Energy is the heartbeat of any country’s economic transformation and development. Its availability, volume, cost and ease in access is critical in determining whether the economy will grow or stagnate.
The African continent is in dire need of turning its industrialisation around, through embarking on value addition efforts products such that it exports finished goods, as opposed to exporting raw materials if it has a chance of achieving meaningful development.
According to the Economist Intelligence Unit, Africa accounted for more than 3 per cent of global manufacturing output in the 1970’s but this percentage has since halved, which points to the urgency African countries need to work with to catch up with the rest of the world.
The energy resource will play a key role as countries embark on this robust industrialisation agenda, however how African countries package and offer the energy services to the investors will go along way to be an important factor in realizing this goal.
In order to transition from developing country to a middle-income country, the government of Rwanda is targeting 100 per cent electricity access by 2024. It currently has 221.1 MW of installed generation capacity, with a national electrification rate of 51 per cent (37% grid; 14% off- grid), according to REG as of February 2019.
Effective January 1, 2019 REG started offering free electricity connections for its industrial clients, in a move that is aligned to the ease of doing business agenda that the government has been pursuing.
The cost for new connections stands at 40 million Rwf per kilometer including transformer and for those who may set up industries in a considerably longer distances had to top up 30 million Rwf per each kilometer.
According to Ron Weiss, the CEO of REG, the waiver comes to relieve investors who have to incur multiple costs like building the factory, hiring employees, which taking this off their shoulders would make investing in Rwanda easier.
“If we can help them with the electricity, I think it can support them a lot and at the end it will enable them to do business. It is a big challenge but I am sure we will succeed,” he said.
He said REG has been performing well over the last two years, moving from 119th positions in the year 2017 to 68th last year in the energy sector in the World Bank’s doing business report released early in October 2018.
The energy sector was one of major contributors to the country’s improvement having improved 12 places from 41st to 29th positions globally in doing business over the same period.
“We want to continue to improve and we are doing several reforms to be able to offer big clients better services in order to bring more industries here to have more big clients and to increase the development of the country,” Weiss said.
The condition for companies that wish to get free connections is to apply online, on this link. www.reg.rw/customer-
“The online application will allow us to monitor better when was the application and how much time it took us. With letters it is very difficult but online the information is much quicker” he noted.
Size of electricity required In electricity volume, the CEO said it should be above 100KVA.
“These are usually customers we connect with a transformer allocated only for them, these are what we call industrial customers,”
Over the past year REG managed to connect over 242,000 new customers (155,000 on-grid and 87,000 off-grid), the generation grew to over 221.1MW, the system has also been stabilised.
REG focus on better services, if you ask their clients, they are very happy on the response time, if a customer calls them and tells them about having a problem, they respond very quickly and for the big clients they need to give a specific service.
The energy body is optimistic that the number of industrial clients will increase as a result of this waiver; REG has been receiving over 50 such big clients per year.
The industrial sector in Rwanda is still small but quite competitive, the players are primarily engaged in production and/or processing of wood, tobacco, cement, textiles, agricultural products, small scale beverages, soap, furniture, shoes, plastic goods, tea and coffee, among others.
Rwanda’s economy grew by 7.7 per cent in the third quarter of 2018, buoyed by strong performance in the service and industry sectors, according to the National Institute of Statistics of Rwanda (NISR), which puts the economy on track to achieve the projected annual growth rate of 7.2 per cent.
Rwanda is fully invested in growing its industrial sector, and the energy sector will be a key driver in achieving this.
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