Rwanda Utilities Regulatory Authority is reviewing the country’s electricity tariffs downwards to make it more affordable for the consumers as the demand increases.

Electricity tariffs in Rwanda are among the highest in the East African region, a factor that has limited investment in manufacturing.

According to Rura, the electricity tariffs are being reviewed to encourage private investments while protecting consumer interests in terms of affordability, availability, accessibility and quality of services.

Currently, the consumer pays Rwf143 ($22 cents) per kilowatt while for industrialists the tariff is Rwf123 ($19 cents) which the private sector wants review.

Although it is expected that the tariffs will be reviewed downwards, it is not yet established what the actual price will be.

The move is also expected to provide a detailed review of the existing financial model of electricity generation, transmission and distribution, on the best approach for electricity tariff regulation and to advise the regulator to undertake regular tariff reviews in future.

“Power costs in Rwanda are very high, compared with other countries in the region, and this is working against the development of major sectors,” said Hannington Namara, the chief executive officer of Rwanda Private Sector Federation.

Due to the high power tariffs among other factors, only Bakhresh (Azam) as the major foreign investor in the designated special economic zone. But there are plans to shift a number of local industries from Gikondo industrial area.

Mr Namara added that Rwanda’s energy sector requires at least 1000 megawatts by 2017 in order to deal with unreliability of supply and have the industrial sector operating in full capacity.

READ: Rwanda MPs question feasibility of govt’s 1,000MW power target

Rwanda currently produces between 85 and 100 MW of electricity with a customer base of 175,000. This represents a 10 per cent connectivity rate to the grid.

According to the Energy, Water and Sanitation Authority (EWSA), the review of the tariffs is a regular practice carried out to meet the energy needs of the consumers.

“The review of electricity tariffs and any other essentials like water should be pro-poor to improve people’s lives and compete well in the region,” said Ntare Karitanyi, the Director-General of EWSA.

The industrial sector is projected to grow at an annual rate of 14 per cent between now and 2020, which is a key driver for economic growth and it should have enough energy to realise this target.

By 2017, Rwanda intends to have 50 per cent connectivity, electricity production of 1,000 MW.

The twelve- fold increase in electricity production will be pegged on an increase in installed capacity of methane gas, geothermal, energy, regional hydro and peat.

Government estimates the peat potential to be equivalent to 1,200MW, about 77 per cent of which is in the southern Province. Rwanda plans to develop its peat resources to generate about 200MW of power by 2017.

Turkey’s Hakim Mining and Generation industry and Trade company, has invested over $284 million to develop and manage a peat extraction and electricity generating plant.

The peat master plan indicates that Rwanda’s peat capacity stands at 155 million tonnes of dry peat spread over 50,000 hectares.

Besides peat energy, Rwanda has designed a seven-year electricity plan where it projects to develop hydropower plants to deliver about 232MW, develop geothermal power plants with capacity of 310 MW, and generate power from methane gas to deliver 300MW as well as strengthen and expand the transmission lines by an additional 2,100km.

A total of 1,700,000 customers will be connected to the electricity grid (70 per cent of access rate).

With more supply of electricity to the national grid, producers hope the tariffs will come down and therefore help them to grow their businesses.

“We hope it brings down the costs,” said Marion Rukundo, a coffee processor.  

Rwanda presently has about 44.8MW of mini and small hydropower plants in operation and imports 15.5MW from regional projects such as Rusizi I and II.

Currently, there is a 10.9MW of mini and small hydropower plants under construction and will be in operation before the end of 2013.

Nyabarongo (I) which is a 28MW plant also under construction is expected to be complete by 2013/2014.

Rwanda also has capacity for solid waste and Kigali city alone can produce around 450 tonnes per day of solid waste of which between 300 and 350 tonnes/day is centrally collected.

The fraction of organic waste comes from households, restaurants, hotels and markets while other types of solid waste available in the country include agricultural waste, livestock waste and water hyacinth.

It is estimated that 100 tonnes per day of raw municipal solid can produce 1MW, using traditional thermal technologies.

The population in Kigali is expected to reach about 1.5 million by 2020. It is believed that the waste collected will reach about 1,000 tonnes per day.