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Rwanda government signs deal on peat-to-power project

KIGALI Rwanda (Xinhua) -- Rwanda  on Wednesday signed a 350-million-U.S.-dollar contract with local and international financial institutions to fund construction of its peat-to-power project as part of its drive to increase energy access.

The deal, which is expected to add 80 megawatts (MW) to the national grid, will help address the country’s constant power shortages, according to the ministry of infrastructure.

The power plant will be the second in the country when it starts production by the target date of 2019. The first peat plant is expected to be completed this year with 15-MW capacity.

Yumn Ltd, a Turkey-based investment company, signed an agreement to construct the peat fired energy plant in Akanyaru marshland, Gisagara district, Eastern Province.

According to the power purchase agreement, the Turkish firm will operate the plant for 26 years upon completion, and then transfer it to the government of Rwanda.

A consortium of financial companies that will inject funds towards the construction include Preferential Trade Association-PTA bank, Africa Finance Corporation, Finnfund-Finland’s development finance company, Development Bank of Rwanda, African Export-Import Bank (Afreximbank) and Export-Import Bank of India (EXIM Bank).

Speaking to reporters after the signing of the agreement, James Musoni, Rwanda minister of infrastructure, said that the power plant will boost energy access across the country and facilitate enhancement of power generation for industrial development.

“The peat project comes as another commendable step towards achieving our economic goals as replicated in our development strategies. Our country has made a commitment to this investment plan because we recognize that energy is the engine of our growth,” he added.

Rwanda has set an ambitious target to increase installed electricity generation capacity to 563 MW within the next two years, which requires investments of 3 billion dollars in the energy sector.

Currently, the country’s energy production capacity is about 161 MW, up from 50 MW seen in 2008.

In May this year, Rwanda unveiled a mega methane gas power plant—the Kivu-Watt Gas Power project, which is expected to produce 100 MW of electricity from Lake Kivu, the world’s only methane-rich water body.

The country is set to import 30 MW from Kenya on a five-year arrangement expected to start later this year. Rwanda also plans to import 400 MW of power from Ethiopia by 2018.

In February last year, the small central African nation unveiled 23.7 million dollars solar power plant, the first of its kind in the region and the third in Africa after those in South Africa and Mauritius.

The utility power located in Rwamagana district, eastern province, which was developed by the Netherlands-based company Gigawatt Global, adds 8.5 MW to the national grid.



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