Cultivating environmentally friendly conditions for development – Clean energy for Rwanda

Jul 13, 2017

Set up and funded by German Development Bank KfW on behalf of the German Ministry for Economic Cooperation and Development (BMZ), rAREH (responsAbility Renewable Energy Holding) – a project development and financing company for energy projects – is building a 2.7 MW hydropower station in Rwanda. 

Ambassador Dr. Peter Woeste, Hon. James Musoni - Minister for Infrastructure, and US Ambassador Erica Barks-Ruggles Enlarge image Ambassador Dr. Peter Woeste, Hon. James Musoni - Minister for Infrastructure, and US Ambassador Erica Barks-Ruggles (© rAREH / Joseph Naganga)

The Rwanza run-of-river hydropower station is located on the Mukungwa River in northern Rwanda and due to be ready for operation by the end of 2018. For the purposes of this project, KfW invested around USD 27 million and worked in cooperation with the Swiss asset manager responsAbility to set up a private-public company that will (co-) develop, (co-) finance and construct renewable energy plants in sub-Saharan Africa on a transnational basis. The two private and public partners are able to draw on their respective strengths. The fund is open to all investors.

"Energy is an essential prerequisite for the development, formation and use of media by broad sectors of the population. The hydropower station is a step in the right direction, addressing the two major challenges that face Africa: securing a sufficient supply of energy while also drastically reducing CO2 emissions in light of climate change," explained Dr Norbert Kloppenburg, member of the Executive Board of KfW Group.

The innovative financing solution uses private funds and expertise to develop and implement the project. At the same time, it offers investors an appropriate return considering the risk. This project supports the Rwandan government's goal of providing stable access to electricity for 70 percent of the country's population by 2018 (currently 35 percent).

The Republic of Rwanda currently has one of the lowest levels of energy consumption per capita in the whole of East Africa. Once operations have launched, the power station will provide 20 GWh or 2 percent of the electricity produced in the country. This is equivalent to the annual electricity consumption of 20,000 Rwandan households.

The Rwanza hydropower station has been in planning since 2013, though had lacked the funds needed to move further. rAREH has been involved in the project since mid-2014, working with the local developer DC Hydropower (supported by the US-based Power Africa Initiative) and the Danish company Frontier Investment Management.

© KFW

Hydropower plant in Rwanda

KfW-Zentrale in Frankfurt

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German Development Bank (KfW)

Headquarter of the KfW Bank

KfW Bankengruppe gives impetus to economic, social and ecological development worldwide. As a promotional bank under the ownership of the Federal Republic of Germany and its federal states, it carries out Germany's financial cooperation with developing countries on behalf of the German Government. Its goal is to combat poverty, secure peace, protect the environment and climate, and make globalisation fair.