The governments of Rwanda and Japan yesterday signed a financing agreement, worth $18.4 million (about Rwf14 billion), aimed at boosting electricity distribution networks in the City of Kigali.
The funds will specifically be injected in the construction of Ndera substation and the Murindi and Kabuga power-switching stations, both in Gasabo District, according to Claver Gatete, the minister for finance and economic planning.
The fund will go toward procurement and installation of equipment at the two facilities, which will help stabilise energy distribution within the capital and surrounding areas.
“The support is part of the second phase aimed at rehabilitating and re-constructing the old substations as well as restore and expand the distribution networks in Jabana, Gikondo, Rwinkwavu, Huye and Musha,” Gatete said.
He added that upgrading the distribution networks is crucial for faster economic growth and is well aligned to the country’s second Economic Development and Poverty Reduction Strategy (EDPRS II).
According to EDPRS II blueprint, government targets to increase power generation capacity to at least 563 megawatts by 2018, from the current 185 megawatts.
Access to electricity is equally expected to have reached more than 70 per cent of total population by 2018, according to the strategy.
Although generation capacity has been increasing, with the rapid GDP growth of annual average rate of 8 per cent in recent years, the demand for power is also growing at more than 10 per cent each year.
For instance, the amount of power consumed in Kigali accounts for about 64 per cent of the national consumption, which calls for upgrading the current power distribution network.
Tomio Sakamoto, the in-charge of development affairs at the of the Embassy of Japan in Kigali, said upgrading power distribution networks will boost and stimulate sustainable economic activities resulting into reduced cost of doing business and improved standards of living.
Sakamoto said the Rwf14-billion project will be implemented by both the Energy Utility Corporation Limited and the Japan International Cooperation Agency.
The Government of Japan provides an annual average amount of $20 million to Rwanda through various assistance programmes.
The government allocated Rwf135 billion this financial year toward efforts to boost power generation and distribution across the country.
Reducing power losses
According to Jean-Bosco Mugiraneza, the chief executive of Rwanda Energy Group (REG), the support is a great milestone toward reducing power shortages and losses.
REG is currently working round the clock to bring down power losses from 23 per cent to at least less than 15 per cent, he said.
The country’s hydro electricity generation capacity stands at 97.37 megawatts, thermal power 51.7 megawatts, methane 3.6 megawatts, while 8.75 megawatts is produced from solar energy.
Other efforts to increase power supply include importing 30 megawatts from Kenya – expected by the end of April – and another 400 megawatts from Ethiopia by 2018.