The Development Bank of Rwanda plans to raise money through the capital market to support the energy sector as it plans to boost off-grid electricity in accordance with its five-year objectives.
This was announced by Dennis Rugamba, BRD’s Investment Analyst for the Energy Sector, during a presentation at “Renewable Energy for Sustainable Growth – Matchmaking, Conference & Exhibition” held in Kigali on the 19th and 20th October.
In its five-year strategic orientations (2016-2020), BRD focuses on five key strategic sectors to foster the country’s economy, one of which is energy.
“In its five year objectives, the bank will foster the development in the energy sector by contributing to the generation of at least 65.5 MW and the saving of 6.6 MW through the efficient energy programme,” Rugamba said.
During the first 18 months of implementation of the strategic plan, the bank has managed to finance energy projects for the generation of 82.2 MW, compared to 10 MW targeted in this period.
BRD’s current pipeline for electricity generation has project equivalent to 52.5 MW, for which the bank will partner with other FDIs and invest up to $24.3 million.
Its current intervention in energy stands at $37.5 million invested into projects that have a cumulative total cost of $378 .9 million and a capacity of 93.4 MW.
The bank is also the custodian of the Renewable Energy Fund worth $48.94 million under a subsidiary loan agreement with the government. It consists of a line of credit and direct financing for off-grid projects.
This latter will start with three windows: on-lending through SACCOs to households; on-lending through banks to households, OSCs & SMEs; and direct financing of mini-grid developers.
The Renewable Energy Fund was set up to facilitate private sector participation in renewable off-grid electrification and increase electricity access through off-grid technologies. It aims to reach 1,280,000 individuals through 445,000 off-grid connections. 52% of the beneficiaries should be women.
Eligible SACCOs and banks will enter into a loan agreement with BRD. Commercial banks will then sign service agreements with off-grid solar companies to coordinate their energy lending, disbursement and customer service processes. SACCOs will sign loan agreements with households and will monitor the off-grid solar companies’ customer service.
The energy sector is developing rapidly, and the energy policy targets to achieve 70% access to electricity by 2018 and 100% by 2024. The current installed capacity stands at 208 MW, while demand is predicted to reach 512 MW in 2024.