A deal has closed to finance an 80 megawatt peat-to-power project in Rwanda that will improve access to electricity for 75 percent of the country’s off-grid population.
$350 million is being poured into the power plant; it will increase installed capacity in Rwanda by 40 percent and utilise significant local peat reserves. Just one quarter of the Rwandan population has access to reliable electricity despite it being one of Africa’s fastest-growing economies.
The plant is being constructed in the Mamba Sector of Gisagara District, one of the most remote areas in the country, and is set to be completed within three years. The Africa Finance Corporation is the Mandated Lead Arranger for the project debt, and has successfully arranged total senior debt facilities of US$245 million, contributing US$75 million in loans and providing an underwriting commitment of US$35 million.
Andrew Alli, CEO of AFC, commented on the announcement: “The move from costly external imports of fuel to more sustainable indigenous sources of energy such as peat will reap great rewards for Rwanda, not just in terms of the significant savings in foreign exchange hitherto used in importing expensive diesel oil for power generation, but also the positive economic and social benefits of providing more cost effective power for businesses and industries, as well as more affordable power for the people.
“AFC prioritises investing in projects that will have significant advantages for the local community, which this plant will. It will also make a huge contribution to powering Rwanda’s economic growth in the future, in line with the government’s objectives.”
Rwanda aims to provide 70 percent of its 12 million people with power from the grid or off-grid by 2018, and the country intends to become a lower middle-income country by 2020.