Rwanda earmarks $10 million for grid development

KIGALI, RWANDA - Over 18,000 electricity connections will be made in the Gasabo, Kicukiro and Nyarugenge (Kigali city), Nyagatare in Eastern Province and Nyamasheke in Southern Province.

The program is part of government's plans to expand the national power grid and increase access to electricity from 7 percent to at least 16 percent by 2012.

The project to light up the areas will be funded by a $10 million (US) loan from Arab Bank for Economic Development in Africa (BADEA).

The loan will be paid in 30 years including a grace period of 10 years and at an annual interest rate of 1 percent.

Speaking at the signing, the minister of finance and economic planning, James Musoni hailed the cooperation between Pan-Arab bank and Rwanda and noted that the loan will boost the national electricity rollout program where government and Rwanda Electricity Corporation have injected $40 million. The financial institution's Director-General Abdul Aziz Khalif signed on behalf of his bank.

The loan increases BADEA's commitment in Rwanda to $84.46 million (US). The bank currently finances 22 development projects in Rwanda.

The government plan under the Economic Development and Poverty Reduction Strategy (EDPRS) to increase connection from 137,000 to 350,000 connections by 2012 is already on course and 21,000 connections have already been added, for this year. The plan is to add 37,000 connections every year, beginning with 2009 with a target of 350,000 connections set for 2012.

The World Bank has released 20m dollars while the Dutch government contributed 10m dollars to the power roll out program.

Rwanda Energy Corporation (RECO) will coordinate the national rollout program and handle the procurement work of all the required materials to fast track the exercise.

Government is also planning to increase the national capacity from 69.5MW-including Hydro, Thermal and Solar, to 165MW by 2012.

The Energy Rollout Action Plan has since obtained funding from the World Bank to the tune of $70 million (US) to cater for 100,000 connections and $30 million (US) Dutch funding will add 50,000.