AfDB provides $24mn to Rwanda for regional hydropower project

21 Mar 2016, 12:00 am
Financial Nigeria


The project will increase Rwanda’s clean energy generation capacity by about 50 megawatts.

Rwandan President Paul Kagame

The African Development Bank has approved a $24 million loan to support Rwanda’s contribution to the development of the Multinational Ruzizi III Hydropower Project – 147 megawatt power project that involves three countries in the African Great Lakes region: Rwanda, Burundi, and the Democratic Republic of Congo.

According to a statement by the AfDB last week, the project will increase electricity trading within the region and beyond. The total cost of the Multinational Ruzizi III HPP is estimated at $625 million. As a public-private partnership project, AfDB’s total contribution to the project is $190 million, the remaining financing is expected from other development partners and the three governments. A private sector partner, acting in the capacity of investor/developer and major shareholder has been recruited and will be awarded a 25-year concession to operate the project on behalf of the countries.

AfDB said Rwanda’s socioeconomic development has been negatively impacted by serious electricity supply disruptions and high electricity prices. Much of Rwanda’s electricity sources are from fossil fuels. The project model is a run-of-the-river hydroelectricity (ROR), a type of hydroelectric generation plant whereby little or no water storage is provided. The output will be equally shared among the three participating countries.

The project will increase Rwanda’s clean energy generation capacity by about 50 megawatts. Additional benefits of the project include the creation of permanent and temporary jobs and a reduction in greenhouse gas emissions.

“Sustainable regional infrastructure is necessary for strong regional integration and key to successfully tackling today’s most challenging climate change-related challenges,” Negatu Makonnen, AfDB Resident Representative, said. “The Multinational Ruzizi III Hydropower Plant Project is central to AfDB’s strategic vision for the development of the African energy sector through the promotion of universal access to low-carbon and inclusive modern energy.”

AfDB’s active energy projects portfolio in Rwanda now exceeds $180 million while the Bank’s overall portfolio in the country is $600 million, 66 percent of which are infrastructure projects.