Rwanda moves to reform energy sector, reduce on blackouts

 

Rwanda has embarked on reforming its energy sector with the aim of cutting power bills and securing reliable supply of electricity. TEA Graphic 

By BERNA NAMATA The EastAfrican

In Summary

• Reforms include liberalising the industry to allow the private sector to participate actively in electric power production, transmission, distribution and trading both within and outside the country.
• The government has also simplified tendering procedures to allow local investors to bid for lucrative contracts, as opposed to before, when the state specifically targeted foreign companies.

 

• Power imports to increase supply, support industries in Rwanda

Rwanda has embarked on reforming its energy sector with the aim of cutting power bills and securing reliable supply of electricity.

The reforms include liberalising the industry to allow the private sector to participate actively in electric power production, transmission, distribution and trading both within and outside the country.

This will see the formation of an independent agency, the Energy Holding Company, which will manage energy development and electricity distribution in the country.

Currently, the government is the leading investor in the sector with the state-owned Energy Water and Sanitation Authority (EWSA) controlling generation and distribution of electricity.

READ: Call to privatise water, energy in Rwanda

Economists say that allowing in private players and expanding energy sources outside hydropower will see more households linked up to the national grid and ease power costs for households and businesses.

Rwanda is trying to bridge its widening energy deficit, which is putting pressure on its economy. Rwanda’s installed capacity is around 110MW (local) and it imports 14.5MW.

The cost of energy in the landlocked country has risen to $0.22 per kilowatt-hour (KWh), compared with $0.08 to $0.10 in the rest of the region, according to World Bank figures. While the World Bank says connectivity to the national grid in East Africa remains relatively low, at 15 per cent of households, Rwanda is among the best performers in the region.

According to the World Bank, Tanzania has the highest number of households without electricity, at 7.2 million. This is followed by Kenya at 6.2 million, Uganda at 5.5 million, Rwanda at 1.7 million and Burundi at 1.4 million.

But the bank further says Rwanda experiences the highest number of power outages, with an average of 14 blackouts per month, followed by Burundi and Tanzania, both with 12. Ugandans expect 11 blackouts a month. Kenya’s power grid is more reliable, but still experiences an average of seven blackouts a month.

READ: EWSA struggles to supply electricity

Although the new company to be set up in Rwanda will still be owned by the government, the private sector will be contracted to carry out some of its tasks to increase efficiency.

The government has also simplified tendering procedures to allow local investors to bid for lucrative contracts, as opposed to before, when the state specifically targeted foreign companies.

“Replacing the existing government agency with specialised companies will allow management to focus on the sectors and empower them to make the complex decisions needed to efficiently provide energy and water services,” said Silas Lwakabamba, Rwanda’s Minister for Infrastructure.

Prof Lwakabamba said the reforms in Rwanda will allow the government make the investments in new electricity infrastructure that the country needs.