Banks urged to help fund energy projects

There remains a huge gap in the energy production within the eastern African region that could hinder the projected economic growth, a new United Nations report says. The “Energy Access and security in Eastern Africa –status and enhancement pathways” report shows that Rwanda, Ethiopia and Uganda, countries that are aspiring for middle income status, need to invest more in the energy sector to help in achieving their economic growth projections. The report was released in Kigali yesterday during a technical meeting to review the energy policy in the country. It shows that globally, 1.3 billion people lack access to electricity and 2.7 billion lack clean cooking facilities. The international energy agency states that even with investments of $1 billion per year between 2010 and 2030 for on-grid electricity connections, one billion people would still be without electricity. It also says with the current population growth, billions of people will continue to live without cooking facilities. Yohannes Hailu, an economic affairs officer in charge of energy at the UN Economic Commission for Africa Rwanda office, said to bridge the low energy production gap, there was need to invest in untapped potential areas in the sector. He said countries needed to strengthen cooperation in the energy sector. “Bilateral approach is working; there is product sharing between Burundi, Tanzanian DR Congo and Rwanda and other regional countries. What is needed is to invest in regional energy infrastructures to help transmit the energy,” Hailu said. Banking sector queried During the discussion, participants were concerned about how local banks were reluctant to fund energy-related projects, stressing that it was imperative for governments to involve private sector in energy development. Edward Ndayisaba, the vice chairperson of energy and private developer association under Private Sector Federation, said most private investors in the country are into biogas and cooking stoves, but it was important to also get involved in the power production. “Private sector is still new in this sector; we are still not yet there and government has not encouraged and involved us in production. It is important for both government and private sector to work together in energy production,” he said. Of the 10.5 million people in Rwanda, only 18 per cent have access to electricity. But efforts are in place to bridge the gap. Emanuel Kamanzi, the senior principal engineer in charge of energy and water in the Ministry of Infrastructure, said: “We intend to increase the importation of power from Kenya and Uganda by the end of next year. We will need to import an additional 50MW from Kenya and 30MW from Uganda,” he said. Currently Rwanda imports 1.7 MW from Uganda, but still exports 1.7 to Uganda’s border districts. However, government is projecting to produce 562MW by 2017. Electricity tariffs are higher compared to other regional countries. One kilowatts cost Rwf134 for domestic consumer, while industrial pay Rwf126 per unit. Regional countries such as Uganda, Kenya and Tanzania have an average price of Rwf100 per unit.

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Banks urged to help fund energy projects