Total Adoption of electric vehicles and related solutions in Rwanda will require up to $900 million according to Patrick Karera, the Permanent Secretary at the Ministry of Environment.
Transport sector in Rwanda is rapidly growing and much dependent on imported fossil fuel.
The fossil fuel is said to cause air pollution hazardous to health, noise pollution and emission of greenhouse gases that accelerate climate change according to environmentalists.
The overdependence on fossil fuel has also been found to have a strong effect on the trade balance.
Karera said that getting funding for transition to e-mobility to reduce such trade balance and mitigate climate change is mainly based on ‘a conditional approach to mitigate climate change’.
This is an approach of acquiring financing from international and external sources as described in "Nationally Determined Contributions (NDCs)”, a 10-year climate plan submitted to the United Nations Framework Convention on Climate Change (UNFCCC) last year to mitigate climate change.
Contrary to conditional measures, unconditional measures are mainly based on domestically supported and implemented mitigation measures and policies.
He said that there is a need for strong collaboration between the private sector and the government of Rwanda to scale up electric vehicles.
"Rwanda is open to investors interested in entering this space in support of Rwanda’s post-covid economic recovery where transport can play an important role in creating green jobs.
Beyond the benefits of reduced air pollution and lower greenhouse gas emissions, e-mobility is also supporting Rwanda in reducing our reliance on imported fuel which will create a more stable, self-reliant economy as we move towards middle-income status,” he said.
Incentives
By integrating incentives formulated by Rwanda Development Board and the law on promotion and facilitation for investment, he said Rwanda has seen a surge in e-mobility firms.
Government, he said, has proposed to create an enabling environment by proposing fiscal and non-fiscal incentives in a view to pave the way to electric mobility transition.
Fiscal incentives include electric tariffs for charging stations to be capped at the industrial tariff level.
"Electric vehicles will also benefit from a reduced tariff during the off-peak time and electric vehicles, spare parts, batteries and charging station equipment be treated as VAT zero rated products,” he said.
He said there is also exemption of import and excise duties on electric vehicles, spare parts, batteries and charging station equipment as well as withdrawing tax at customs of 5 per cent).
He said non-fiscal incentives include rent free land for charging stations ( for land owned by government), provisions of EV charging stations in the building code and city planning rules, green license plates to allow EVs getting preferential treatment in parking while free entry into congested zones is to be determined.
Free license and authorization for commercial EVs as well as access to high occupancy vehicle lanes (dedicated bus lanes) are among the non-fiscal incentives.
Such incentives also include providing preference to electric vehicles for government hired vehicles while companies manufacturing and assembling electric vehicles in Rwanda are given other incentives in the investment code such as 15% Corporate Income Tax (CIT) and tax holiday (irrespective of the investment value).
He said that with Ampersand Company, there is a waiting list of around 7,000 motorcycles wanting to move from fuel to electric motors among many companies with the same plans.
He said that other companies such as Victoria Motors have plans to exclusively promote Plug-in-Hybrid electric vehicles outlanders and electric buses in Rwanda.
"As of now 10 Plug-in-Hybrid electric vehicles were sold and are in operation with corresponding charging units while other 60 were in stock awaiting to be used during CHOGM 2021,” he said.
The International Finance Corporation, , he added, expressed interest to partner with Rwanda to introduce E-buses in the city of Kigali.
In this context, he said, IFC has dispatched a team of consultants to conduct the feasibility study of e-buses in City of Kigali.
Go Auto, a Malaysian company, he disclosed, expressed interest to bring electric buses in Kigali for public transport.
Saving Rwf20bn on fossil fuel imports
Director General of Transport -Ministry of Infrastructure (MININFRA) Alfred Byiringiro said that a study commissioned by the government found that transition to e-mobility requires a huge upfront cost.
However, compared to internal combustion engine vehicles, he said it was found that e-mobility is cheaper when you consider the overall cost.
"E-mobility being a new technology requires collaboration among partners. It will reduce overdependence on fossil fuel imports,” he said.
Benefits of introducing electric vehicles could save Rwf20 billion on oil importation up to 2025.
Deputy Director General of Rwanda Environment Management Authority, Faustin Munyazikwiye said that vehicular emissions are the largest contributor to air pollution in Rwanda’s urban centers.
According to Rwanda’s national inventory, transport accounted for 13% of the total GHG emissions.
There are currently over 180,000 vehicles in Rwanda according to statistics.
He said the number of registered vehicles in Rwanda has steadily increased with motorcycles accounting for over half of the total vehicles followed by passenger cars (34 per cent), and other vehicles such as buses and trucks (15 per cent).
As Rwanda continues to urbanize, vehicular emissions are also expected to rise and have a negative impact on public health outcomes,” he said.
Rwanda seeks to reduce 38 per cent of the emissions by 2030.
According to Egide Kalisa, a climate change researcher scaling up e-motos to 100 per cent of moto taxis in Kigali by 2025 would prevent an annual 70 kilotonnes of carbon dioxide emissions and annual health benefits equivalent to 1350 Disability-Adjusted Life Years (DALYs) per year.
The disability-adjusted life year (DALY) is a measure of overall disease burden, expressed as the number of years lost due to ill-health, disability or early death.