A global study, Climatescope, has ranked Rwanda the 5th nation among those that are leading the global clean power transition.
Climatescope is a unique country-by-country assessment, interactive report and index that evaluates the investment conditions for clean energy in emerging markets.
It profiles 103 markets worldwide and evaluates their ability to attract capital for low-carbon energy sources while building a greener economy.
Climatescope, published by BloombergNEF, is a snapshot of where clean energy policy and finance stand today, and a guide to what can happen in the future.
This marks the seventh year of the Climatescope project. Rwanda was 17th last year.
Rwanda’s power mix is based heavily on hydro, at just under 50% as of June 2018, but other technologies, such as solar, natural gas and diesel are represented. State-owned Energy Development Corporation Ltd. has been the most prominent developer, but there are a multitude of private players involved in Rwanda’s generation sector. The country has an oversupply of on-grid generation, as well as a backlog of contracted projects. As a result, new developers will not be able to secure permitting until the roughly 200MW of generation projects with existing contracts are commissioned. The country is instead focusing near-term investment into transmission and distribution, both of which are fully controlled by REG.
Clean Energy Policy
Growth in Rwanda’s energy sector has been driven by two major targets: 563MW of generating capacity by 2018 and 100% electrification by 2024. While the country failed to meet the first goal, and was forced to push the second goal back (it was originally 70% by June 2018), the progress the country has made is unprecedented for Sub-Saharan Africa. The country has quadrupled its electrification rate from 10% in 2010 to over 44% in 2018 and increased generating capacity from 85MW to 216MW over the same period. The off-grid sector is expected to make up 48% of Rwanda’s electrification rate by 2024, and a healthy congregation of solar home system providers are now successfully doing business in the country.
Clean Energy Investment
Investment in Rwanda’s clean energy space has been volatile, despite consistent year-on-year growth in electrification. Most historical on-grid investment has been in hydro, natural gas and solar, but national utility Rwanda Energy Group (REG) has halted all permitting for future on-grid generation due to a current oversupply. Most future investment in Rwanda’s energy market is expected to go toward expansion of the grid to meet this oversupply and to off-grid companies working with communities that won’t have grid access in the near future. The financing matrix has been dominated by donor groups, most notably through a EUR 200m loan from the European Union and the World Bank’s Scaling Up Renewable Energy Program (SREP).