Power woes that local manufacturers have been experiencing could soon end, thanks to a power supply agreement that will see Rwanda import 30MW of electricity from Kenya.
The 5-year contract that was signed with Kenya’s electricity distributor, Kenya Power on Tuesday in Nairobi will enhance the country’s push to supply power to customers to drive Rwanda’s development agenda, according to Robert Nyamvumba, the Energy Development Company Limited managing director. Nyamvumba said the deal answers the question of “affordability and flexibility” in the country’s energy industry.
“We are buying each kilowatt at US 14 cents (Rwf50), which will be reviewed every two years.
With reliable and affordable power, the country will be able to attract more investors and, ultimately, fast-track economic growth,” Nyamvumba, told The New Times in a telephone interview from Nairobi yesterday.
According to the current time-of-use tariff package, VAT exclusive, industrialists pay Rwf96 per unit of electricity during the day and Rwf126 per unit at night, domestic users part with between Rwf134 and Rwf158 per unit of electricity, depending on the time.
Nyamvumba pointed out that the agreement is part of a regional initiative to improve the power grid along the Northern Corridor.
Rwanda’s current electricity generation capacity stands at 155MW and is expected to rise to 563MW by 2017.
According to the agreement, transmission grids in Kenya and Uganda will be improved to facilitate the initial power sale of 30MW by Kenya to Rwanda to be wheeled through Uganda transmission infrastructure by July 2015 using the already interconnected transmission grid.
The electricity firm also signed another agreement with Uganda Electricity Transmission Company Limited and Rwanda Energy Group to help facilitate the trade after the completion of negotiations.
Rwanda also plans to import 400MW of power from Ethiopia when enabling electricity infrastructure has been put in place.
Speaking during the signing ceremony of the two agreements, Kenya Power chief executive officer, Ben Chumo, said the agreements were a culmination of a memorandum of understanding that Kenya, Uganda, and Rwanda entered into in 2013.
“The agreements entail the promotion and sustainable development of power generation and interconnection of transmission and distribution systems and power projects within the three states,” Chumo said.
The three East African countries agreed to share cheaper generation capacity as it becomes available.
Commenting on the initiative, Anne Rwigara, the secretary general Rwanda Manufacturers Association, said industrialists are optimistic about the development, noting that access to more and affordable power translates into low cost of production.
Antoine Manzi, the director of advocacy at the Private Sector Federation, echoed a similar sentiment, saying the initiative could aid the business community to deliver on their economic objectives at a minimum cost.
Increasing power generation capacity to ensure that citizens access reliable and affordable energy to boost economic development is one of the objectives of the second Economic Development and Poverty Reduction Strategy (EDPRS II). Government looks to increase power generation capacity by 60 per cent to 563MW from the current 155MW by 2017.
The country has added over 40MW of power on the grid this year; 28MW from the Nyabarongo I power plant, Giciiye I power plant in Nyabihu District, 4MW, while Rusizi power plant added 4MW and Giggawatt Solar power plant 8.5MW. Gishoma peat plant (15MW) is expected to come on line next year.