Rwanda’s Ministry of Finance and Economic Planning (MINECOFIN) has signed an agreement worth US $124.8m with the World Bank to accelerate electricity access in the country.
The government is currently targeting 70% of Rwandans by the end of next year and a 100% in the next 7years. As a result, the energy sector is in need of more investments inorder to to contribute to the attainment of the same.
Ministry officials have said that it is through investments like this that the government will be able to deliver its promises. Furthermore, the loan agreement will significantly contribute to accelerating electricity rollout.
The country wants to raise the generation capacity from the current 213MW to 563MW to achieve universal access to affordable electricity within the next seven years.
Nearly 41% of households can access the grid. However, the remaining 60% need more resources in order to connect. This is according to Germaine Kamayirese, the minister of state in charge of energy, water and sanitation.
The US $124.8m deal is the first programmatic Energy Sector Development Policy (DPO) financing agreement. It is part of a three-year DPO series worth US $325m. The amount is also a continuation of the World Bank’s current financing in the energy sector.
Also read:Rwanda Enjoys increased electricity connections
World Bank’s continued support
Yasser El-Gammal, the World Bank Rwanda country manager, said that Rwanda’s ambitious plans toward energy sector have attracted the attention of the bank. He further added that the financing agreement is part of the bank’s commitment to continue supporting the country.
The money disbursed within this month will contribute to improving the operational efficiency, affordability, and accountability of electricity.
The concessional loan has a maturity of 38 years with a grace period of six years. It also has an interest rate of 0.75%. This first DPO will be followed by two other series, each worth $100 million.
