Honorable Minister of Infrastructure James Musoni, Jean Bosco Mugiraneza, CEO of Rwanda Energy Group, Zelda Weitz, Chief Operating Officer for Symbion Power, USA, fellow diplomatic colleagues, distinguished guests, Good Morning. Mwaramutse and Karibu! As I know I will have forgotten someone I would like to lean on my favorite phrase here in Rwanda – All Protocol observed. I am pleased to join you today at this conference that has brought together the private sector, donors, and various Rwandan agencies that are involved in energy and infrastructure development. It is good to be here with all of you.
In June 2013, President Obama launched Power Africa, an innovative partnership to add 10,000 megawatts of new and cleaner power generation capacity and 20 million new business and household connections. One year later, in 2014, President Obama tripled the goals of Power Africa, announcing at the U.S.–African Leadership Summit new targets of 30,000 megawatts and 60 million connections. These ambitious – but achievable – goals will double access to electricity for the people of sub-Saharan Africa, where more than two out of three people still lack access to reliable electrical supply.
And as President Obama stated this July in his speech to the African Union in Addis Ababa, “Instead of just sending aid to build power plants, our Power Africa initiative is mobilizing billions of dollars in investments from governments and businesses to reduce the number of Africans living without electricity.”
Such work has to be collaborative; Power Africa is not only a U.S. initiative. It has grown to include formal partnerships with the World Bank, the African Development Bank, Sweden, and the European Union, which in total, have committed $11.8 billion in support of Power Africa.
It is important to note that Power Africa’s progress is also driven by private sector partners, fueled by the vision and experience of African leaders and the needs of their citizens, and enhanced by the public sector’s technical and financial resources. Over 100 private sector partners have committed more than $30 billion in support of Power Africa and our goal of doubling access to electricity in sub-Saharan Africa.
For example, Power Africa developed the framework that resulted in the signing of Ethiopia’s first independent power purchase agreement for up to 500 megawatts (MW) of clean geothermal power. Power Africa is also announcing a new $75 million “Beyond the Grid” loan portfolio guarantee program. The “first mover” facility provides commercial lenders and investors with incentive to scale-up off-grid energy investments across sub-Saharan Africa. There are several U.S. companies looking to utilize this loan guarantee program, including CrossBoundry Energy, which I believe is with us today at this conference.
Power Africa is a sterling example of the United States’ new model of development — twelve U.S. Government agencies, African governments, the private sector, and the global funding community working together to strengthen the world’s economies, build domestic capacity, and put all of our societies on a more prosperous and sustainable path.
And here in Rwanda, American companies are at the forefront of helping Rwanda meet its energy needs. Rwanda has set an ambitious goal to more than triple power generation from a peak generation capacity level of 160 Megawatts today to 563 Megawatts by mid-2018.
On the access side, Rwanda has set an equally ambitious goal to increase access to reliable electricity from the current rate of 23 percent to 70 percent by mid-2018. These are very, very ambitious goals. It will take an estimated $3 billion in investment, from the private sector, donors and the government, to meet these goals.
The U.S. Embassy here in Kigali is engaged with the private sector and government to help significantly ramp-up power generation and access in Rwanda. I am excited about the progress we have made over the past couple of years and the potential for further U.S. investment and engagement through Power Africa.
American companies are helping Rwanda meet its power needs as it pursues an “all-of-the-above” strategy of hydro, mini-hydro, methane, peat, thermal, solar, and other renewables.
For example, one U.S. company, CountourGlobal, is paving the way to harness Rwanda’s unique methane concentrations in Lake Kivu. I had the pleasure of visiting the company’s innovative “KivuWatt” project on Lake Kivu earlier this year, and I am pleased that KivuWatt has started electricity production and final testing is almost complete. Full production should begin in the coming days on the initial Phase One 25 Megawatt project.
I am also pleased that the Rwandan government gave Cabinet approval on October 14 to U.S. firm Symbion Power’s 50 megawatt concession on Lake Kivu.
Yet another innovative example is Power Africa partner Gigawatt Global, which launched East Africa’s first ever utility-scale solar energy facility in September 2014. The $24 million, 8.5 Megawatt project added up to 6 percent generation capacity to Rwanda’s grid, enough to power 15,000 homes.
As an example of the creative partnerships Power Africa can help bring together, the Gigawatt Global solar field received $400,000 in grant financing under the U.S. -Africa Clean Energy Finance Initiative (ACEF)—a part of Power Africa that is a collaboration among the U.S. Department of State, the U.S. Trade and Development Agency (USTDA), and the Overseas Private Investment Corporation (OPIC). The company guided the project from signing of the Power Purchase Agreement to completion in only 12 months, a very impressive accomplishment.
U.S. firms are also driving investment in the mini-hydro sector. American companies DC HydroPower and Amahoro Energy are working to develop new projects under Power Africa.
Adding together Lake Kivu, mini-hydro, and other projects in the pipeline, U.S.-led investment in the energy sector is projected to bring 158 megawatts of new power online in the coming years.
Rwanda also recognizes that in order to meet its power needs the country must think regionally. Power Africa is supporting Rwanda’s drive to not only import electricity from countries such as Kenya and Ethiopia but to also serve as a regional trade hub to wheel electricity to neighboring counties such as Burundi and the eastern Democratic Republic of the Congo.
Recognizing that Power Africa cannot achieve energy access goals through the use of imports and large grid extension projects alone, the U.S. government launched Beyond the Grid, a new Power Africa sub-initiative focused exclusively on unlocking investment and growth for off-grid and small-scale energy solutions on the African continent.
This initiative fits well here in Rwanda where many households are located far from the existing electrical grid and where few can afford the high grid connection fees and tariffs. For many of these Rwandans, it is more economical to access electricity through off-grid energy solutions or distributed stand-alone mini-grids.
Rwandans themselves are on the front lines of developing innovative solutions in this off-grid space. For example, on October 2, the African Diaspora Marketplace gave an award to Rwanda-based African Renewable Energy Distributor (ARED) for the company’s innovative solar kiosks that can charge up to 30 phones at one time. The company now has 24 kiosks operating throughout Rwanda and hopes to extend to other African countries.
I am also excited that the U.S.-Africa Development Foundation included Rwanda for the first time this year in the foundation’s “off grid challenge.” We look forward to announcing the winners for Rwandan later this year.
Scaling-up these types of innovative and renewable power technologies is also critical to helping Rwanda prepare and adapt to the challenges of climate change. But in order for innovative ideas to turn into concrete businesses, it is critical that entrepreneurs find support, not obstacles, from governments.
Entrepreneurs and investors alike are looking across the globe and across Africa to evaluate the risk of their investments. While Rwanda is ranked #2 in sub-Saharan Africa in the 2016 Doing Business rankings that were just released, more reforms are needed on investor aftercare issues to attract additional private investment.
It is vitally important that investment deals are brokered with all relevant government actors in the room, including the Rwanda Development Board, Rwanda Revenue Authority, Ministry of Infrastructure, and others. Investors must have certainty that any agreement will be honored by all Rwandan agencies, especially the tax, regulatory and immigration authorities.
Establishing the enabling environment and policy reforms for further investment in the energy and infrastructure sectors is critical for Rwanda to reach its development goals. And here, too, Power Africa stands as a full partner with Rwanda. Next week, the U.S. Commerce Department and MININFRA will co-host a conference on the challenges and solutions to financing power projects in Africa. The conference will bring together experts on credit and finance along with officials from nine countries across Africa. The goal is to share best practices and develop specific recommendations for governments on mobilizing foreign investment and attracting credit and financing to close energy deals.
Whether through developing possible credit tools or sharing best practices for Power Purchase Agreements (PPA), Power Africa serves as a partner in helping Rwanda pursue the necessary reforms needed to attract further private investment.
Behind each new grid connection lies an entrepreneur who is using her laptop to develop a business plan, a student using a simple light bulb to complete a homework assignment at night, or a business that needs reliable electricity to export its products. Working together, we can help transform millions of lives here in Rwanda and across Africa.