The African Development Bank (AfDB) has approved a loan of $266m in order to support Rwanda’s electricity expansion project.
The project aims to improve electricity supply reliability and expand access to electricity as part of a drive to transform the country into an export-oriented economy.
AfDB board members have approved the loan, which will be specifically channelled to the Scaling Up Electricity Access Program (SEAP II) in the Eastern African country.
The SEAP II loan forms part of AfDB’s ten-year strategy (2013 – 2022) and current Country Strategy Paper for Rwanda.
AfDB Power, Energy, Climate Change and Green Growth vice-president Amadou Hott said: “The approved programme will support the Government to add over 193,000 new on-grid and over 124,000 off-grid connections.”
The approved loan will be split into a $192m African Development Bank loan and a credit of $74m from the African Development Fund. The loan will be used to improve electricity supply, as well as enhance on-grid and off-grid access to renewable energy for households and commercial usage.
Funding will be extended to the Energy Development and Energy Utility subsidiaries of Rwanda Energy Group Limited, the government-owned utility which manages and operates the country’s energy infrastructure.
The funding will be used for the construction of 795km of medium voltage and 7,317km of low voltage lines, which is expected to boost the nationwide connectivity and lighting up previously unserved communities.
The project will see reductions of time and frequency of service interruption to customers and network losses and will ultimately contribute to ensuring the financial sustainability of the sector.
In 2013, Rwanda received Bank investment of $46m for the first phase of the programme, using investment-lending financing, which is now 90% complete and ahead of schedule.