The regional Rusumo falls hydroelectric power plant is expected, upon completion, to help cut electricity tariffs, according to Felix Gakuba, the Managing Director of the Energy Development Corporation Limited (EDCL).
The joint project shared by Rwanda, Burundi, and Tanzania will generate 80MW, with each country getting 26.6MW.
"We expect the plant to be commissioned by March 2023 with all 26MW available for evacuation. We expect that once this cheaper electricity is dispatched into the national grid, tariffs will be revised downwards for both domestic and industrial tariffs and hence facilitating business and promoting economic growth,” Gakuba told Doing Business.
However, he explained, it’s not only the 26MW from the Rusumo power project that will lead to tariff adjustments since "we have other [power] generation projects in the pipeline that we believe once commissioned will significantly contribute to tariff reduction.”
These include, he noted, the 70MW Hakan peat to power project whose first unit of 35MW are available and the second unit is under testing and commissioning. Others include the 56MW methane gas Shema power project expected on board in May 2023 and the 43.5MW Nyabarongo II hydro power plant expected on board by 2027.
Construction of the multinational Rusumo falls hydroelectricity plant is financed by the World Bank at a cost of $340 million. Transmission lines that will evacuate power to the national grid in the three countries are financed by the African Development Bank (AfDB) to the tune of $121 million.
Once the plant is commissioned and the 26MW are on the national grid, Gakuba said, the plan is to decommission the existing thermal or diesel-run power plants "which are currently expensive to run due to fuel consumption.”
Decommissioning thermal plants happens for reasons like when they are operating at a very high cost or beyond their useful life or having become inefficient for electricity generation.
Gakuba said the availability of power from the Rusumo project will help increase the country’s installed and generation capability to ensure reliable and sufficient electricity supply as well as boost economic growth.
"In the case of REG, the plan is to decommission or put on hold operating thermal or diesel or fuel run plants to serve as backup once generation projects like the 26MW Rusumo power, 70MW Hakan peat to power project, the 56MW methane gas Shema Power project, the 43.5MW Nyabarongo II hydro power plant, and others, are available.
Asked how very expensive the existing thermal or diesel-run power plants are, Gakuba noted that, generally, running costs for electricity plants are similar across technologies, the only major difference being inputs costs.
"For thermal, therefore, the key component that makes prices vary is the fuel input. This input is imported, and its market prices fluctuate depending on how international markets behave worldwide and inflation levels,” he said.
"Hence when fuel prices increase, the cost of running thermal or diesel-run power plants also increases.”
Rwanda’s current installed capacity is 276.068MW while generation capacity varies day by day depending on the plant’s operation and maintenance plans.
Power generation capacity tripled from 76MW in 2010 to 208MW in January 2017.
In mid-2021, the Minister of Finance and Economic Planning, Uzziel Ndagijimana, noted that the government will achieve its 100 per cent electrification target, by 2024, as set in the National Strategy for Transformation (NST1).
The government’s ultimate goal is to ensure that every Rwandan household has access to electricity by 2024.