GVEP has just signed an agreement with OFID (OPEC Fund for International Development) for a grant of almost US$500,000, which will be used to co-finance a 3MW hydropower plant near the rural village of Nyundo in northern Rwanda.
This project is part of GVEP’s ESME programme, which supports energy SMEs in Sub-Saharan Africa. In Rwanda, one focus is to allow capital subsidies to private independent power producers. Small-hydro projects are assisted by providing part of the capital requirements of the projects, enabling the leveraging of funds from banks and investors. The grant will help the project in the pre-investment phase to complete the feasibility study and reach financial closure more quickly as part of the financing is in place.
The Nyundo project aims to increase in national power generation capacity in rural Rwanda through the construction of a 3MW run-of-river hydropower connected to the grid which is currently being extended in the Shira valley. The 3MW project corresponds to an increase of almost 4% in national power supply, which is urgently needed in Rwanda due to the progressing expansion of the grid into rural areas and economic growth. In 2009, the grid supplied 175,000 connections with 245 GWh of available capacity. The Nyundo project would add an additional 18.5 GWh per year, equivalent to the power consumption of a further 13,000 households in Rwanda.
GVEP has already engaged with the company Amahoro Energy in the framework of the ESME Project. The company has experience in hydropower after building the 400kW Musarara power plant in close proximity to the Nyundo project. GVEP will provide technical, financing advisory support to Amahoro Energy through our offices in Kigali and Nairobi, drawing on the 40 energy and finance experts we have in the region.
During the OFID meeting in June, 13 loans and 7 grants were approved summing up to nearly US$66 million to boost socio-economic development in over 34 partner countries.
