Rwanda: AfDB gives Kigali $180 million to support electricity, clean energy projects

• Rwanda will receive two loans amounting to $180 million from the African Development Bank 
• The funds will support a major energy project that will extend electricity access to rural areas and reduce greenhouse gas emissions
• It entails the construction of over 1,000 km of medium voltage and 3,300 km of low voltage lines to boost last-mile access
• The project is expected to connect 77,470 households to the electricity network for the first time and connect 75 schools, eight health centres and 65 administration centres

Rwanda will receive two loans amounting to $180 million from the African Development Bank (AfDB) to co-finance a major energy project that will extend electricity access to rural areas and reduce greenhouse gas emissions.

In a statement seen by The Exchange Africa, the AfDB said the new funding follows the approval for $84.2 million made in May 2021 for the same project.

According to the lender, financing for the Transmission System Reinforcement and Last Mile Connectivity project comprises $140 million from the African Development Bank sovereign window and a $40 million co-financing from the Africa Growing Together Fund (AGTF), and resources from the ADF.

The project will entail the construction of over 1,000 km of medium voltage and 3,300 km of low voltage lines to boost last-mile access.

It will also build 137km of high voltage line and six substations required to strengthen the grid. Other features of the project include the installation or upgrading of over 1,200 distribution transformers and related infrastructure.

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The project is expected to connect 77,470 households to the electricity network for the first time and connect 75 schools, eight health centres and 65 administration centres. It will also enable the evacuation of 125MW of clean energy from hydropower plants and create 455 permanent jobs and 760 part-time jobs, with 30% of these going to women.

Aissa Tour-Sarr, the African Development Bank’s Country Manager in Rwanda, said the rationale for the Bank’s intervention is to support the country’s pursuit of 100% access to electricity by 2024.

Aissa added that the project would contribute to enhancing the quality of life by facilitating improved education and health provision and promoting private sector growth.

“This contributes to Rwanda’s social and economic transformation agenda which aims to transition Rwanda from a developing country to a middle-income country by 2035,” said Aissa.

The Bank-financed grid access component of the project will target households in southern Rwanda, where connection rates are below 34%.

The main cities targeted are Gisagara, Huye, Nyamagabe, Nyanza, Nyaruguru, and Ruhango. The project will also strengthen the network in Nyarugege city, Nyamata, Kigali Hub, and other zones across the country where rising commercial activity has increased electricity demand.

Commenting on the same, the bank’s Vice President for Power, Energy, Climate & Green Growth, Dr Kevin Kariuki said the project will not only contribute to addressing Rwanda’s energy poverty, including the pursuit of universal access by 2024 but also aligns closely with the Bank’s High 5 priorities.

“Moreover, the project exemplifies the transformational impact of effective coordination amongst development partners.”

The Transmission Reinforcement and Last Mile Connectivity project is a component of the $670 million multi-donor Rwanda Universal Energy Access program, which is being co-financed by the World Bank Group, OPEC Fund for International Development, Saudi Fund for Development, Agence française de développement, and the European Investment Bank.

The African Development Bank Group’s contribution, including last year’s approval funding resources of $84.2 million from the African Development Fund, the Bank Group’s concessional window, represents around 40% of the program’s costs.

The project aligns with two of the Bank’s High-5s – “Light Up and Power Africa” and “Improve the Quality of Life for the People of Africa.”

As of March 2022, the African Development Bank has financed over $1.4 billion worth of projects in Rwanda, of which $498 million has been directed towards energy project projects.

AfDB extends $83.6mn in grants to boost Ethiopia-Djibouti electricity trade

In a related story, The Exchange Africa recently reported that AfDB had approved two grants worth $83.6 million to boost cross-border trade in electricity between Ethiopia and Djibouti and to deepen integration in the Horn of Africa sub-region.

The bank’s board said the funds comprise a $69.65 million grant to Ethiopia and the second grant of $13.93 million to Djibouti.

Both have been sourced from the African Development Fund, which is the African Development Bank’s concessional financing window.

The Ethiopia–Djibouti Second Power Interconnection project will entail the construction of nearly 300 km of interconnector line, 170 km of transmission lines, and new construction or renovation of substations in the two countries.