At least 145,000 rural households in Rwanda will have access to electricity after the government received $840,000 to improve off-grid access rate from 5% to 22% by 2018.
The grant was awarded to the Government of Rwanda at the end of 2015 by the African Development Bank-hosted Sustainable Energy Fund for Africa (SEFA) to promote green mini-grids (GMGs) and create a platform for private investments in this sub-sector.
Green mini-grids are village or district-level electrical distribution networks that serve the needs of communities too distant to be economically connected to the grid in the near to medium term, but densely populated enough to offer economies of scale in power delivery compared with individual home systems. The International Energy Agency has estimated that 40% of investment required to achieve universal electricity access by 2030 can most economically be achieved through mini-grids.
Speaking after the approval, Kurt Lonsway, African Development Bank's (AfDB) Manager for Environment and Climate Change said that “given the low 5% rural access rate to electricity in Rwanda, combined with gradual population growth and significant untapped renewable energy potential, GMGs can provide robust and cost-effective energy access solutions.”
The project which is developed by the Ministry of Infrastructure, will be implemented by the Rwanda Energy Group, the government utility. The project will also undertake mini-grids feasibility studies for up to 20 small hydro sites and a corresponding roll-out plan targeting local private developers.
“It is complementary to ongoing AfDB interventions in Rwanda's energy sector including: The Scaling Up Energy Access Project, the regional electricity grid interconnection and power generation projects, the Climate Investment Funds' Scaling-Up Renewable Energy Program in Low Income Countries (SREP), and the Sustainable Energy for All (SE4All) Action Agenda which includes assessments of feasibility and potential to provide investment incentives,” a statement by AfDB read.
Negatu Makkonen, AfDB Resident Representative in Rwanda noted that once completed, “the project will promote private sector participation in the nascent and promising green mini-grids market in the country.”
This project is one SEFA’s Country Programs of enabling environment support for GMGs that will address sector planning, regulatory and policy interventions and market development activities in up to six countries in 2016-2017. In addition, in June 2015 SEFA approved a grant of US $1 million to the SE4ALL Africa Hub to promote the scaling-up of GMGs in Africa through the regional GMG Market Development Program.
Moreover, SEFA’s support to green mini-grids corresponds with AfDB’s commitment to support energy infrastructure, climate change mitigation and adaptation. The project is part of the AfDB’s “New Deal on Energy for Africa”, and is aligned with Africa Renewable Energy Initiative (AREI)’s objectives of increasing renewable energy penetration.