Rwanda has signed a US$262.8 million loan agreement with the African Development Bank (AfDB) to support plans to improve transmission and distribution networkss under the Scaling Up Electricity Access Programme Phase II (SEAP II).
The funding comprises a US$189.9 million loan from the AfDB and a US$72.9 million loan from the African Development Fund, an associate of the AfDB. It will be extended to Energy Development Corporation Limited and Energy Utility Corporation Limited, both subsidiaries of Rwanda Energy Group Limited, the government-owned utility which manages and operates the country’s energy infrastructure.
“This project will be a key milestone in improving reliability of electricity supply, which will positively impact our economic growth, promote our private-sector-led job creating growth, particularly for the youth, and reduce poverty,” Rwandan Finance Minister Uzziel Ndagijimana said after signing the loan agreement last week.
The AfDB will provide the loan to fund construction of 795 kms of medium voltage and 7,317 kms of low voltage power transmission lines and associated substations across Rwanda as part of the SEAP-II programme.
The second phase programme, according to the bank, will improve reliability of electricity supply, increase on-grid and off-grid access to renewable energy for households and commercial usage, and strengthen institutional capacity to deliver on the ambitious government energy program
It is expected to enable the Rwanda government to add over 193,000 new on-grid and over 124,000 off-grid connections.
The AfDB agreed to provide an additional loan to the Rwandan government after the successful implementation of the SEAP-I project, which was approved by the bank in 2013 with a combined US$45.6 million loan and grant.
The loans represent 8.2% of the Rwandan government’s estimated US$3.27 billion budget for its Energy Sector Strategy Plan, which aims to provide electricity access to all Rwandan households by 2024, using a combination of on-grid and off-grid solutions like solar home systems.
In the last seven years, the overall access to electricity in the central African state has more than doubled from 18% to 44% by the end of June 2018.
Rwanda currently has 210 MW of installed capacity, comprising 110 MW of hydro and 100 MW of thermal capacity.