World Bank Loans Rwanda $95m To Reduce Power Cuts

A woman in rural Rwanda tries out a new solar power kit – one of the several power sources which government is encouraging

Rwanda on Tuesday got new financing from the World Bank to connect more than 72,000 new homes to national grid – as well as tackle biting power cuts that began last week when lines were damaged.

The new $95m approved by the bank’s board will go to the Energy Utility Corporation Limited (EUCL).

The financing will enable the agency connect more homes to network, rehabilitate the dilapidated Kigali’s 15KV distribution network to meet an increased demand.

The loan will also reduce the frequency of electricity supply interruptions. Since the weekend, large parts of the country have been facing power cuts as technicians struggle to restore a damaged line which brings power from dams in western Rwanda.

Experts say the country’s distribution network needs complete overhaul to deal with massive demand from power lines set up when the country’s economy was less than a billion dollars in size.

Today, factories are propping up every other week – putting the economy at up to $9billion.

“Not only will increased access to reliable electricity supply lower costs and improve the profitability of business enterprises,” said Thomas O’Brien, World Bank Country Program Coordinator and Acting Country Manager for Rwanda. “…but it is also key to enabling the set-up of new private sector-led enterprises, which can drive economic growth and poverty reduction.”

Rwanda wants to achieve 70% of the electricity access rate from the current 24% and aims at having an installed capacity of 563 Megawatt in 2018, from the current installed capacity of 161 Megawatt.

With latest World Bank financing, EUCL will set up new and more efficient service delivery so consumers do not have to wait for hours or even days to have them connected or reconnected to network.

“While increased access to electricity services is important, efficiency, transparency and accountability in the operations are all equally critical,” said Paul Baringanire, World Bank Senior Energy Specialist.

“As such, the project will also bolster EUCL’s operating efficiency, reduce the duration of network outages by accelerating response time, facilitate periodic updates to consumers about the state of the network, and ultimately empower the consumers to demand better services as necessary.”