The Government of Rwanda through BRD in collaboration with the World Bank, and Swedish International cooperation agency SIDA have launched a subsidy window and Guarantee framework to provide credit facilities to SACCO’s, Banks and microfinance institutions that will lend to households for off-grid connections.
The World Bank approved a US$15M subsidy that is expected to benefit 182.927 low-income households living in off-grid areas; Whereas Swedish International cooperation agency SIDA disbursed US$20M to spur the implementation of the scheme.
“The scheme does not cover 100% subsidy rather the beneficiaries are expected to contribute in the form of cash or pay as you go payments, with participating companies that will channel the subsidy to beneficiary households,” said Kampeta Sayinzoga the BRD CEO.
“The subsidy will base on Ubudehe categories where 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 added affordability has been a serious challenge in off-grid sector where majority of the households living in none –electrified areas cannot afford solar home systems even if it is provided in credit. A factor to give a hand through off grid participating solar companies.
Out of US$1.3B to be disbursed only 6% of the funds have been disbursed hence BRD calling banks, solar companies Sacco’s to apply for participation until March 2021.
Eligible Companies will not exceed US$1M for the 3years of implementation of the projects and they have to fulfil criteria of eligibility including; Having an agreement with EDCL; Provide warranty for solar system services and should have a recycling capacity among others.
These companies who will install SHS to households will also need an appraisal report from BRD and presents it for approval, BRD will then will request for a no objection from the world bank and then signs a subsidy agreement with the solar companies.
Sayinzoga said those working with Sacco’s will benefit from the guarantee 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 intends to uptake the renewable energy loans through partner financial institutions.
“We will not give out the entire disbursement but in instalments so that solar companies will take care the maintenance for at least 3years 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,” she said.
Rwanda’s minister of Infrastructure Amb. Claver Gatete 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, we also have Nyabarongo II with 43.5MW – the main challenge is the construction of transmission and distribution lines we need more private sector support to make it a dream come true,” he said.
As of April 2020, the Off-grid access rate is 15% of Rwandan households.
Households far away from the planned national grid coverage have been encouraged to use alternatively cheaper connections such as Mini-grids and Solar Photovoltaic (PVs) to reduce the cost of access to electricity.
Source: Taarifa Rwanda