Posted on :Tuesday , 6th October 2020
The Government of Rwanda through BRD in alliance with the World Bank, and Swedish International cooperation agency SIDA ,have recently launched a subsidy window and Guarantee framework to offer credit facilities to SACCO's, Banks and microfinance institutions that will lend to households for off grid connections.
The World Bank permitted a U$15million subsidy that is projected to benefit 182.927 low income households living in off-grid areas, Whereas Swedish International cooperation agency SIDA disbursed U$20 million to spur the implementation of the scheme.
Kampeta Sayinzoga, CEO of BRD said, "The scheme does not cover 100% subsidy rather the beneficiaries are expected to contribute in the method of cash or pay as you go payments, with participating companies that will channel the subsidy to beneficiary households,"
"The subsidy will base on Ubudehe categories whereby, a beneficiary in category 1 of Ubudehe, will have a 90% percentage subsidy on a solar home system under 120USD, 70% on the second category and 45% on the third category".
She further stated that affordability has been a grave challenge in off-grid sector where majority of the households living in none-electrified areas cannot meet the expense of solar home systems even if it is provided in credit. A factor to give a hand through off grid participating solar companies.
Eligible Companies will not surpass 1million USD for the 3 years of implementation of the projects and they require to fulfil criteria of eligibility including; Having an agreement with EDCL; Make available warranty for solar system services and should have a recycling capacity among others.
Sayinzoga mentioned, those working with Sacco's will benefit from the assured framework where the solar home system itself will work as a collateral, she added female borrowers will have a 70% cover from the guarantee as men will have a 50% all with aims to uptake the renewable energy loans through partner financial institutions.
She also said, "We will not give out the entire disbursement but in instalments so that solar companies will take care the maintenance for at least 3 years which is the implementation period of the scheme. All these efforts are part of the national agenda that by 2024 all Rwandans should be connected at 100%. So far electricity access is at 48% off-grid and 52% on-grid connections".
Amb. Claver Gatete, Rwanda's minister of Infrastructure said there are different projects in the pipeline that will enable 100% connections by 2024.
"We have 80MW Rusumo project, 230MW Rusizi III project, Shema power project will give us 56mgw and Nyabarongo II with 43.5MW. The main task is the construction of transmission and distribution lines we need more private sector support to make it a dream come true," he stated.
As of April 2020, the Off-grid access rate is 15% of Rwandan households.
Households which are far away from the planned national grid coverage have been advised to make use of alternatively cheaper connections such as Mini-grids and Solar Photovoltaic (PVs) to reduce the cost of access to electricity.