Rwanda secures Rwf110bn to expand electricity rollout

Minister of Finance Uzziel Ndagijimana and World Bank Group the Country Manager Yasser El- Gammal chats after signing US$125million Development Policy Operation credit agreement to support a fiscally sustainable expansion of electricity services in Rwanda. Nadege Imbabazi.

In a bid to achieve its energy targets of extending electricity to all Rwandan households in the next six years, the government has continued its pace to mobilise resources to achieve this.

Yesterday, the government through the Ministry of Finance and Economic Planning signed a $125 million (about Rwf110.9 billion) loan agreement with the World Bank which will enable the government to expand electricity services.

“This programme will help the government of Rwanda accelerate the implementation of its plan to achieve 100 per cent access to electricity in Rwanda by 2024,” Uzziel Ndagijimana, the Finance and Economic Planning Minister said at the signing ceremony in Kigali.

The government wants to achieve 100 per cent access to electricity by 2024 from the current 45 per cent through the National Strategy for Transformation.

The agreement, the minister said, will specifically deliver an additional 154,000 connections countrywide.

“The programme will also address key challenges in the energy sector such as lowering the cost of electricity, increasing energy efficiency and boosting revenues from electricity sales delivery,” he added.

The deal is the second programmatic Energy Sector Development Policy (DPO) financing agreement.

It is part of the three-year DPO series worth $325 million (approximately 271 billion) which is a continuation of the World Bank’s current financing in the energy sector.

 The first was signed last year worth $125 million.

Unlike the commonly known financing agreements that target specific projects, this goes directly to the general national budget in the resource envelope earmarked for the energy sector.

The World Bank Country Manager, Yasser El- Gammal, said Rwanda has managed to triple its generation capacity since 2008, but that this will be meaningful if all people get access.

“Rwanda has tripled its generation capacity in the energy sector since 2008. This kind of achievement is remarkable. But all these things don’t mean much until [all] people have access to electricity,” he noted.

Currently, Rwanda generates 220 megawatts of installed capacity. This is a significant increase from 76MW in 2010.

El-Gammal highlighted that the credit agreement was approved by the Bank’s board a day before it was officially signed.

“This doesn’t just happen anywhere. Elsewhere, it takes about two or even three weeks to sign it after being approved. This is a demonstration of seriousness that the government has,” he said.

The credit extended to Rwanda has a repayment period of 38 years with grace period of six years and an interest charge of 0.5 per cent.

The government believes these are fair conditions that will not burden the country.

Meanwhile, this loan is subject to cabinet approval before being disbursed.

editorial@newtimes.co.rw

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