KIGALI - The African Development Bank (AfDB), has approved a loan to a tune of $25m to finance phase I of the Lake Kivu integrated-methane gas extraction and power production facility (KivuWatt Project) in Rwanda.

The project, involves gas extraction using a floating barge located in Lake Kivu, approximately 12.5 km offshore from Karongi town.

The extracted gas will be further processed and pumped to a methane gas fired plant on shore.

Phase I of the project includes the construction of gas extraction and processing facilities and a 25 MW gas fired power plant.

"The Bank’s intervention is in line with its country strategy for Rwanda, which among other things, focuses on the development of Rwanda’s economic infrastructure, including electricity generation, transmission and distribution.  The Bank’s role in the project is also intended to serve as a catalyst to attract private investment into the sector,” said Diko Mukete, the AfDB Resident Representative, in an interview with The New Times on Saturday.

Mukete observed that the project will provide a more reliable and affordable power supply to domestic, commercial and industrial users.

"At present, there are shortages in the power supply and commercial and industrial users have to install and run own generation facilities, which are more costly and very inefficient,” he said.

He also noted that the project will help to increase the country’s energy security by providing additional electricity to the national grid.

"Once completed, the KivuWatt project will contribute towards addressing the existing electricity supply constraint by increasing the installed generation capacity by almost 37 percent,”

Phase I is scheduled to start delivering power in early 2012 contributing 25MW, increasing Rwanda’s installed capacity to 40 percent.

Currently, electricity coverage stands at 9 percent with only 68.4 MW of installed power capacity.

The KivuWatt project is based on the Government’s pilot project (KP1) Government’s pilot project-  which established the existence of commercial quantities of gas concentrations in the lower resource zone in Lake Kivu.
KP1 also confirmed the viability of gas extraction and treatment using a floating barge.

"This is another project where Rwanda is reaping the benefits of having a visionary leadership and a purposeful government, which is focused on its home grown priorities” Mukete observed.

KivuWatt is a wholly owned subsidiary of Contour Global, which signed an agreement worth $325 million with the government in 2009, to develop an integrated gas extraction facility in L. Kivu.

The company has been granted a concession for a 25 year period, to build, own, and operate a gas extraction facility on Lake Kivu and an onshore power station with a capacity of producing 100 MW.

Phase II includes the expansion of phase I facilities to produce an additional 75MW.

KivuWatt has also signed a Power Purchase agreement with Electrogaz under which the entire output of the power plant will be available to RECO.

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