Rwanda is undergoing power insufficiency as their hydroelectric plants: Ntaruka power station (11.5 MW), Mukungwa power station (12 MW), Mukungwa II power station (2.5 MW), Nyabarongo (28 MW), Rukarara (9.5 MW) with a total of 63.5 MW, not able to fulfill the increasing energy demands. With more investors starting up operations in the country due to the Rwanda’s fast business processing and facilitation of a smooth business environment. Some of the important facilities or essential places such as airports, main hospitals are getting 24 hour electricity supply, while other places of the nation suffer from long power cuts daily, especially during summer time when the water volume reduces.
In recent years the supplies of Ntaruka and Mukungwa plants have reduced their power generation quantity due to water shortage in Lake Burera. The size of the lake is narrowing due to harsh weather conditions. One of the other reasons for drop in water levels is the streams which supply water to the lake are in a marshy valley where locals cultivate their crops, although the government is pushing, there is still a need to have additional sources of power to help in case the hydro power plants have a shortage of water. Today, Lake Burera has only got enough water to operate one of the Ntaruka turbines. Further, this situation has caused drop in water levels of Lake Ruhondo which has affected the Mukungwa plant. Therefore both the hydroelectric plants are just working at half of their potential. Farmers in the Northern Province were stopped from cultivating crops in the marshes of the tributaries of Lake Burera to reconstitute it and increase the water volume to the higher levels again.
The Government of Rwanda (GoR) is quite aware of this situation and seeks for long-term solutions. It is in this perspective that the GoR has inked an energy agreement with Kenya in September 2015. The power purchase agreement includes three months where Kenya will be selling 30 MW of electricity to Rwanda in order to cater its growing energy demands. This deal is going to benefit the people of both the nations in the long-term. As per the contract, the power will be supplied by a new high voltage line connecting the two nations via Uganda. Further, the deal has come as a boom to businesses in the region which often protested about costly and unreliable power. Uganda and Kenya are already linked by older cables, this project will add new sections to the existing transmission route. Further, this is a five year contract in which Rwanda’s power generation capacity will reach 563 MW by 2017.
A 200 KV electricity line will be constructed between Kenya to Rwanda by help of electrical engineers from both sides of the countries. Rwanda is expected to pay Kenya 12 US cents per kilowatt hour for the electricity and Uganda will charge 2.08 US cents as wheeling charges. Kenya is today producing more than 2,100 MW which is more than its domestic requirements. Therefore surplus power is being exported to its neighboring countries and more energy deals are expected to be signed in near future.
In order to go ahead with the project, GoR has received $50 million loan from the African Development Bank (AfDB) and Japan International Cooperation Agency (JICA) for financing the project. People living in rural areas of Rwanda are going to benefit the most. Manufactures, traders and entrepreneurs who have been suffering loss in revenues due to power outages will also benefit from this project.
Benefits of this agreement to Rwanda
Rwanda is going be a key country in attracting investors. Investment will surely help in development of better facilities in every sector. This pact will assist in meeting the growing demand for electricity especially in the rural areas. Further, power supply from Kenya will also be used as a backup, once Rwanda becomes self-reliant, through expansion of renewable energy, and is able to meet the demand of energy on its own. Moreover, GDP and the economy of the country are expected to improve a great deal soon.
Benefits to Kenya from this pact
According to the reports Kenya will get a large amount of foreign exchange which will help in improving public facilities at schools, colleges, hospitals, airports and other important sectors. After this pact many other African nations are approaching Kenya for importing power. This deal has opened new avenues for Kenya to make millions in the near future. Further, there are almost 252 power projects, mostly from renewable energy, in the pipeline worth $86 billion which will bring substantial foreign exchange.
Going ahead with the project will certainly help both the African countries in progressing forward, and Rwanda is looking to establish a long-term partnership with Ethiopia to import 400 MW.