Case Study: Rwanda

Enabling framework

The regulatory framework in Rwanda permits and favors private sector involvement, and programs are in place for hybrid public-private as well as private ownership of electricity generation plants.  RURA (the Rwanda Utilities Regulatory Agency) implements the policy developed by MININFRA (Ministry of Infrastructure) as presented in the Electricity Law (June 2011).  MINIFRA has published strategies for the Biomass sub-sector, Biofuels, Petroleum, Electricity and renewable energy.  RURA issues licenses to power producers, distributers, and transmitters. In principle, private companies can undertake all of the above, but in practice power transmission and distribution remain the sole responsibility of EWSA.

 

A standard IPP and PPA approval mechanism is in place as is a Feed in Tariff scheme favoring renewable energy.  Grid extension has proceeded at a pace such that all PPP supported power plants were designed as off-grid, but by the time they were ready to supply power, they were within a few km from the national grid and simply connected to it rather than constructed as mini-grids. 

 

For most renewable energy equipment, equipment import duty exemptions exist.  The RDB (Rwanda Development Board) operates a one-stop center for foreign investors, where the rules are explained and assistance can be obtained. 

 

 

Hybrid public / private model

The micro-hydro plants are privately owned and developed based on private sector-led business proposals detailing a chosen site and capacity.  Funding is a combination of a 50% investment subsidy from the government, private equity and commercial bank debt.  Any cost overuns were to be met by the private sector.  This was in order to test the model as an alternative to the commonly used public funded-and-owned, community operated model.

 

The private sector was therefore wholly responsible for obtaining the necessary licensing, regulatory approval, financing and construction with the government project team providing necessary technical assistance. The power generated is sold to the national utility through a PPA with the plant owners fully responsible for operations and maintenance given that as long as the plant is not operating there is no income to be received.

Micro-hydro plants

Rwanda has a range of 50-500kW micro-hydro plants each consisting of a small dam, reservoir, de-sander, canal and power house.  They use cross-flow turbines with efficiencies in excess of 80% and a head range of 20-60 metres.

 

Those plants connected to the national grid have met technical standards for connection.  Since there is no electrical storage, most plants have a small basin with water that acts as storage tank and provides limited backup in case of low water supply.  The distribution grid is constructed by the the national power company and managed using pre-paid meters.

 

The Murunda micro hydro plant, for example, has a head of 70 metres with a flow of 200 litres/sec that is used to run a turbine connected to 96 kW AC coupled electric generator.  Low voltage transmission lines are used in the distribution of power for both the national utility company and the micro-grid.