The price of electricity in Rwanda is set to go down when the interconnection of national electric grids for the Nile Basin Initiative (NBI) countries is complete.
Electricity tariffs in Rwanda for both domestic and industrial users are among the highest in the region, a factor that has limited investment in sectors such as industry and manufacturing.
The cost of energy in the country has risen to $0.22 (Rwf151.3) per kilowatt-hour, compared with $0.08 (Rwf55.0) to $0.10 (Rwf68.7) in the rest of the region, according to World Bank figures.
The interconnection of grids will see all countries channel their generated electricity to one main grid from where countries with less energy will purchase power for a much cheaper price from their counterparts. The countries that will benefit from the interconnection of grids are Rwanda, Uganda, Burundi, Democratic Republic of Congo and Kenya.
Although there is no fixed timeline for the completion of the project, many of the countries want to have channelled their energy to the main grid before the end of next year with the exception of Burundi, which is likely to join in 2017.
The Nile Basin countries like most African nations find their power generation plants not evenly distributed, which leads to uneven distribution of electricity and with one regional grid, the problem is addressed and countries get balanced supply of power.
Rwanda is set to benefit from the initiative given its low level of energy generation and the high cost of electricity.
“With the interconnection of regional grids, there will be secure and sustainable supply of energy, which will reduce its cost and attract more investors since operation costs will go down,” said Claver Gakwavu, co-ordinator of the National Project Implementation Unit for Rwanda.
Rwanda currently produces approximately 110MW of electricity, which is insufficient to meet the demands of consumers.
By 2017, Rwanda intends to have 50 per cent connectivity and electricity production of 560MW. The 12-fold increase in electricity production will be attributed to an increase in installed capacity of methane gas, geothermal, energy, regional hydro and peat.
In the short-term Rwanda is bridging the energy deficit by importing electricity from Uganda, and the DR Congo although it also exports some to DRC and Uganda. Rwanda imports 3.5MW from DR Congo and 1.5MW from Uganda.
The interconnection of regional grids is coming at a time when Rwanda Utilities Regulatory Authority is reviewing energy tariffs to encourage private investments while protecting consumer interests in respect to affordability, availability, accessibility and quality of services.
“Countries will start getting energy from cheaper options and this will pull the tariffs down which will be good for the economy,” said Grania Rosette Rubomboras, Regional Project Manager for the Nile Basin Initiative.