone will be very happy with our services.
REG has previously been infamous in audit challenges in past years with the Auditor General’s reports previously noting ‘wastage’ of funds. Any ongoing work to curb this?
Auditor general reports and audits are very important tools for management. Because, always, as management, we try to do our best in the company. But what Auditor General succeeds to do is to go to all the small places that may not always succeed to address.
When we get the report, we go through it query by query and seek to understand and learn it to detail, to implement recommendations and to improve.
So, we succeeded to reduce our costs and better implement projects.
We have set aside a full day every week, Thursday, earning and addressing different queries and working on different audit queries. Whether they are coming from Auditor general, but also from our internal auditors.
They are working to improve the management of the company; identify ways to reduce the cost, how to better manage all our financials, and we see that from report to report, the number of queries is has reduced.
On April 1, we are going to start with Auditor General to audit the last two years, in order to bridge the gap that we have, and we are doing our best to present better status of the company.