Rwanda will in two years begin to generate electricity from peat energy sources at a large scale following the signing a $283 million (Rwf 169.8billion) loan agreement with Hakan Mining and Generation Industry and Trade Inc to set up a power plant.The plant will be set up in the peat-rich wetlands of Nyanza and Gisagara districts in the Southern Province.Once complete, the peat-fired power plant is expected to ease pressure on the country’s sole power provider, Energy and Water Sanitation Authority (EWSA), by acting as an alternative source to hydropower."Two phases will be involved in this project, the first being peat mining and finally construction of a power generating plant. Works will begin around September 2013 and finalised within four years, although we are likely to start benefiting from power generation within two years,” the Minister of State in Charge of energy and Water, Emma Francoise Isumbigabo, said in an interview with The New Times yesterday.Negotiations with the Turkish firm began in June this year after both parties entered into a Memorandum of Understanding, with Isumbingabo noting that electricity production from peat energy is a "quicker way out” compared to the longer hydropower projects which generate over 90 percent of the country’s  electricity. Peat is derived from a build up of decayed vegetation, with the country estimated to have reserves of up to 155 million tonnes capable of generating 450MW of energy annually, most of which are located in the Southern Province.Around 16 per cent of Rwanda’s population have access to electricity. The government seeks to raise coverage in rural areas to 35 per cent in rural areas by 2020.