The government has leased 22 micro-power projects to private investors, a move aimed boosting the country’s power generation capacity.
The plants were leased to seven private power developers for 25 years, according to the Power Purchase and Concession Agreements signed between the companies and Ministry of Infrastructure, Rwanda Development Board and the Rwanda Energy Group on Thursday.
Speaking at the signing of the deals, James Musoni, the Minister for Infrastructure, said 15 of the plants will be new, while seven are already operational only need to be upgraded to boost their capacities and efficiency.
The plants, located in Northern and Western provinces, include Agatobwe, Nyamyotsi I and II, Kimbili Rukarara V, Rugezi, Mutobo, Base I and II, and Ngororero.
The power developers include a consortium of Karera and Tiger Huert Heindi Energicotel Ltd and Adre Hydropower, Prime Energy and Kochendorefer and FEE, Rwanda energy UK Ltd and Africa Energy Services, Rwanda Mountain Tea, Rural Energy Promotion Ltd, as well as Ngali Energy, and the Led Energy Solutions and Green Energy joint venture.
Musoni said after the micro-power plants will be developed or upgraded and managed by private investors over the period, and then revert to government after the expiry of 25-year concessions.
“We believe that with private sector involvement, these power plants will be upgraded to produce more power than they are generating today. This will increase efficiency, leading to clear management of national energy resources in the country,” Musoni told The New Times. He added that the ministry was committed toward harnessing the country’s hydro-electricity resources in a sustainable manner.
Musoni said the takeover of the power plants by the private sector is in line with Rwanda’s development agenda, where energy production is given priority.
He added that the move promotes private-public partnerships in the sector, which could help attract more investors into the energy industry.
What the deal means for the country
According to energy experts at the ministry, the 22 micro-hydro power plants will add about 24.6MW to the national grid.
Rwanda’s current installed power generation capacity is 161.2MW, with another 70MW expected to be connected onto the grid by end of the year. The government targets to generate 563MW by 2017.
Odette Mbabazi, the managing director, Energy Utility Development Corporation Limited, recently told this publication that the additional power (70MW) will help reduce load shedding, especially during dry spells of the year.
Today, hydro electricity generation capacity accounts for 97.37MW, thermal power is 51.7MW, methane 3.6MW, while solar energy is at 8.75MW.
Projects like Kivuwatt (25MW) Gishoma Peat Plant (15MW) and Giggawatt solar power plant (8.5MW) are expected to be connected on to the national grid this year, according to ministry officials.
Other efforts to increase power supply include importing 30MW from Kenya (this year) and another 400MW from Ethiopia by 2018.