The Government and the Federal Republic of Germany, yesterday, signed a bilateral agreement worth €15 million (about Rwf13 billion) to support energy supply in the country and the Great Lakes region.

During the signing ceremony at the Ministry of Finance and Economic Planning headquarters in Kigali, the minister, Amb. Claver Gatete, explained that the grant will be fully designated to the regional "Hydropower Station Ruzizi III” project.

The fund is expected to contribute to improving energy supply in Rwanda as well as in fostering socio-economic development in the Great Lakes region as the hydro power project is shared by Rwanda, Burundi and the DR Congo.

Gatete said: "This bilateral agreement shall increase Rwanda’s clean energy generation capacity by about 50 megawatts. We very much appreciate the support of the German government.

"Additional benefits of the project, besides opening the area to modern infrastructure, will include the creation of permanent and temporary jobs and a reduction in greenhouse gas emissions.”

A joint communication indicates that the grant will be implemented by the German KfW Development Bank in cooperation with the Government, the implementing Special Project Company of Ruzizi III, and other donors including the African Development Bank (AfDB), World Bank, and the European Union.

Significance of the deal

German Ambassador to Rwanda Peter Fahrenholtz said: "This agreement underlines the long-standing and proven cooperation between our two countries based on friendship and mutual trust.

"Germany is committed to affordable, reliable and sustainable energy supply for Rwandan citizens, but also for Rwanda’s neighbours Burundi and DR Congo. We know that energy is a high priority for Rwanda’s development and we are very happy to make a contribution to improving the energy supply for Rwanda so that, in the end, its citizens can have a better life.”

Amb. Fahrenholtz stressed that it is also a regional project and there is hope the project will also play a positive role in fostering peace and security in regional countries as they work together.

The Ruzizi III project is a 147-megawatt hydropower joint project between Burundi, DR Congo and Rwanda, intended to be developed as a public-private partnership project.

Feasibility studies have been completed and the total project cost is estimated at $650 million to be shared by the three governments.

River Rusizi, which separates Rwanda and Burundi from DR Congo, offers an energy potential of 400 megawatts.

Since the late 1950s, River Ruzizi has been utilised for electricity production by the three countries. However, according to the Ministry of Finance, existing hydro power plants Ruzizi I and II, with a capacity of 28 and 44 megawatts, respectively, are nowhere near sufficient to meet the energy demand of the population and the economies.

The Division of Labour arrangement allows Germany to be active in the Education (TVET), Decentralisation, and Private Sector development, Silent in Financial Sector and provides support to the PFM basket fund and Regional Projects (Centre of Excellence for Health, Improvement of the Investment Climate, Microfinance sector-MIFSSA, ICGLR and Energy.

Ruzizi III is reportedly the first regional project designed as a public-private partnership aimed at optimising the hydropower potential of the River Ruzizi.

In March, the Government and the AfDB signed a financing agreement, worth $24.17 million (about Rwf9 billion), to support Rwanda’s contribution to the development of the Ruzizi III project.

The entire Ruzizi project is estimated to cost more than $625 million.

This includes the AfDB’s overall contribution to the Multinational Ruzizi III hydro power project of $190 million covering contributions for Burundi, DR Congo and Rwanda, in addition to resources to be lent directly to the project company on commercial terms.

Additional financing is expected from other development partners and the three countries.

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