1. Region speeds up energy projects with an eye on attracting more investments
By ALLAN OLINGO
The East African
East African governments have
doubled their efforts to in-
crease energy output, with several
multi-million dollar projects on
the cards. The aim is to meet ris-
ing demand as well as attract more
investments, after the 2014 World
Bank Ease of Doing Business re-
port noted that low energy output
remains a hurdle for investors.
In the past two months,
Rwanda, Tanzania and
Kenya have announced
a number of power up-
grade projects.
Rwanda recently an-
nounced that it will meet
its 2017 target of increasing access
to electricity to 70 per cent of the
country’s population from 22 per
cent currently. The country’s en-
ergy sector strategy plan 2013-18
projects an electricity demand of
563MW to be generated from a
sustainable generation mix of hy-
dro, methane, geothermal and so-
lar, gradually phasing out thermal
power by the end of 2017.
Last week, James Musoni, Rwan-
da’s Minister of Infrastructure,
said that the country was working
hard to streamline investment pro-
cedures in the power sector, aimed
at attracting the private sector.
“The government through the
Rwanda Development Board plans
to achieve an additional 408MW
by 2018. We want to stand out in
all the key investment areas. Ener-
gy costs have been our undoing
especially when it comes to at-
tracting investments. We want
to reverse this,” Mr Musoni
said at an investor’s confer-
ence in Kigali targeting
the energy sector.
According to the
World Bank’s Ease of
Doing Business report,
Rwanda’s energy is ex-
pensive and limited, with
electricity costing 22 US
cents per kWh compared
with 8 US cents-10
US cents in the rest
of the region. Con-
sumers in Ugan-
da and Tanzania
pay 11.8 and 7.4
US cents per
kilowatt of
electr icit y
respective-
ly, while
in Kenya the cost is 25.7 US cents.
The 2013 World Bank electricity
consumption figures rank Rwan-
da’s per capita energy consump-
tion at 25.78 kilowatts, Burun-
di’s at 18.34 kilowatts, Uganda’s
at 65.94 kilowatts, Tanzania’s at
76.50 kilowatts and Kenya’s at
128.24 kilowatts.
Rwanda’s electricity generation
more than doubled, from 45MW
to 110.8MW, between 2005 and
2013, increasing access from 2 per
cent to 22 per cent of the popula-
tion. Currently, Rwanda is plan-
ning a number of energy projects
including the $300 million 80MW
Rusumo hydroelectric project to
be constructed on Kagera River,
the $450 million 147MW Rusizi lll
hydro project, and a 200MW meth-
ane gas concession in Lake Kivu.
“We also plan to construct other
domestic hydropower plants with
a 150MW installed capacity and
various high voltage transmis-
sion lines to evacuate generated
electric power for stable and re-
liable power supply to manufac-
tures. This is why we are looking
for $5 billion energy investments
through public-private partner-
ships,” said Mr Musoni.
Imported power
Mr Musoni said that in the short
term, the country will be look-
ing to its neighbours to import
cheaper power to meet the energy
demand.
“We will be importing cheaper
power from East African Power
Pool member states which will
help strengthen bilateral power
trade,” said Mr Musoni.
Rwanda is also to benefit from
a $6.2 million loan from the Neth-
erlands that will go towards the
third phase of the Energy Access
and Rollout Program (EARP3).
The money will be used to speed
up a number of projects.
“We are supporting Rwanda in
its energy projects so that it can
meet the demand of investors,”
said Leoni Cuelenaere, the Nether-
lands ambassador to Rwanda, dur-
ing the grant-signing ceremony
last month. “Rwanda has shown a
desire to develop and we need to
support it in attracting more pri-
vate sector investments. It needs
to have more people connected to
the grid.”
World Bank director for East Af-
rica Johannes Zutt said that Rwan-
da has a huge demand for energy
because of its improved business
environment that hFas seen inves-
tors flock into the country.
“The country needs the right
regulatory environment to attract
investors into its energy sector.
Its energy deficit remains a major
constraint to private investment,”
Mr Zutt said.
Tanzania has also disclosed its
energy strategic plan that will
see it generate up to 15,000MW of
power by 2025. Tanzania’s Minis-
ter for Energy and Minerals, Sos-
peter Mhongo, said that the cur-
rent electricity consumption in the
Technicians from
Kenya Power
replace old
electricity poles
in Eldoret town
in Kenya’s Rift
Valley. Pic: File
The Kenya-Tanzania
interconnection is to
become a critical link in a
future regional power pool.”
Kenya Electricity Transmission Company
KEY PROJECTS
Rwanda: The $300 million
80MW Rusumo hydroelectric
project to be constructed in
Kagera River; the $450 million
147MW Rusizi lll Hydro project,
and a 200MW methane gas
concession in Lake Kivu.
Also on the cards are domestic
hydropower plants with a
150MW installed capacity
and various high voltage
transmission lines.
Tanzania: The government will
spend $228 million to construct
a 400kV power transmission
line that will interconnect
its national power grid with
Kenya’s through Namanga.
The proposed project
includes the construction and
operation of a 510km-400kV
interconnection power line.
Kenya: The country has added
140MW of geothermal into
the grid. Last week, the Kenya
Electricity Generating Company
connected the Olkaria I unit
five to the national grid, paving
the way for the completion of
the 280MW geothermal power
project.
THE NUMBERS
408MW
Additional power
that Rwanda plans to
achieve by 2018.
15,000MW
Amount of power that
Tanzania hopes to
generate by 2025.
6,362MW
Added installed
capacity that Kenya
targets by 2016.
The EastAfrican
OUTLOOK
DECEMBER 6-12,2014
28
Region speeds up energy projects with an eye on attracting more investments
to have more people connected to
the grid.”
World Bank director for East Af-
rica Johannes Zutt said that Rwan-
da has a huge demand for energy
because of its improved business
environment that hFas seen inves-
tors flock into the country.
“The country needs the right
regulatory environment to attract
investors into its energy sector.
Its energy deficit remains a major
constraint to private investment,”
Mr Zutt said.
Tanzania has also disclosed its
energy strategic plan that will
see it generate up to 15,000MW of
power by 2025. Tanzania’s Minis-
ter for Energy and Minerals, Sos-
peter Mhongo, said that the cur-
rent electricity consumption in the
country, which stands at just 100
units per person, is way too low
when compared with say the 4,400
figure for South Africa.
“We are trying to improve the
electricity situation in the coun-
try by increasing the rate to 3,000
units by 2025. We have had prob-
lems of power fluctuations and
we are addressing these by con-
structing a power transmission
line that will connect the national
power grid with Kenya’s,” said Prof
Mhongo.
Tanzania will thus spend $228
million to construct a 400kV
power transmission line that will
connect its national power grid to
Kenya’s through Namanga. The
project will interconnect Zambia,
Tanzania and Kenya through Isin-
ya, Namanga, Arusha, Singida and
Manyara. The project, Prof Mhon-
go said, is set to start early next
year and is expected to be com-
plete by the end of 2016.
According to the Kenya Electric-
ity Transmission Company (Ketra-
co), the proposed project includes
the construction and operation of
a 510km-400kV interconnection
power line. It is expected that the
interconnection will start from a
proposed Ketraco 400kV sub-sta-
tions at Isinya in Kenya, and then
follow the alignment established
under the Nairobi-Arusha line
study up to Arusha in Tanzania.
From Arusha, the line will contin-
ue to Singida, where a 400kV sub-
station is planned by the Tanzania
Electric Supply Company.
“We have made positive
progress in the implementation
of power generation and distri-
bution projects countrywide. We
are optimistic that the intercon-
nection with Kenya will help deal
with power fluctuations. We are
also looking at increasing the in-
ter-country power business with
Kenya,” said Prof Mhongo.
In a statement, Ketraco said
that the Kenya-Tanzania intercon-
nection is to become a critical link
in a future regional power pool,
facilitating power exchange and
the development and integration
of electricity markets between Bu-
rundi, DR Congo, Rwanda, Ugan-
da, Kenya and Tanzania.
In the past few months, howev-
er, Kenya has largely gone slow on
exporting power to its neighbours
as it seeks ways to balance power
source shifts. Since January this
year, the country has only export-
ed 12.63 million kilowatts to Ugan-
da and Tanzania against an import
of 66.91 million kilowatts from the
same countries.
Poor electricity framework
In September, the Global Com-
petitiveness Report released by the
World Economic Forum noted that
Kenya’s overall competitiveness
is held back by a poor electricity
framework, which hinders its long-
term economic growth, particular-
ly in view of its transition towards
middle-income status.
“The country’s infrastructure,
particularly electricity, does not
meet the needs of Kenya as the
largest East African economy, and
remains an area of serious con-
cern,” the report says.
In August, Kenya’s Energy and
Petroleum Principal Secretary
Joseph Njoroge said that by the
end of this year, key geothermal
power projects will be completed
and a total of 280MW will be in-
jected into the power system from
four power plants.
Kenya is targeting an added
installed geothermal electricity
generation capacity of 3,533MW,
1,564MW of hydropower and
1,265.5MW of wind energy by
2016.
The country added 140MW of
geothermal into the grid between
July and August, a further 70MW
in September, and an additional
70MW in October. Last week,
the Kenya Electricity Generating
Company (KenGen) connected the
Olkaria I unit five to the national
grid, paving the way for the com-
pletion of the 280MW geothermal
power project. The unit, still being
tested, is now feeding 52.5MW to
the national grid and marks the
final phase in what is seen as a
major step towards significantly
lowering the cost of electricity in
the country.
“On Monday [November 17],
we achieved a major milestone
on the 280MW project when unit
five was synchronised with the na-
tional grid. This is the last of the
four 70MW units in the 280MW
geothermal project,” said KenGen
chief executive Albert Mugo.
Early this year, Uganda also said
that it was working towards in-
creasing electricity supply to the
national grid in order to meet the
additional demand from its do-
mestic and commercial users.
Uganda’s current generation ca-
pacity stands at 801MW while the
total power generation stands at
535MW against a peak demand of
520MW. The country expects this
to improve upon the completion of
the Isimba dam project that will
add 183MW to the national grid
by 2017, and the Karuma project
that is expected to add 600MW
in 2019.
Above: The 28MW Nyabarongo
hydropower plant in Muhanga
district, southern Rwanda.
Left: Workers at the site of the
Sang’oro hydropower station in
Kisumu, western Kenya.
Pictures: Cyril Ndegeya and
Jacob Owiti
The Kenya-Tanzania
interconnection is to
become a critical link in a
future regional power pool.”
Kenya Electricity Transmission Company
Engineers at
work at the
geothermal
steam
generation
project at
Menengai
crater in
Kenya’s
Rift Valley.
Picture:
Joseph Kiheri
CURRENT ELECTRICITY INSTALLED CAPACITY VERSUS DEMAND (MW)
Rwanda’s energy sector strategy
plan 2013-18 projects an electricity
demand of 563MW to be generated
from a sustainable generation mix of
hydro, methane, geothermal and solar,
gradually phasing out thermal power
by the end of 2017.
In Tanzania’s energy strategic plan,
the country hopes to generate up to
15,000MW of power by 2025.
On its part, Kenya is targeting an
added installed geothermal electricity
generation capacity of 3,533MW,
1,564MW of hydropower and
1,265.5MW of wind energy by 2016.
The EastAfrican
OUTLOOK
DECEMBER 6-12,2014
29