Rwanda - Scaling Up Energy Access Project - Appraisal Report · distribution and installation of...
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AFRICAN DEVELOPMENT FUND PROJECT : SCALING UP ENERGY ACCESS PROJECT COUNTRY : RWANDA APPRAISAL REPORT ONEC DEPARTMENT June 2013 Appraisal Team Regional Director : Mr. G. NEGATU, Director, EARC Sector Director : Mrs. H. CHEIKHROUHOU, Director, ONEC Division Manager: Mr. E. NEGASH, Division manager, ONEC.2 Team Leader : Mr. A. WUBESHET, Chief Power Engineer, ONEC.2
Transcript of Rwanda - Scaling Up Energy Access Project - Appraisal Report · distribution and installation of...
AFRICAN DEVELOPMENT FUND
PROJECT : SCALING UP ENERGY ACCESS PROJECT
COUNTRY : RWANDA
APPRAISAL REPORT
ONEC DEPARTMENT
June 2013
Appraisal Team
Regional Director : Mr. G. NEGATU, Director, EARC
Sector Director : Mrs. H. CHEIKHROUHOU, Director, ONEC
Division Manager: Mr. E. NEGASH, Division manager, ONEC.2
Team Leader : Mr. A. WUBESHET, Chief Power Engineer, ONEC.2
TABLE OF CONTENTS
I. STRATEGIC THRUST AND RATIONALE ............................................................................................................. 1
1.1 PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES .............................. 1
1.2 RATIONALE FOR BANK’S INVOLVEMENT ..................................................................... 2
1.3 DONOR COORDINATION .............................................................................................. 2
II. PROJECT DESCRIPTION .......................................................................................................................................... 3
2.1 PROJECT COMPONENTS ............................................................................................... 3
2.2 TECHNICAL SOLUTIONS ADOPTED AND ALTERNATIVES CONSIDERED ........................ 3
2.3 PROJECT TYPE ............................................................................................................. 4
2.4 PROJECT COST AND FINANCING ARRANGEMENTS ....................................................... 5
2.5 PROJECT’S TARGET AREA AND POPULATION .............................................................. 6
2.6 PARTICIPATORY APPROACH ........................................................................................ 7
2.7 BANK GROUP EXPERIENCE AND LESSONS REFLECTED IN PROJECT DESIGN ................ 7
2.8 PROJECT’S PERFORMANCE INDICATORS ...................................................................... 8
III. PROJECT FEASIBILITY............................................................................................................................................. 9
3.1 ECONOMIC AND FINANCIAL PERFORMANCE ................................................................ 9
3.2 ENVIRONMENTAL AND SOCIAL IMPACTS ................................................................... 10
IV. PROJECT IMPLEMENTATION ............................................................................................................................. 13
4.1 IMPLEMENTATION ARRANGEMENTS .......................................................................... 13
4.2 PROJECT MONITORING AND EVALUATION ................................................................. 15
4.3 GOVERNANCE ........................................................................................................... 15
4.4 SUSTAINABILITY ....................................................................................................... 16
4.5 RISK MANAGEMENT .................................................................................................. 17
4.6 KNOWLEDGE BUILDING ............................................................................................ 19
5 LEGAL FRAMEWORK ............................................................................................................................................ 19
5.1 LEGAL INSTRUMENT.................................................................................................. 19
5.2 CONDITIONS ASSOCIATED WITH BANK’S INTERVENTION .......................................... 19
5.3 COMPLIANCE WITH BANK POLICIES .......................................................................... 20
6 RECOMMENDATION .............................................................................................................................................. 20
APPENDIX I: COUNTRY’S COMPARATIVE SOCIOECONOMIC INDICATORS....................................................... I
APPENDIX II: AFDB’S ONGOING PORTFOLIO IN RWANDA ................................................................................. III
APPENDIX III: SIMILAR PROJECTS FINANCED BY THE BANK AND OTHER DEVELOPMENT
PARTNERS ........................................................................................................................................................................... IV
CURRENCY EQUIVALENTS
Exchange Rate as of March 2013
UA 1 = USD 1.51483
UA 1 = RWF 974.50
USD 1 = RWF 643.3065
Bank’s Fiscal Year
1 January – 31 December
Borrower’s (Rwanda) Fiscal Year
1 July – 30 June
Weights and Measures
m meter KOE kilogram of oil equivalent
cm centimeter = 0.01 meter kV kilovolt = 1,000 volts
mm millimeter = 0.001 meter KVA kilovolt ampere (1,000 Va)
km kilometer = 1,000 meters KW kilowatt = 1,000 watts
m² square meter GW gigawatt (1,000,000 kW or 1000 MW)
cm² square centimeter MW megawatt (1,000,000 W or 1 000 kW)
km² square kilometer = 1,000,000 m² KWh kilowatt hour (1,000 Wh)
ha hectare = 10,000 m² MWh megawatt hour (1,000 KWh)
t (t) metric tonne (1,000 kg) GWh gigawatt hour (1,000,000 KWh)
Acronyms and Abbreviations
AfDB African Development Bank LC Local costs
ADF African Development Fund LV Low voltage
Adm. Administration M&E Monitoring and evaluation
AFD Agence Française de
Développement
MINECOFI
N
Ministry of Finance and
Economic Planning
ARAP Abbreviated Resettlement
Action Plan
MININFRA Ministry of Infrastructure
BADE
A
Banque Arabe pour le
Développement de l’Afrique
MOU Minutes of understanding
BSHG Budget Support
Harmonization Group
MV Medium voltage
BTC Belgian Technical
Cooperation
MVA Megavolt-ampere
CFL Compact fluorescent lamp NBI Nile Basin Initiative
CSP Country Strategy Paper NELSAP Nile Equatorial Lakes Subsidiary
Action Plan
DPCG Development Partners NPV Net present value
Coordination Group
CPAF Country’s Common
Performance Assessment
Framework
p.a. Per annum
CTB Coopération Technique Belge PIU Project Implementation Unit
DoL Division of labor PRSP Poverty Reduction Strategy Paper
DFID Department for International
Development (UK)
RAP Resettlement Action Plan
EA Executing agency RFP Request for proposal
EARP Electricity Access Rollout
Program
RPPA Rwanda Public Procurement
Authority
EDPRS Economic Development and
Poverty Reduction Strategy
RURA Rwanda Utility Regulatory
Agency
EIRR Economic internal rate of
return
RWF Rwandan francs
ENPV Economic net present value RWFO Rwanda Field Office
ESIA Environmental and Social
Assessment
SEA Strategic Environmental
Assessment
ESMP Environmental and Social
Management Plan
SBD Standard Bidding Documents
EWSA Electricity, Water and Energy
Authority
SME Small or medium enterprise
FAPA
FC
Fund for African Private
Sector Assistance
Foreign exchange costs
SPN Specific Procurement Notice
FIRR Financial internal rate of
return
SWAp Sector-wide approach
FNPV Financial net present value SWG Sector Working Group
GDP Gross domestic product TA Technical assistance
GoR Government of Rwanda UA Units of account
GPN General Procurement Notice UN United Nations
HDI Human Development
Indicator
UNIDO United Nations Industrial
Development Organization
ICT Information and
communication technology
USD United States dollar
IMF International Monetary Fund VAT Value-added tax
IRR Internal rate of return WB World Bank
PROJECT INFORMATION SHEET
CLIENT’S INFORMATION
Borrower Republic of Rwanda
Executing agency Energy, Water and Sanitation Authority (EWSA)
FINANCIAL PLAN
Sources Description
Instrument and
amount (UA million)
Loan Grant Total
African Development
Fund (ADF)
Scaling Up Energy Access Program (initial ADF-12
allocation as in CSP 2012–2016) 10.270 8.910 19.180
Savings to be applied to the project (from previously
completed/closed projects) 1.864 0.261 2.125
Additional ADF-12 resources to be applied to the
project 3.360 2.700 6.060
Subtotal 15.494 11.871 27.365
Government of Rwanda Counterpart fund 2.596
Total financing 29.961
ADB’s KEY FINANCIAL INFORMATION
Loan/grant currency Unit of account (UA)
Commitment fee 0.50% yearly on the undisbursed portion of the loan starting 120
days after the signing of the loan agreements
Service charge 0.75% yearly on the disbursed and outstanding
Tenor 50 years
Grace period 10 years
KEY FINANCIAL AND ECONOMIC OUTCOMES
IRR NPV
Project—financial [FNPV @ 10% real (base case)] 21.5% USD 40.15 million
Project—economic [ENPV @ 12% real (base case)] 39.0% USD 143.28 million
TIMEFRAME – MAIN MILESTONES (expected)
Concept note approval 23 January 2013
Project approval 26 June 2013
Effectiveness January 2014
Last disbursement 31 August 2018
Completion August 2017
Last repayment September 2068
- i -
PROJECT SUMMARY
Project
overview
The proposed Scaling-Up Energy Access project covers the Northern and Western provinces of
Rwanda. The project will: (i) upgrade and rehabilitate two existing substations in Northern
Province, the Gifurwe substation to 10MVA capacity and the Rulindo substation (also to be
relocated) to 20MVA capacity; (ii) build about 464 km of medium voltage (MV) and 710 km of
low-voltage (LV) distribution networks in both provinces; and (iii) connect 25,438 households
and priority institutions (179 schools, 29 health centers and 25 sector administration offices) to
the grid along the constructed distribution network areas. Construction is expected to be
implemented over a period of 24 months after contract effectiveness and to be completed by
August 2017. The project’s cost is estimated at UA 29.961 million. Its beneficiaries are mainly
rural Rwandans, who will gain access to cheaper, reliable and sustainable electricity and related
improved services.
Project
outcomes
The overarching goal of the proposed project is to support the long-term and short-term
development strategy and program of the government of Rwanda (GoR). The expected outcomes
are (i) improved access to electricity for households and priority public institutions in the
proposed project area and (ii) sustained reliable electricity supply.
The project will support scaling up “inclusive and green” connections through the free
distribution and installation of “ready-boards,” which come with two sockets and one lamp
holder, targeting the most vulnerable households (around 10% of the total number of
households), and the use of compact fluorescent lamps (CFL) bulbs by each newly connected
household.
The project will ultimately improve the well-being, living conditions, and diversification of
income-generating activities of the population and contribute to promoting sustainable economic
growth and reducing poverty in Rwanda.
Needs
assessment
Lack of electricity is a key constraint hampering economic development and the improvement of
livelihoods in Rwanda. About 80% of all households rely on traditional biomass for their
cooking and heating needs, which has led to deforestation and soil erosion. The country’s
continuing high population growth also poses a significant challenge. To alleviate this situation,
the Economic Development and Poverty Reduction Strategy (EDPRS), in line with the GoR,
identified the energy sector as a key strategic sector for the development of the national
economy and accelerate poverty reduction. The GoR has set targets for 2017: (i) increasing
generation capacity from 90 MW to 1,000 MW and (ii) increasing household connections to
electricity from 110,000 (6%) to 1,451,855 (70%); with a special emphasis on connecting social
infrastructure: health facilities, schools, and administrative offices.
Bank’s
added value
The project will be an effective means by which to advance implementation of the government-
led, sector-wide approach and ongoing harmonization process in the energy sector. In addition,
the project will complement and benefit from the synergy with the Bank’s recent interventions in
the sector, specifically the interconnection of regional power grids (NELSAP Interconnection),
the Kivu-Watt methane gas power generation project and the Rusumo hydro projects. The Bank
will also be able to further consolidate its leadership role in the development of Rwanda’s
economic infrastructure, and increase its collaboration with other financing institutions and
partners that are supporting the energy sector. The provision of African Development Fund
(ADF) financing for the project will reinforce the Bank’s cooperation with and support for the
GoR’s development programs and the implementation of the pillars of the Bank’s Country
Strategy Paper (CSP) and Energy Sector Policy.
Institutional
development
and
knowledge
building
The project at hand supports Phase 2 of Rwanda’s Electricity Access Rollout Program (EARP).
The midterm evaluation of Phase 1 indicated a greater need for increased capacity building and
knowledge sharing within EWSA in general and EARP in particular. In consequence, the
technical assistance subcomponent included in the project will strengthen the institutional
capacity of: (i) the Ministry of Infrastructure (MININFRA) in the areas of energy policy and
strategy review; and (ii) EWSA and EARP to build and enhance in-house capacity in the areas
of project planning capabilities, preparation of project documents, and project implementation.
This knowledge will improve quality at entry for future energy projects. Analytical knowledge
building will also be promoted through the preparation of the Project Completion Report (PCR)
and through the Bank’s participation in joint analytical work with other development partners
supporting the GoR electricity access program.
- ii -
RESULTS-BASED LOGICAL FRAMEWORK
Country and project name: Rwanda, Scaling-Up Energy Access Project
Purpose of the project: Support to improve access to reliable and cost-effective electricity services for households and priority public
institutions
RESULTS CHAIN
PERFORMANCE INDICATORS MEANS OF
VERIFICATION
RISKS/MITIGATION
MEASURES Indicator
(including CSI) Baseline Target
IMP
AC
T
Sustainable
economic
growth;
improved
living
conditions
and well-
being of the
population,
including
freeing
women’s
time for
income
generation
opportunitie
s and
education
- Gross domestic
product (GDP)
growth
- % of population
below the poverty
level
- Increased welfare
of households
- Access to
electricity
- 7.7% in 2012
- 44.9% in 2011
HDI = 0.429 in
2001
By 2012:
- 16.5%
(330,000
households)
- Health centers
53%
- Schools 34%
- Sector adm.
offices 56%
- Within or
above 11.9%1
in 2017
- 33% in 2017
HDI = 0.466 in
2017
By 2017:
- 70% (1,451,855
households)
- Health centers
100%
- Schools 90%
- Sector adm.
offices 100%
- Human
Development
Report
- National
economic
statistics
- IMF country
review report
- Baseline survey
for electrified
zones/villages/to
wns
- Macroeconomic risk will be
mitigated by the involvement
of many donors and partners
in the development of the
country and strong
commitment of the GoR.
- East African governments
remain committed to the
regional integration and
development of the region.
- Change in level of political
support, or political risk, will
be mitigated by government
support for the EARP
program and the involvement
of the international
community in Rwanda.
OU
TC
OM
ES
Improved
access to
electricity
for
households
and priority
public
institutions
in the
proposed
project area
- Households
connected to
national electricity
grid
- Public institutions
with access to
electricity from
national grid
By 2012:
- 0
- 0 health centers
- 0 schools
- 0 sector adm.
offices
By 2017:
- 25,438 (of
which 3,446 are
women-headed
households)
and 66,910
women out of
127,190 people
- 29 health
centers
- 179 schools
- 25 sector adm.
offices
- National statistics
- Ministry of
Infrastructure and
EWSA annual
reports and
records
- Joins sector
review report of
energy sector
working group
- Bank’s energy
sector review
reports
- Project progress
reports
- Project annual
and quarterly
reports
- Project
monitoring and
post-evaluation
report
- The risk of failure to achieve
operating efficiencies will be
mitigated through
efficiencies factored into the
cost of the access program in
the form of gradual
reductions in technical losses
and operating expenses (per
unit of electricity supplied)
and gradual improvements in
collection efficiencies.
Projected improvements are
conservative and are
consistent with widely
accepted incentive-based
regulation of natural
monopolies.
- The risk posted to
EWSA/EARP’s
implementation capacity,
which is stretched due to the
sheer load of projects under
their management, will be
mitigated through an
extensive program of
capacity building; the
government will undertake
an appropriate restructuring
of the EARP office.
Sustained
reliable
electricity
supply
- System losses
- Rolling average of
monthly
interruption per km
of MV lines
By 2012:
- 19%
- 0.545
interruption/km
(based on 1,762
interruptions
per month and
3,231.4 km of
MV line)
By 2017:
- 14%
- 0.07
interruption/km
(based on 1,012
interruptions
per month and
14,450 km of
MV line)
1 Source: Draft EDPRS-2, February 2013
- iii -
RESULTS CHAIN
PERFORMANCE INDICATORS MEANS OF
VERIFICATIO
N
RISKS/MITIGATION
MEASURES Indicator (including CSI)
Baseline Target
OU
TP
UT
S
Component A
- Rehabilitation
and upgrading
of Gifurwe
110/30kV
substation
- Construction of
new 110/30 kV
Rulindo
substation
- Number of
substations
rehabilitated and
upgraded
By 2012:
- 0 MVA from
Gifurwe
substation
- 3 MVA from
Rulindo
substations
By 2017:
- Gifurwe substation
rehabilitated and
capacity upgraded to
10 MVA
- Rulindo substation
relocated and
capacity upgraded to
20 MVA
- Progress
reports from
the executing
agency and
supervision
and
management
consultant
- Executing
agency
(EWSA)
annual report
- Project
completion
report
- Supervision
mission
reports from
AfDB
- Disbursement
and financial
reports from
the executing
agency
- Number of
ESMP/ARAP
implementation
and compliance
reports
- Inadequate power supply to
meet demand due to new
connections will be
mitigated by the sufficient
supply of electricity from
new hydro and methane gas
sources that have already
begun construction;
assistance provided to the
public utility for domestic
energy resource
development; completion
of cross-border power
interconnections (NELSAP
project for five NBI
countries); and
implementation of energy
efficiency program through
use of compact fluorescent
lamp (CFL) bulbs for new
customers.
- Risk of completion delay
and cost overruns will be
mitigated by the hiring of
experienced and reputable
contractors on the basis of
turnkey, fixed-price, and
time-certain contracts as
well as the involvement of
the supervision consultant
to augment project staff as
needed in order to ensure
delivery efficiency
(Component C).
- Operation (both technical
and financial) and
maintenance risks will be
mitigated by the technical
assistance subcomponent
to be provided to the staff
of EWSA/EARP
(Component C).
- The risk of delay and
unsatisfactory completion
of ESMP/ARAP due to
inadequate number of
skilled staff will be
mitigated by recruiting
additional safeguard staff
through the Bank’s
financing.
Component B
MV line and LV
distribution
network
construction for
access scale-up
- Km of 30 kV
distribution lines
- Km of 0.4 kV
low voltage
network
- Number of direct
jobs created
during
construction
By 2012:
0
0
N/A
By 2017:
- 464 km of 30 kV
lines constructed
- 710 km of 0.4 kV
network constructed
- 800 (600 semi/low-
skilled), of which 120
will go to women
(15%)
Component C
- Project
supervision and
management
- Technical
assistance for
institutional
capacity
strengthening
- Project audit
- Number of
reports
- Number of staff
trained
- Time to complete
audit report
(months)
N/A
N/A
Six months in
2012
- 4 progress reports per
year prepared by the
supervision and
management
consultant
- 20 staffs from
MININFRA, EWSA
and EARP trained by
end of 2016
- One audit report each
year, completed in
less than six months
Component D
Execution of the
ESMP and
Abbreviated
Resettlement
Action Plan
(ARAP)
- Number of
people
compensated and
resettled
- Number of
HIV/AIDS
awareness and
prevention
sessions
N/A
N/A
- 100% compensation
and resettlement plan
executed
- 4 progress
reports/year prepared
by the supervision
and management
consultant until
complete
implementation of
ESMP & ARAP
- 100% of contractor
workers sensitized
about HIV/AIDS
prevention.
KE
Y A
CT
IVIT
IES
COMPONENTS INPUTS
A. Upgrading and rehabilitation of substations
B. Access scale-up
C. Project administration and management
D. Implementation ESMP and ARAP
A. UA 4.644 million
B. UA 20.408 million
C. UA 3.489 million
D. UA 1.420 million
Total cost: UA 29.961 million
- iv -
PROJECT IMPLEMENTATION SCHEDULE
Major
Activities
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- 1 -
REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD
OF DIRECTORS ON PROPOSED FINANCING TO RWANDA FOR SCALING-UP
ENERGY ACCESS PROJECT
Management submits the following report and recommendations on a proposed ADF loan for
UA 15.494 million and ADF grant for UA 11.871 million to finance the Scaling-Up Energy
Access project in Rwanda.
I. STRATEGIC THRUST AND RATIONALE
1.1 Project Linkages with Country Strategy and Objectives
1.1.1 The Bank’s Country Strategy Paper (CSP) for Rwanda (2012–2016) seeks to support
two strategic pillars: (i) infrastructure development through interventions to address the
country’s energy and transport bottlenecks, and (ii) enterprise and institutional capacity
development by supporting institutions that implement Rwanda’s policy on small and medium
enterprises (SMEs). The GoR’s long-term development strategy (Vision 2020) and medium-
term Economic Development and Poverty Reduction Strategy (EDPRS) focus on rapidly
expanding access to electricity as the key means to achieving the country’s vision of rescuing
itself from poverty. This will alleviate infrastructure bottlenecks in urban areas and improve
limited access in rural areas.
1.1.2 Rwanda has been moving towards a liberalized energy market ruled by an independent
regulator. The country has formulated clear objectives for the development of the energy
sector: (i) increase access to energy; (ii) introduce cost-reflective tariffs and revision of tariff
structure; (iii) diversify energy sources and ensure energy security; and (iv) establish a
favorable institutional, legal, and regulatory framework and build local capacity. Energy
prices have been increasingly adjusted towards a cost-reflective tariff, most recently by 20%
in 2012. A revision of the energy subsidy system is currently under way, which is in turn
expected to lead to a revision of the current generation-based subsidies in favor of income-
based consumption subsidies.
1.1.3 The proposed Scaling-Up Energy Access Project is a direct response to one of the
three flagship programs called for in the EDPRS-1—“economic transformation to create
employment and generate exports”—and responds to its key priority, rapidly expanding
access to electricity. The EDPRS-2 is designed to accelerate the progress already achieved
through the EDPRS-1 and will sustain a focus on infrastructure development for economic
transformation. Moreover, the project will contribute to the revised GoR target for the
electricity sector to reach an access ratio of 70% by 2017. The project is also consistent with
the Bank’s energy sector policy approved in October 2012, as well as with the joint
AfDB/Government of Rwanda Energy Sector Review and Action Plan (2012), whose core
principle is “ensuring energy security and increasing access for all.”
1.1.4 The CSP is in line with the country’s long-term development strategy (Vision 2020),
which targets increase in access to electricity by households, and its medium-term EDPRS-1
(2008-2012) and EDPRS-2 (2013-2018) plan, in which energy is a key strategic sector.
Increasing energy access is a basic requirement for the development of the national economy,
which in turn is a prerequisite for the acceleration of poverty reduction.
- 2 -
1.2 Rationale for Bank’s Involvement
1.2.1 Lack of electricity is a key constraint hampering economic development and
livelihood improvement in Rwanda. To alleviate this situation, the GoR has given priority of
investment to infrastructure development, particularly in the energy sector. The Bank has
indicated its willingness to support the sector in line with its CSP for Rwanda and the GoR’s
policy on division of labor among different financing institutions and partners. The proposed
project, is thus in line with both the GoR’s development strategy and the Bank’s operational
strategy in Rwanda, as articulated in the CSP and the Bank’s energy sector policy.
1.2.2 The Bank’s intervention under the proposed project is part of the broader program of
electricity rollout in Rwanda, which among other goals aims to contribute to a reduction in the
cost of doing business, improve competitiveness, spur economic growth and transformation,
and catalyze the achievement of Rwanda’s Vision 2020 goal of becoming a middle-income
country. The project will provide effective means to advance implementation of the
government-led, sector-wide approach and ongoing harmonization process in the electricity
sector. In addition, the project will complement and benefit from the synergy with the Bank’s
recent interventions in the sector, specifically the interconnection of regional power grids
(NELSAP Interconnection Project), the Kivu-Watt methane gas power generation project and
the Rusumo hydro projects. The Bank will also benefit from further consolidating its
leadership role in the development of Rwanda’s economic infrastructure, and increase its
collaboration with other financing institutions and partners that are supporting the electricity
sector.
1.2.3 In light of the above, the GoR officially requested that the Bank consider financing
this important energy access project.
1.3 Donor Coordination
1.3.1 The GoR has an aid policy that focuses on a sector-wide approach (SWAp). The
arching objective is well known: to increase aid effectiveness by reducing fragmentation of
donors flows to the energy sector. The GoR, in view of the recent policy on division of labor,
has asked each donor to actively participate in only three sectors to comply with the Paris
Declaration and the Accra Agenda for Action. In line with the aid policy, the government has
asked the Bank to focus its future operations in Rwanda in the following three sectors: (i)
energy, (ii) transport (including ICT), and (iii) water and sanitation, as well as some
crosscutting areas such as economic governance and private-sector development. The key
development partners supporting the energy sector in Rwanda are the World Bank, AfDB,
Arab Bank for Economic Development in Africa (BADEA), UNIDO, Coopération Technique
Belge (CTB), the Netherlands, France, and Japanese International Cooperation Agency
(JICA). The Bank collaborates with other development partners through the Budget Support
Harmonization Group (BSHG), which provides a platform for members to coordinate high-
level policy dialogue on broad economic management/governance with the government, and
the Development Partners Coordination Group (DPCG), which coordinates thematic
subgroups through various sector working groups (SWGs).
1.3.2 According to the MINECOFIN Review 2012, the introduction of SWAps to energy
has had a positive impact on coordination, harmonization and alignment as well as
strengthening of the sector strategic dialogue compared to the non-SWAp sectors. The review
also notes that there is need to sustain and improve coordination among the various
stakeholders in order to enhance their ownership of the process.
- 3 -
1.3.3 The project will provide effective means by which to advance implementation of the
government-led SWAp and ongoing donor harmonization process in the electricity sector.
II. PROJECT DESCRIPTION
The project’s development objectives are to support “improvement of access to reliable and
cost effective electricity services for households and priority public institutions and sustain
the reliability of electricity supply in Rwanda and strengthen the institutional capacity of
key sector players in the project.”
2.1 Project Components
The project has four main components: (A) upgrading and rehabilitation of substations,
(B) access scale-up, (C) consultancy services and technical assistance, and (D) the
Environmental and Social Management Plan (ESMP) and Abbreviated Resettlement Action
Plan (ARAP).
Table 2.1
Project components
N° Component name
Estimated
cost
(UA million)
Component description
A)
Upgrading and
rehabilitation of
substations
4.644
Rehabilitation and upgrading of 110/30 kV Gifurwe
substation
Upgrading and relocation of 110/30 kV Rulindo substations
to new site
B) Access scale-up 20.408
Construction of 464 km of MV distribution lines, 710 km of
LV network, and connection to 25,438 households, and
prioritized sector connection (health centers, schools and
sector administration offices)
C) Project administration and management
C1) Consultancy
services for
project
supervision and
management
1.622 Review and update of design and bidding documents,
supervision of construction, and supervision of the
implementation of ARAP
C2) Technical
assistance and
capacity-building
1.120
Technical assistance to EARP, EWSA and MININFRA
Training for EARP, EWSA and MININFRA to strengthen
institutional investment planning, technical, operational,
finance and support services functions
Electricity danger sensitization program for newly connected
households
C3) Audit 0.020 Annual audit service for the project account
C4) Project
administration 0.727
The project team will be reinforced through recruitment of
additional staff (engineers, an accountant, a procurement
specialist, an environmentalist and a social expert).
D) Environmental and
social management 1.420 Implementation of ESMP and ARAP
2.2 Technical Solutions Adopted and Alternatives Considered
2.2.1 In regard to the access scale-up component, the plan is to expand the national grid
through construction of MV and LV distribution networks. The best off-grid option for
decentralized electrification (diesel, micro hydro, or solar photovoltaic) was compared with
the national grid expansion option. Small-scale generation (stand-alone mini-grids) requires
- 4 -
longer implementation time, and the cost is higher than for national grid expansion. The diesel
generator mini-grid option is not in line with the high-level government objective of
“improvement of access to reliable and cost-effective electricity services for households and
priority public institutions and sustain the reliability of electricity supply in Rwanda” and
will not make electricity more affordable for customers.
2.2.2 Concerning the substations component, the chosen solution is that of rehabilitation and
upgrading. The option of instead relying on existing capacity was considered and rejected,
that would have jeopardized the government’s targets to meet the target of 70% access by
2017; the Gifurwe substation has not been functional since 1994 due to damage to power
transformers and Rulindo substation’s capacity is almost saturated, meaning new customers
could not be connected. In addition, existing customers connected via these substations
continue to suffer from voltage drop, and the executing agency will not able to improve the
power losses and in turn its financial situation without new capacity.
Table 2.2:
Project alternatives considered and reasons for rejection
Alternative Brief description Reason for rejection
Component A
“Substations”
No rehabilitation
and upgrading of
Gifurwe substation
Continue supplying
existing customers in
Gifurwe area from
the more remote
substations and
generation plant.
No additional
connection of
customers on the
existing MV and LV
networks.
Without upgrading and rehabilitation of this substation,
targeted electricity access improvements in the area
cannot be achieved
Existing customers will continue to suffer from voltage
drop and fluctuation because of very far-off supply
points.
Existing customers would not be able to develop further
economic activities that require additional power supply.
Relying on existing capacity cannot improve power losses
and reliability of supply.
Component A
“Substations”
No upgrading or
relocation of
Rulindo substation
No additional
connection of
customers on the
existing MV and LV
networks.
Continue the
operation of the
substation at its
current location.
The existing substation is in a swampy area that puts its
operation at risk.
Relying on existing capacity cannot support the country’s
electricity access program or improve power losses and
reliability of supply.
New extension of the MV and LV networks and
connection to households would not be possible because
of capacity saturation of this substation.
Existing customers would not be able to develop further
economic activities that require additional power supply.
Component B
“Access Scale-Up”
Off-grid, mini-grid
solutions
Sizable off-grid
micro hydro
development or diesel
generators to provide
power to rural
villages and towns.
Renewable off-grid
installations.
There is a limited availability of hydro sites in the project
areas. Consequences would include higher investment
cost for construction and longer implementation time.
The use of diesel generators would lead to increased
electricity costs and negative CO2 emissions.
Renewable off-grid solutions have not been proven to be
cost-efficient within Phase 1 of EARP. Costs are higher
compared to grid connection, severe capacity and
electricity storage constrains limit the benefits of
electrification, particularly for health centers. In addition,
maintenance poses a severe challenge, making off-grid a
rather temporary solution.
2.3 Project Type
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The proposed project is part of the GoR’s program to expand access to electricity and is a
standalone project that will be financed through a loan and grant from the ADF. The project
will extend the national grid through MV and LV networks to connect new households and
priority institutions along the constructed distribution network areas. The upgrading and
rehabilitation of Gifurwe and Rulindo substations will enhance the reliability and quality of
supply of power to distribution networks and support expansion of electricity access.
2.4 Project Cost and Financing Arrangements
2.4.1 The total project cost, including physical contingency of 8% and price contingency of
5% (excluding all taxes, duties, levies, and VAT in Rwanda), is estimated to be USD 45.384
million (UA 29.961 million), comprising foreign exchange costs of USD 35.128 (UA 23.189
million) and local costs of USD 10.256 million (UA 6.772 million). Table 2.3 presents the
foreign and local currency project cost by component.
Table 2.3:
Project cost by component
Component USD million UA million
FC LC Total FC LC Total
A) Upgrading and rehabilitation of
substations 5.447 0.778 6.226 3.596 0.514 4.110
B) Access scale-up 22.181 5.117 27.358 14.643 3.418 18.060
C) Project administration and management
C1) Project supervision and
management 1.956 0.217 2.174 1.291 0.143 1.435
C2) Technical assistance 1.502 0.000 1.502 0.992 0.000 0.992
C3) Audit 0.000 0.027 0.027 0.000 0.018 0.018
C4) Operating expenses 0.000 0.974 0.974 0.000 0.643 0.643
D) ESMP /ARAP 0.000 1.903 1.903 0.000 1.256 1.256
Total base cost 31.087 9.076 40.163 20.552 5.992 26.513
Physical contingency (8%) 2.487 0.726 3.213 1.642 0.479 2.121
Price contingency (5%) 1.554 0.454 2.008 1.026 0.300 1.326
Total project cost 35.128 10.256 45.385 23.189 6.772 29.961
2.4.2 The project will be financed by the Bank and the GoR. The sources of financing of the
project are illustrated in Table 2.4. The Bank’s financing will be used to cover 100% of the
total foreign cost and 61.7% of local costs of the project excluding all taxes, duties, levies,
and VAT in Rwanda.
Table 2.4:
Sources of financing for foreign and local costs
Component UA million % of
total Foreign costs Local costs Total
ADF 23.189 4.176 27.365 91.34%
Government of Rwanda 0.000 2.596 2.596 8.66%
Total project costs 23.189 6.772 29.961 100%
- 6 -
Table 2.5:
Project cost by category of expenditure
Category of expenditure UA million % foreign
costs Foreign costs Local costs Total
Works
Upgrading and rehabilitation of substations 4.063 0.581 4.644 87.51%
Access scale-up (six lots of MV and LV lines) 15.448 3.862 19.310 80%
Goods
Access scale-up (supply of energy meters) 1.098 0.000 1.098 100%
Services
Project supervision and management 1.460 0.162 1.622 90%
Technical assistance and capacity building 1.120 0.000 1.120 100%
Audit service 0.000 0.020 0.020 0%
Operating costs
Project administration and operating expenses 0.000 0.727 0.727 0%
Others
ESMP / ARAP 0.000 1.420 1.420 0%
Total project cost 23.189 6.772 29.961 100%
2.4.3 The financing expenditure schedule by component is provided in Table 2.6.
Table 2.6:
Expenditure schedule by component
Component Expenditure per year (UA million)
2014 2015 2016 2017 Total
A) Upgrading and rehabilitation of substations 0.000 0.929 3.019 0.697 4.644
B) Access scale-up 0.000 6.122 11.224 3.061 20.408
C) Project administration and management 0.698 0.698 1.570 0.523 3.489
D) ESMP / ARAP 0.426 0.426 0.426 0.142 1.420
Total 1.124 8.175 16.239 4.423 29.961
Cumulative 1.124 9.299 25.538 29.961
2.5 Project’s Target Area and Population
2.5.1 The key project beneficiaries will be an estimated 25,438 rural households living in
both Northern Province (Rulindo and Gicumbi districts) and Western Province (Ngororero,
Rusizi, Nyamasheke, Nyabihu and Karongi districts), representing around 127,000 people.2 In
addition, public infrastructure will be significantly improved, as the project will provide
access to modern, reliable energy to 179 schools, 29 health centers, and 25 sector
administration offices. Finally, markets, business centers, and other major consumers will be
given priority in the routing as per the program design. It is therefore expected that small-
scale businesses and the few large commercial and industrial clients located in the area will
benefit from the program.
2.5.2 According to a 2012 survey, in the Northern and Western provinces, 42.8% and 48.2%
of households, respectively, were defined as poor and 23.5% and 27.4% as extremely poor,
respectively. The main economic activity in both provinces is agriculture, with more than
47% of people living on small-scale agriculture, primarily subsistence. The main cash crops in
2 Estimated five people per household (INS).
- 7 -
both regions are coffee and tea, usually managed as cooperatives, as well as the production of
cassava, banana, and beans in the Northern Province.
2.6 Participatory Approach
2.6.1 There were intensive consultations among development partners during the
preparation of the GoR’s electricity rollout program and on the investment prospectus. The
GoR and development partners had roundtable discussions on 23 March 2009 during which
support for the rollout program was reaffirmed, and together they pledged contribution
totaling USD 228 million for the first phase of implementation (2009–2013).
2.6.2 In the framework of specific activities related to this project, consultations were
conducted with communities, affected people, civil society, and key sector and local
administrative officials during the preparation of the Strategic Environmental Assessment
(SEA), covering all activities pertaining to the second phase of EARP and finalized in
September 2012. While the consultations involved stakeholders concerned with the entire
program, the assessment covered the specific activities financed under this project. The SEA
involved different consultation techniques, such as public hearings based on occupation and
location (e.g., with farmers, sector executive secretaries, or traders) as well as focus groups
(e.g., women, youth, or the elderly). Moreover, additional consultations were conducted with
affected people in the preparation of the Abbreviated Resettlement Action Plan (ARAP)
prepared for the relocation of the Rulindo substation. At project launch, the EARP team will
inform communities about its activities and educate people about how to use electricity safely.
During implementation, the contractor will be contractually required to continue consultations
and carry out awareness activities outlined in the EARP Environmental Safety and Social
Guidelines.
2.7 Bank Group Experience and Lessons Reflected in Project Design
2.7.1 As of the end of January 2013, the Bank’s portfolio comprised 20 operations (see
Appendix II). These included 16 sovereign loans and grants and four private-sector
operations, amounting to a total commitment of UA 280.7 million. The Bank’s portfolio
distribution by sector shows that infrastructure (energy, transport, and water) accounts for
62% of the total commitments, followed by agriculture, 18%; private sector, 12%; human
development, 5%; and multi-sector, 2%. The Country Portfolio Performance Review (CPPR
of 2012) clearly demonstrated that the portfolio performance has improved from an overall
rating of 2.4 in 2011 to 2.53 in 2012. There have also been remarkable improvements in the
disbursement rate, from 18.1% in 2011 to 31.8% in 2012. There were no problematic or
potentially problematic projects as of the end of March 2013. The active sovereign portfolio
has an average age of 3.5 years with no aging projects.
2.7.2 The AfDB’s preparation and appraisal of the proposed project have incorporated
lessons learned from the Bank’s past interventions in Rwanda, as well as other development
partners’ interventions in electrification programs, particularly in the first phase of EARP.
The lessons learned from the Bank’s past intervention, as well as other development partners’
interventions, are detailed in Annex B1.
2.7.3 The lessons learned from the Bank’s past interventions mainly relate to: (i) project
readiness and quality at entry; (ii) project startup and implementation delays due to ineffective
institutional arrangements and delays in fulfilling all the conditions precedent to the loans,
grant effectiveness and the first disbursement; (iii) delays in submitting bidding documents
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and evaluation reports due to the lack of expertise of the executing agency; (iv) poor quality
and inconsistent procurement documents (bidding documents, bid evaluation report, contract
documents, etc.) prepared by the executing agencies causing delays in the issuance of no-
objection; and (v) delays in the preparation of ESIA and RAP studies by the executing
agencies. The proposed project takes these lessons into account by: (i) ensuring that the
proposed project is supported by appropriate design, feasibility, ESMP, and ARAP studies;
(ii) providing training and support to the executing agency through the technical assistance
subcomponent, (iii) ensuring strong implementation agency arrangement; and (iv)
implementing the proper procurement process.
Strong implementing agency improves results: Effective projects require strong capacity
from the implementing entity. EARP has handled several projects and the first phase of
the rollout program and will be further strengthened through appropriate staffing,
implementation arrangements, and technical assistance.
Lack of procurement capacity causes delays: A longer procurement process can be
attributed to: (i) inconsistent technical specifications, (ii) inadequate procurement staffing,
and (iii) an inadequate recordkeeping system. The proposed project will minimize such
delays through the selection of experienced consulting firms for the preparation of design,
specifications, and bidding documents. In addition, the technical assistance subcomponent
under the project will strengthen the ability of EARP in these areas, building its capacity.
2.7.4 The proposed project incorporates good international practice and experience in
several essential ways: (i) the prospectus investment program is anchored by a well-
prioritized and planned spatial least cost rollout plan, driven by the EDPRS targets and guided
by Rwanda’s multi-sectoral development priorities; (ii) the overall financing policy strikes a
measured and workable balance between affordability for beneficiaries and the limited
availability and opportunity cost of funds for investment in Rwanda, while also ensuring the
commercial viability of the EWSA and overall program sustainability; (iii) a midterm review
of EARP, conducted by an independent consultant, has evaluated the progress of key
activities and targets, with the ultimate intention to provide an impetus for adjustments that
may be required in order to keep the program relevant to the broader sectoral goal; and (iv)
the second phase of EARP is supported by a well-designed and prioritized study, taking into
account the lessons from the prospectus and the midterm review.
2.8 Project’s Performance Indicators
2.8.1 The key outcome indicators will be increased access to electricity and sustained
reliable electricity supply in the project areas. The main deliverables and outcome indicators
of the project are:
Access: (a) 25,438 households connected to national electricity and (b) 179 schools, 29
health centers, and 25 sector and cell administration offices gaining access to electricity in
the project area by constructing: (i) 464 km of MV distribution lines and (ii) 710 km of
LV networks.
Quality: Sustained reliability of electricity supply for existing and new consumers by: (i)
reducing power losses and (ii) reducing monthly average power interruption through
rehabilitation and upgrading of the Gifurwe substation to 10 MVA capacity and building a
new Rulindo substation with 20 MVA capacity.
- 9 -
In-house capacity: (i) increased number of staff trained and improved sector project
planning and design preparation, as well as improved financial management system and
procurement handling in the executing agency; and (ii) reviewed energy sector policy and
strategy.
2.8.2 Statistical reports produced by EWSA and MININFRA will verify the performance
indicators. The progress during implementation will be measured by the timely
commencement of the work, regular disbursements, consultations with the Project
Management Teams, timely submission of quarterly progress reports and implementation of
the ESMP/ARAP, and annual audit reports. After completion of the project, its effectiveness
will be assessed via monitoring of productive use of electricity in the targeted project areas,
which will be done in close cooperation with the Ministry of Agriculture and concerned
government institutions.
2.8.3 The technical assistance component will provide the EWSA/EARP with technical
support and know-how to build the in-house capacity for preparation of project planning,
feasibility study, design documents, proper financial management and procurement handling;
to MININFRA, it will provide help with the preparation and revision of energy policy and
strategy. The source of data to confirm these indicators will be time-to-time assessments of
the effectiveness of the technical assistance. This effectiveness will be monitored, after
completion of the project, through the quality of projects and documents prepared in the
future by the executing agency.
III. PROJECT FEASIBILITY
3.1 Economic and Financial Performance
3.1.1 The Bank and EARP jointly developed the project’s financial model, basing it
primarily on data from the EARP midterm review, EWSA’s corporate financial model, and
project technical feasibility studies. In order to determine the impact of the proposed
investment, the model adopts an incremental analysis, which entails comparing the “with the
project” scenario to the “without the project” scenario.
3.1.2 The results of the analysis show that the project is financially sustainable and
economically viable. Its financial internal rate of return (FIRR) is estimated at 21.5% (real)
while the financial net present value (FNPV) discounted at a real rate of 10% is USD 40.15
million. These figures were obtained on the basis of a flat electricity tariff of RWF 134.40
(exclusive of VAT) per KWh charged to residential consumers since August 2012.
3.1.3 The economic benefits of the project are computed by considering the willingness to
pay of the targeted end users. According to the data available from the EARP Socioeconomic
Baseline Study, carried out by Kabonos Consulting during the midterm review of the first
phase of EARP, the total amount spent by non-electrified households for lighting and
telephone charging is RWF 3,100 (around USD 4.91) per month. Assuming an average
consumption of 10 KWh per month for non-electrified households, their energy cost is
estimated at around RWF 310/KWh (around USD 0.491/KWh). Connecting these non-
electrified households to the grid will thus reduce energy costs from RWF 310 to RWF
134.40 per KWh. The project will yield a high economic internal rate of return (EIRR) of
39% (real) and an economic net present value (ENPV) discounted at the opportunity cost of
capital of 12% (real), estimated at USD 143.28 million.
- 10 -
3.1.4 The main financial and economic results are summarized in Table 3.1 below. The
detailed calculations and assumptions are presented in Annex B7.
Table 3.1:
Key financial and economic results
Base case
FIRR (%, real) 21.5%
FNPV (@10% real, million USD) 40.15
EIRR (%, real) 39.0%
ENPV (@12% real, million USD) 143.28
3.1.5 A sensitivity analysis was also performed against the key risk variables of the project
to test the robustness of its financial and economic cash flows. The identified key risks
include an increase in investment costs, an increase in operating costs, and a reduction in
revenues. The results of the sensitivity analysis show that the financial and economic results
are robust under adverse conditions. Details of the financial and economic analysis, as well as
the sensitivity analysis, are provided in Annex B7.
3.2 Environmental and Social Impacts
The project is classified as Category-II because it is a small-scale power development and
rural electrification project that would require the relocation of four households comprising
eight people, due to the relocation of the Rulindo substation The Strategic Environmental
Assessment (SEA), ESMP, and ARAP were compiled in September 2012, September 2010,
and January 2013, respectively. The ESMP and ARAP summaries were posted on the Bank’s
website since 2 May 2013.
3.2.1 Environment
The positive impacts of this project are numerous and wide-ranging. They include creation of
employment opportunities, improved socioeconomic status of the affected communities,
opportunity to develop sectors other than agriculture, reduced deforestation to some extent
and improvement in service delivery. Negative impacts include permanent loss of residential
and agricultural land belonging to private individuals. There will be permanent loss of crops
because the site for the new Rulindo substation is mostly farmland (growing avocadoes,
grevillea, peppers, ficus trees, eucalyptus, potatoes, and beans). It is anticipated that
construction activities, including frequent entry and movement of vehicles, will disrupt daily
living. Noise resulting from access road and substation construction may disturb neighboring
communities and local fauna. Dust will be an issue because it is recommended that
construction takes place during the dry season. Stripping, grading, soil removal, backfilling,
compacting, disposal of surplus, and surface excavation to make way for the installation of
the substations and erection of the towers will lead to localized soil erosion. Solid waste
materials during the construction will include paper wrapping, scrap metal, excavated soils,
polythene, plastic, and metal; these will cause pollution of and littering in the immediate
environment.
3.2.2 Mitigation
Mitigation of the impacts will include the engagement of a refuse handling company to
remove waste from the site to recommended disposal and recycling areas where possible.
- 11 -
Inert waste will be used for backfilling. Local authorities will be consulted in advance
regarding provision of construction schedules to the community to ensure minimum
disruptions. Heavy vehicles will make use of the existing access roads and in cases where
private roads are to be used; this will be negotiated with property owners before construction
begins. Vehicles will keep to the speed limit and avoid busy roads as far as possible.
Construction will not go on after hours or over weekends and will preferably not take place
during the harvest season. The executing agency will also ensure that affected people are
given advice and encouraged to secure other land as opposed to using their financial
compensation on non-sustainable activities such as moving to cities without clear plans for
finding employment.
3.2.3 Climate Change
3.2.3.1 As per the climate change action plan (2010), average annual rainfall may increase by
up to 20% over 1970 levels by the 2050s. As described in its Rwanda Green Growth and
Climate Resilient Strategy (2012–2017), the country follows a climate-resilient pathway,
incorporating adaptation to climate change into policy and planning. Therefore, given the risk
of flooding, the rehabilitation and construction works to be undertaken for the project must
include climate-proofing of the infrastructure. In this regard, the Rulindo substation, which
will be relocated from the marshy area where it is currently situated, must be located outside
the 1:100 year flood line.
3.2.3.2 Rwanda has one of the lowest per capita greenhouse gas (GHG) emission levels in the
world, estimated at 0.4 tCO2e/person, compared to a global average of 6.7 tCO2e/person. In
this regard, the contribution of this project to GHG is insignificant; particularly considering
that half of the power in the targeted area is hydro and that most households connected will be
using energy-efficient CFL bulbs. Moreover, the relocation of the Rulindo substation will
offset carbon emissions, as it will allow the restoration of the wetland it now sits on, which
can then act as a carbon sink. Providing electricity to Rwanda’s rural and peri-urban
population will reduce dependency on wood and fuel. The grid expansion component of this
project should also be seen as benefitting climate change.
3.2.4 Gender
3.2.4.1 It is expected that the project will benefit an estimated 66,910 women and 3,446
female-headed households living in the project area. Electricity can facilitate cooking, as it
allows for refrigeration, reduces constraints on time allocation, and cuts down on the risk of
accidents such as cuts and burns. Additionally, it reduces the burden of collecting fuel wood,
which has become an increasingly tedious task in certain areas, requiring traveling longer
distances due to forest overexploitation. However, the impact of electricity access is limited in
key ways. While electricity will replace the use of firewood used for lighting, given the lack
of a cheaper alternative it is unlikely to replace in a significant manner the use of wood for
cooking, which is currently used by more than 90% of households in both provinces.
3.2.4.2 Electrification can increase the time women can allocate to income-generating
activities as well as their probability of employment in the community’s businesses. In the
Northern and Western provinces, around 78% and 68% of women, respectively, work in
small-scale farming activities (compared to 47% and 50% of men).3 Wage-farm activities
represent the second most important source of income, employing around 12% of women in
3 EICV3—Thematic Report—Gender.
- 12 -
both provinces. Access to electricity will diversify income-generating opportunities for
women, allowing them to work in sectors not constrained by daylight hours, such as sales and
commerce, which are the dominant occupations for women outside farming.4 This in turn will
lead to greater financial independence and improved child welfare, as extra income earned by
women is likely to be invested in children.
3.2.5 Social
3.2.5.1 Improved day-to day welfare of households: Connecting households to the grid will
considerably and immediately improve their welfare via more reliable and quality lighting, as
well as an increased use of ICT. In the project area on average, only around 7.5% of
households use electricity as a source of lighting. The most important sources of lighting used
currently instead of electricity are batteries (35%), fuel lanterns (27.6%), and firewood
(11.7%). Access to the grid will not only provide a more reliable and cheaper source of
energy, but will also reduce indoor air pollution from fuels such as firewood and kerosene.
By allowing for more efficient time allocation and extended total time available, lighting will
not only free up time for productive economic activities but also for leisure, with
opportunities to listen to the radio, read, or socialize. Another important use of electricity will
be to operate radios and phones, already owned by more than 50% and 40% of households,
respectively, in both provinces. The literature points out that access to information through
ICT plays an important role in increasing knowledge about health practices and awareness of
rights and diminishing gender barriers. Moreover, EARP provides low-income households
that cannot afford their own electrical installation with “ready boards,” which include lights
and sockets, free of charge.
3.2.5.2 Improved public services: A key impact will be the improved quality of public
services, foremost among which are health and education services. The project is expected to
connect to the grid 29 health centers that currently use generators for lighting and fuel
refrigerators for vaccines. This will allow the use of electric biomedical refrigeration
equipment for laboratories and the possibility of keeping stocks of vaccines in remote areas.
Providing electricity to these health centers will also facilitate medical consultations,
surgeries, and hospitalizations (such as for childbirth) in their villages, thus reducing health
risks and costs incurred if a patient needs to be evacuated to a hospital elsewhere. On the
education front, the project is expected to electrify 129 primary and secondary schools. This
will allow for extended hours of schooling and extracurricular activities and attract more and
better-qualified teachers. Finally, 25 local administration offices will be connected to the grid,
allowing for more efficient use of time, resources, and data management.
3.2.5.3 Direct employment: Based on the current experience with distribution and similar
activities conducted to this day in Northern Province, it is expected that the project will
directly create an estimated 800 temporary jobs during construction activities, of which 600
would be unskilled to semi-skilled labor. Similar experience shows that at least 80% of the
semi-skilled and unskilled jobs will be filled by local people. It also suggests that around 15%
of jobs for locals will be filled by women, and EARP will make active efforts to sensitize the
contractor on this issue in order to increase their participation. Local capacity will also be
increased as apprentices are hired as engineers and technicians. During construction, the
project will also generate indirect employment through the use of vendors and contractors, as
well as local small-trade and restoration services.
4 Ibid.
- 13 -
3.2.5.4 Business development opportunities: The project will support the long-term
development of the private sector, particularly for small and medium agricultural businesses
(e.g. flour mills, coffee processing centers, sugarcane juice makers) prominent in the project
area. It will support the expansion of existing businesses through the use of electric machinery
and longer opening hours, as well as the development of new businesses (e.g. photocopy
shops, restaurants, and tourism-related activities). Grid electricity will lower the operational
costs of businesses that are currently using the next best alternative, such as stand-alone diesel
generators for large power usage or batteries for low power usage. Findings from the
evaluation of the first phase of EARP showed that electrification cut businesses’ energy cost
by 50% to 75%.
3.2.6 Involuntary Resettlement:
3.2.6.1 Among all project activities, the relocation of the Rulindo substation (Component A)
and the extension of the distribution network (Component B) will generate physical and
economic displacement. EARP has elaborated an Abbreviated Resettlement Action Plan
(ARAP) for the Rulindo substation and a Resettlement Framework for Component B. The
ARAP identified four households comprising eight people whose houses, trees, and crops will
be affected by the relocation of the substation.
3.2.6.2 Moreover, it is expected that the MV and LV distribution lines (Component B) will
damage additional crops and trees. Given that the exact routing of the lines will be determined
by the contractor once on board, more specifics of the RAP of each lot will have to be
developed during implementation.
IV. PROJECT IMPLEMENTATION
4.1 Implementation Arrangements
4.1.1 Institutional Arrangements: The borrower of the proposed ADF loan and grant will
be the Government of the Republic of Rwanda through its Ministry of Finance and Economic
Planning (MINECOFIN). The executing agency (EA) of the project will be EWSA. For the
purpose of implementing the national electricity access program, the GoR and EWSA have
established an EARP Implementing Unit under EWSA to facilitate project implementation
regardless of the source of funding. The EARP will report to EWSA and will bear oversight
responsibility. It will be primarily responsible for facilitating, monitoring, evaluating, and
reporting on project activities and progress.
4.1.2 In assessing the capacity of the EAs to implement the project, it is noted that EWSA
and EARP have gained technical and managerial experience through implementation of
donor-funded projects. However, as the EARP program coordinator is managing all projects
regardless of the source of funding and faces a huge burden to control, monitor, and supervise
the projects as required, further strengthening of the existing EARP implementation unit is
needed. For the proposed project, the project implementation team will be established within
the implementation unit, comprising a focal point person to manage and coordinate the project
under the supervision of the EARP program coordinator, and sufficient staff to run the
proposed project. EWSA/EARP will submit the CVs of the focal point, one environmentalist,
one procurement specialist, one social expert, two engineers, and one accountant to be
assigned to the project for the Bank’s approval. The profiles of the focal point and other staff
members are given in Annex B.3. The EARP project team will be assisted by a consultant
procured under this project, who will review and update the design and bid documents, assist
- 14 -
during the bid evaluation, review and approve the contractor’s detailed engineering design,
and supervise and monitor the project implementation, including of the ESMP. The
involvement of the consultant will reinforce the capacity of the EARP project team. EARP
will be responsible for compiling and transmitting quarterly progress reports and audit reports
to the Bank and implementing the ARAP. The implementation arrangements are detailed in
Annex B.3.
4.1.3 Procurement Arrangements: All procurement of goods, works, and acquisition of
consulting services financed by the Bank will be in accordance with the Bank’s rules and
procedures: “Rules and Procedures for the Procurement of Goods and Works” (May 2008)
and “Rules and Procedures for the Use of Consultants” (May 2008), as amended from time to
time, using the relevant Bank standard bidding documents and the provisions stipulated in the
Legal Agreement. EARP, under the supervision of EWSA, will be responsible for the
procurement of goods, works, and consultancy services. The resources, capacity and expertise
of EARP are adequate to carry out procurement. The overall project risk for procurement is
moderate. Detailed procurement arrangements are provided in Technical Annex B5.
4.1.4 Financial Management: The financial management’s system of EWSA, through its
EARP implementation unit, is considered to be adequate to carry out the budgeting
accounting and capable of recording accurate and complete transactions; delivering timely
financial reports; maintaining internal controls, funds flow management, and financial
reporting; and facilitating external auditing according to the Bank’s requirements. EARP has
proper structures in place as well as adequate staff to carry out the FM responsibilities of the
project. The annual project financial statements will be prepared in accordance with
International Public Sector Accounting Standards (IPSAs) by 30 September 2013. In addition,
the Project will provide an update on financial performance of the project as part of the
Quarterly Progress Report (QPR) as required by the Bank not later than 45 days after the end
of the quarter. EARP keeps its own books of accounts and separates the different donors’
financial statements and reporting in accordance with the IPSA’s modified cash basis of
accounting, in the context of Ministerial Order No. 002/07 of 9 February 2007 relating to
financial regulations. A supervision mission will be conducted at least twice every year based
on the risk assessment of the project. The mission’s objectives will include that of ensuring
that strong financial management systems are maintained for the project throughout its life.
Reviews will be carried out regularly to ensure that expenditures incurred by the project
remain eligible for ADF funding. The initial risk assessment is set at moderate at this stage.
A detailed assessment of the financial management is provided in Annex B.4.
4.1.5 Disbursement: The executing agency will utilize the Bank’s four disbursement
methods as prescribed in the Disbursement Handbook; the direct payment method will be the
preferred one for payments to contractors, suppliers, consultants and service providers upon
the recommendations of the implementing agency and project-authorized consultant of their
satisfactory performance. The project will operate one foreign special account into which the
proceeds of the loan and grant will be deposited and further to a local currency special
account. The executing agency will open both special accounts at the National Bank of
Rwanda. The opening of foreign and local currency special accounts will be made a condition
precedent to first disbursement of the loan and grant. A detailed assessment of the financial
management and disbursement arrangements is provided in Annex B.4.
4.1.6 Audit: The internal control system at EWSA is satisfactory. EARP has an Internal
Audit Unit and a Fraud and Investigation Unit whose duties include overseeing the activities
handled by EARP internal controls as detailed in the Financial Management Manual; this will
- 15 -
apply to the project. The auditor general is primarily responsible for the auditing of all
government projects and in line with the Paris Declaration; Rwanda’s Supreme Audit
Institution will be the auditor for the project. The auditor general will audit the project
accounts annually and at the end of the project in line with the Terms of Reference agreed
with the Bank. The audit report, complete with a management letter and management
responses, will be presented annually to the Bank within six months of the end of each fiscal
year. The annual audit will be done in accordance with International Standards on Auditing. A
detailed assessment of the audit system is provided in Annex B.6.
4.2 Project Monitoring and Evaluation
4.2.1 Monitoring of and reporting on the project implementation progress will be the
responsibility of EWSA’s project implementing unit (EARP). EARP will have the
responsibility to supply current data on the set of agreed performance indicators at least: (i) on
an annual basis for project outcome indicators, (ii) on a quarterly basis for performance
targets based on the output of each components of the project and propose corrective actions;
and (iii) on an annual basis for audit reports. These reports shall cover all aspects of project
implementation, including the status of progress against agreed implementation and
disbursement schedules for all components; implementation of environmental and social
mitigation measures; and the status of fulfillment of the loan conditions. The audit report will
be prepared by EWSA. Via the Bank’s supervision missions—at least twice a year—and
reviews of annual audit reports, the Fund will closely monitor the project implementation.
4.2.2 The Bank will undertake a midterm review of the project approximately 24 months
after the effectiveness of the loan and grant. The execution of the ESMP and ARAP will also
be monitored during all stages of the project by EARP and through the Bank’s supervision
missions. The consultant shall also prepare and submit to the implementing agency and the
Bank final commissioning reports at the completion of their assignments. Within six months
of the completion of the project, the Bank, together with the implementing agency, will
prepare and submit a Project Completion Report (PCR).
4.3 Governance
4.3.1 The financial management arrangements at EWSA and EARP are adequate to ensure
that project resources are used for only the purposes for which they were granted, with due
consideration for efficiency and economy. This project will be implemented following
Rwanda’s Public Financial Management (PFM) system to a large extent. The EWSA’s
director general will be the accounting officer, with EWSA’s Board of Directors providing
general guidance and direction to the EARP. Project operations will be guided by all existing
procedures and manuals, such as the finance manual. The project will adopt all Rwanda’s
governance and anticorruption policies and guidelines. Details on how to report and penalize
corruption are well laid out. The EARP internal audit responsibility lies with EWSA’s
Internal Audit Department, which is headed by a chief internal auditor who reports to the
Board of Directors and administratively to the director general of EWSA. The internal audit
function will play an important role in conducting regular audits for the project, as it is
currently doing. On a monthly basis, EARP accounts are also pre-audited by this directorate
before approval by the director general. The department’s reports will be shared with the
Bank as needed. External oversight will be provided by the Auditor General. The Bank will
provide some oversight, especially during supervision missions. All the anticorruption
measures that pertain to government will apply to this project. There will be at least one
value-for-money audit at midterm.
- 16 -
4.3.2 The financial management arrangements of the program implementing unit, EARP,
have been found to be adequate to provide, with reasonable assurance, accurate and timely
accounts/information on the status of the project as required by the Bank. Follow-up will be
made to ensure actions taken on the items detailed in the Financial Management Action Plan
as provided in Annex B.4.
4.4 Sustainability
4.4.1 The project is technically, economically, and financially sustainable. The
sustainability of the electricity access program rests on several key factors: (i) GoR
commitment and total alignment with the project development objective, (ii) development
partners’ commitment to the implementation of EARP, (iii) strengthening the financial
management capabilities within EWSA, the key implementing agent, (iv) near-term actions to
strengthen EWSA, including targeted capacity-building—technical, commercial, managerial
capability for operation, and maintenance of the extended network; and (v) the simplicity of
project technical design, which uses proven technologies.
4.4.2 Government commitment to the project and program. The GoR’s commitment to
EARP and to its objective is strong and is anchored by pillars and targets of the EDPRS,
Rwanda Vision 2020, and the intermediate targets in the 2015 Millennium Development
Goals (MDGs). The proposed project, which is part of the GoR electricity rollout program,
will improve access to reliable and cost-effective electricity services for households and
priority public institutions per the GoR’s commitment.
4.4.3 Development partners’ commitment to the program. The commitment of
development partners is positive and was found strong in the implementation of the first phase
of the program. In the second quarter of 2013, a stakeholder and donor roundtable meeting is
proposed to discuss the Phase 2 rollout plan to help mobilize resources to meet the national
targets that will be set in the EDPRS-2. Development partners have expressed their intent to
provide additional parallel financing to scale up Phase-2 activities of the EARP. The World
Bank approved additional financing of USD 60 million in March 2013. DFID approved an
additional funding of USD 12 million in September 2012, and discussions for funding from
BTC (EUR 17.0 million) and the Netherlands (EUR 21.0 million) are ongoing and expected
to be concluded by July 2013.
4.4.4 The executing agency financial capability and commercial viability. EWSA is a
revenue-earning entity whose financial performance is improving; it has gradually been
transitioning from a loss-making to a profitable operation. To make EWSA a self-sufficient
utility, it must be put on a path towards becoming a credible entity capable of corporate
borrowing from commercial sources (commercial banks and possibly issuance of bonds to be
sold to domestic investors). The steps on this path are: (i) within its current structure, EWSA
should ensure a transparent performance of each segment of the supply chain by separating
the financial accounts of various business units including: generation, transmission, and core
services, (ii) EWSA should be converted into a corporation that could then become an
independent (fully government-owned) company that would be legally able to borrow on its
own account; and (iii) EWSA should gradually improve its creditworthiness. To put EWSA
on this path, it is necessary to establish the performance benchmarks and the legal framework
needed for the medium-term developments.
- 17 -
4.4.5 Capacity to operate and maintain the facilities: EWSA has both the technical and
managerial capacity to operate and maintain the substations and distribution network
infrastructure. EWSA has a large pool of well-qualified personnel from which the utility can
readily replenish its manpower requirements over the project life. However, as the network
extends rapidly to meet the government’s target of access, EWSA needs further institutional
strengthening going forward to effectively and efficiently implement the ambitious EARP
targets and operate the facilities. In this regard, the capacity-building component of this
project will strengthen the technical skills necessary to implement projects and successfully
manage the energy infrastructure under the staff’s authority. Stakeholders in the energy sector
will also benefit from the technical assistance provided jointly by AfDB and the Fund for
African Private Sector Assistance (FAPA) in order to support skills development in the
energy sector and thus improve the sustainability of the built infrastructure
4.4.6 Project technical design. All the technologies applied in the project have been widely
used in other countries with similar conditions and in the region.
4.5 Risk Management
The project involves some degree of risks at implementation level and during the life of the
facilities (after project completion). The major risks and mitigation measures are discussed in
Table 4.1 below. Overall, the project risk is low to moderate.
Table 4.1:
Risk and mitigation measures
Risk Risk description Rating Mitigation
Risks at implementation level
Political risk
and
stakeholders
a) Borrower relations: (i)
The project prioritization of
the grid rollout may not be
in synchronized with the
GoR-targeted areas,
considering social-political
aspects, (ii) GoR target of
70% coverage by 2018
unlikely to be met.
b) Partner relations: There
may be a lack of
harmonization and approach
between the various
development partners
involved in the sector.
c) Interagency
cooperation: A lack of
clarity of roles and
responsibilities of the
various government agencies
may impede on the
harmonized implementation.
M a) (i) GoR has showed a continuous effort for
energy access rollout. The project fits well
with the country’s energy sector strategy and
is a high priority for the government.
(ii) EARP has carried out a grid zoning and is
based on transparent indicators for
prioritization, the most dominant one being
cost-effectiveness.
(iii) EARP is complementing with selected off-
grid installations, which will focus on socially
important institutions such as health centers
and schools wherever it is more cost-effective
than grid connection.
b) (i) Strengthen the sector working group
secretariat and the EARP project unit to take
leadership in streamlining development
partners’ support to the access scale-up
program;
(ii) Expand the program steering committee to
include other development partners
supporting the access rollout program.
c) Continue with the current implementation
arrangements, where the EARP is responsible
for implementation with guidance from
MININFRA.
Completion
delay and cost
overrun
Risk of completion delay
and/or that the cost of the
project might escalate during
implementation.
L Meticulous preparation of design and technical
specifications, as well as evaluation and
qualification requirements, should ensure
minimum variance in costs.
- 18 -
Risk Risk description Rating Mitigation
Selection of experienced and reputable
contractors through competitive bidding process
with fixed price and time bounded contracts will
minimize delays in completion.
Selection and employment of experienced
project management and supervision consultant
to augment project staff will ensure project’s
delivery efficiency.
Delay on
starting and
completion of
procurement
process
The risk associated with
delay on starting and
longtime of procurement
process due to limited
human resources in
EWSA/EARP will delay the
implementation period of the
project.
L Implementation of the advance
contracting/procurement option.
Selection of an experienced project management
and supervision consultant to prepare the design,
specifications and biding documents.
Environmental
and social
The project is classified as
environmental Category II.
There are risks to
satisfactory implementation
due to inadequate number of
skilled staff.
M The project unit capacity will be enhanced with
two additional safeguard staff, with Bank funding,
to ensure that there is sufficient capacity to ensure
close monitoring and implementation of the ESMP
and ARAP. The project team will monitor closely
during the course of project implementation to
ensure safeguard compliance.
Risks after completion of the project
Inadequate
power supply
to meet
demand
stemming
from new
connection
There is a risk associated
with rapid increase of
demand from the households
electrified in the first phase
of EARP and delay of
ongoing generation projects
and NELSAP
interconnection.
L In regards to overloading of networks, the recent
Electricity Network Planning & Design study
carried out at the end of 2012 has reviewed
supply/demand modeling based on the 10-year
load forecast to identify possible bottleneck
areas. Accordingly, the study has recommended
upgrading and extending the network.
The new hydro and methane gas power
generation projects under construction and the
NELSAP interconnection project will meet the
increased demand for electricity.
Early identification of supply constraints will
facilitate timely mitigation measures, including
additional use of rental diesel generators and
lowering the pace of additional connections for
shorter periods until supply is available.
An energy efficiency program will be
implemented through use of compact fluorescent
lamp (CFL) bulbs for new connections.
capacity and
technical risks
Risks related to the capacity
of the public utility (EWSA)
in operating and maintaining
the facilities in terms of
technical and financial
performance.
M The technical assistance and capacity building
support by the Bank under this project and also
by other development partners will strengthen
EWSA’s capacity.
Continuous human resource development on
operational and maintenance activities supported
by other development partners.
L: Low M: Moderate H: High
- 19 -
4.6 Knowledge Building
4.6.1 The contract with the project supervision and management consultant will include
specific provisions to ensure the training of EWSA/EARP staff. This knowledge transfer
mechanism, especially regarding project management and supervision, is important to build
the in-house capacity of the utility, as it will manage other similar projects to meet the
government’s targets for access to electricity. During implementation of the project, the
captured knowledge will be monitored during Bank supervision missions, in quality and time
assessments of the procurement process, and in audit reports.
4.6.2 Technical assistance activities included in the project will support EWSA/EARP
project planning, preparation of feasibility studies, and design and technical specifications.
This in-house knowledge building will enable the utility to prepare projects on time and
ensure quality at entry to development partners for future projects. This training and capacity
building component will, in the short to medium term, reduce the technical and capacity risks
that could particularly be perceived by potential private investors interested in opportunities in
Rwanda. Indeed, in order to achieve its target to provide energy access for all, Rwanda will
need to attract private-sector participation in building the generation capacity of the country.
As such, building the in-house technical capacity of the power utility in areas such as
financial management and procurement will help in improving the efficiency of EWSA and
preparing it to work with private-sector counterparts.
5 LEGAL FRAMEWORK
5.1 Legal Instrument
The legal instruments for the project are an ADF loan and ADF grant, which will be given to
the Republic of Rwanda and the proceeds of the loan and grant on-lent to EWSA on terms
acceptable to the Bank.
5.2 Conditions Associated with Bank’s Intervention
5.2.1 Conditions Precedent to Entry into Force
a) The entry into force of the Loan Agreement shall be subject to the fulfillment by the
borrower of the provisions of Section 12.01 of the General Conditions Applicable to the
African Development Fund Loan Agreements and Guarantee Agreements.
b) The Protocol of Agreement shall enter into force on the date of its signature by the Fund
and the grant recipient under Section 10.1 of the General Conditions Applicable to
Protocols of Agreement for Grants of the African Development Fund.
5.2.2 Conditions precedent to first disbursement of the ADF Loan and Grant: The first
disbursement of the loan and grant shall be subject to the borrower having:
(i) submitted evidence that a subsidiary financing agreement, with terms and conditions
acceptable to the Fund, has been executed between the borrower and EWSA for
the purpose of on-lending the proceeds of the loan and grant;
(ii) provided evidence satisfactory to the Fund of the establishment of the project
implementation team, within the existing EARP implementation unit in order to
strengthen the unit, comprising a focal point for the project, two engineers, a
- 20 -
procurement specialist, an accountant, an environmentalist, and a social expert whose
qualifications and experience shall be acceptable to the Fund (Paragraph 4.1.2 here
above);
(iii) provided evidence to the Fund of the opening of a designated special account for the
foreign currency and a designated special account for the local currency at the
National Bank of Rwanda (Paragraph 4.1.4 here above);
(iv) provided evidence to the Fund that all project-affected persons have been compensated
in accordance with the Rulindo Substation Abbreviated Resettlement Action Plan
(ARAP) (Paragraph 3.2.6.1 here above).
5.2.3 Conditions Precedent to Further Disbursements under the project component
“Access Scale-Up”
i) Submission to the Fund of a Resettlement Action Plan (RAP), full or abbreviated, as
applicable, under the Project component “Access Scale Up”, in form and substance
satisfactory to the Fund; and
ii) Submission to the Fund of proof of effective payment of PAPs according to the RAP, full
or abbreviated, as applicable, prior to the commencement of construction works on each
lot financed under the project component “Access Scale Up”. (Paragraph 3.2.6.2 here
above);
5.2.4 Undertakings
i) The borrower undertakes to implement and report to the Fund on the implementation
of the Environment and Social Management Plan (ESMP) for the Project annually and
on the implementation of the ARAPs/RAPs quarterly (Para 3.2.6 here above); and
ii) The borrower shall submit to the Fund quarterly progress reports, in a form and
substance acceptable to the Fund, on the implementation of the project.
5.3 Compliance with Bank Policies
This project complies with all applicable Bank policies. In particular, it is consistent with the
Bank’s Energy Sector Policy, approved in October 2012.
6 RECOMMENDATION
Management recommends that the Board of Directors approve the proposed ADF loan not
exceeding an amount of UA 15.494 million and ADF grant not exceeding an amount of UA
11.871 million from the resources of ADF-12 to the Republic of Rwanda for the purposes and
subject to the conditions stipulated in this report, the loan and grant agreements.
I
Appendix I: Country’s Comparative Socioeconomic Indicators5
Selected Economic and Financial Indicators, 2008–17
Est. Country
Report
No.
12/152
Proj. Country
Report
No. 12/152
2008 2009 2010 2011 2012 2012 2013 2013 2014 2015 2016 2017
Output and prices
Real GDP growth 13.4 6.2 7.2 8.3 7.7 7.7 7.5 7.6 7.2 7.0 7.0 7.0
Real GDP (per
capita)
11.1 4.0 5.0 6.0 5.5 5.5 5.3 5.4 5.0 4.8 4.8 4.8
GDP deflator 10.4 9.5 2.5 7.7 7.7 7.7 7.8 7.2 6.4 5.3 5.3 5.5
Consumer prices
(period average)
15.4 10.3 2.3 5.7 7.9 7.9 7.0 7.0 6.3 5.8 5.3 5.0
Consumer prices
(end of period)
22.3 5.7 0.2 8.3 7.5 7.5 6.5 6.5 6.0 5.5 5.0 5.0
Money and credit1
Domestic credit2 20.5 3.8 9.4 5.0 18.5 12.8 19.6 29.0 16.0 11.4 15.0 12.5
Government2 -18.1 0.2 2.4 -13.2 6.7 -5.8 3.3 16.1 -4.4 4.6 0.0 0.0
Economy2 38.6 3.6 7.0 18.2 11.8 18.6 16.3 12.9 20.5 6.8 15.0 12.5
Broad money (M2) 24.2 13.1 16.9 26.8 17.0 16.5 16.9 16.3 15.6 13.7 13.7 13.8
Reserve money 23.5 0.3 12.5 23.4 17.0 16.5 16.9 16.3 15.6 13.7 13.7 13.8
Velocity
(GDP/M2; end of
period)
5.5 5.6 5.3 4.9 4.8 4.9 4.8 4.8 4.8 4.7 4.7 4.6
National income accounts
National savings 9.1 5.1 4.1 3.1 2.2 2.8 4.1 3.3 5.3 6.9 8.1 8.8
Gross investment 23.5 22.3 21.7 22.1 23.8 23.7 23.0 23.0 21.5 20.0 19.7 19.4
Of which: private
(including public
enterprises)
13.1 12.4 10.8 9.2 9.5 9.5 9.8 9.8 10.1 10.4 10.7 11.0
Government
finance3
Total revenue
(excl. grants)
12.6 14.9 12.5 13.6 13.8 14.3 14.0 14.9 14.9 15.1 14.9 15.2
Total expenditure
and net lending
22.6 26.3 25.7 27.7 26.9 26.6 28.0 32.3 28.4 24.4 23.3 22.9
Capital expenditure 8.2 11.0 10.1 12.3 12.4 11.7 13.5 13.7 13.1 10.1 9.4 9.0
Current
expenditure
15.1 14.5 14.7 14.8 14.5 14.9 14.3 14.0 14.6 14.1 13.9 13.4
5 IMF (2013). “IMF Executive Board Concludes 2012 Article IV Consultation with Rwanda.” Public
Information Notice No. 13/30, 19 March 2013.
II
Overall fiscal
balance (payment
order)
After grants -0.2 -2.2 -0.1 -3.4 -1.9 -1.2 -2.6 -6.9 -2.9 -2.3 -1.6 -1.6
Before grants -10.0 -11.5 -13.2 -14.1 -13.2 -12.3 -14.0 -17.4 -13.5 -9.3 -8.5 -7.8
External sector
External current account balance
Including official
transfers
-4.9 -7.3 -5.9 -7.3 -10.0 -11.3 -9.7 -10.2 -9.0 -6.8 -5.9 -5.4
Excluding official
transfers
-14.4 -17.2 -17.5 -19.0 -21.5 -20.9 -19.0 -19.7 -16.3 -13.0 -11.5 -10.6
External debt (end
of period)
14.7 14.9 14.8 18.4 18.7 21.3 19.1 20.4 20.3 20.1 19.5 18.7
Net present value of external debt
(Percent of exports
of goods and
services)
… … 86.9 108.6 111.2 136.8 114.8 129.5 127.6 119.1 110.6 102.0
Scheduled debt service ratio
(Percent of exports
of goods and
services)
2.1 2.6 3.1 2.6 13.0 22.9 13.1 11.5 8.9 8.5 7.6 6.8
Gross reserves
(months of imports
of goods and
services)4
4.7 5.4 4.5 5.1 5.0 5.2 4.4 4.6 4.6 4.6 4.2 4.0
Gross reserves 596.4 742.2 814.2 1051.2 1042.0 1144.2 950.4 989.0 978.8 1030.1 1006.2 1047.6
Memorandum item:
Nominal GDP
(billions of Rwanda
francs)
2,565 2,985 3,280 3,826 4,409 4,437 5,109 5,118 5,839 6,578 7,412 8,364
Sources: Rwandan authorities and IMF staff estimates and projections. 1 Projections are based on the program exchange rate of RWF 604.14 per U.S. dollar. 2 As a percent of the beginning-of-period stock of broad money. 3 On a fiscal-year basis (July–June). For example, the column ending in 2011 refers to FY2010/11. 4 Data from 2009 onward includes SDR allocation.
III
Appendix II: AfDB’s Ongoing Portfolio in Rwanda
No. Sector and project name Type of
instrument
Total
amount
(UA)
% disb.
as of
Jan. 2013
Approval
date
1.0 AGRICULTURE
1.1 Bugesera Agriculture Development Support
Project—PADAB ADF grant 10,000,000 73.1% 24-Jul-06
1.2 Livestock Infrastructure Support Program—
LISP (SBS) ADF loan 21,810,000 100% 29-Jun-11
TOTAL APPROVALS 31,810,000 91.6%
2.0 TRANSPORT
2.1 Butare-Kitabi-Ntendezi Road Project ADF grant 16,000,000 61.7% 25-Mar-09
TOTAL APPROVALS 16,000,000 61.7%
3.0 WATER SUPPLY & SANITATION
3.1 Rural Water and Sanitation—Phase II
(AEPA)
ADF grant
RWSSI 16,000,000 58.1% 1-Jul-09
TOTAL APPROVALS 16,000,000 58.1%
4.0 SOCIAL
4.1 Support to Skills Development in Science &
Technology ADF grant 6,000,000 20.3% 11-Nov-08
4.2 Regional ICT Centre of Excellence ADF loan 8,600,000 0.6% 14-Dec-10
TOTAL APPROVALS 14,600,000 8.7%
5.0 MULTI – SECTOR
5.1 Competitiveness & Enterprise Development ADF grant 5,000,000 51.8% 29-Dec-08
5.2 Support for Policy and Strategy Development ADF grant 1,000,000 96.4% 18-Sep-09
TOTAL APPROVALS 6,000,000 59.2%
6.0 PRIVATE SECTOR
6.1 Support to Rwanda Private Sector Federation FAPA grant 1,000,000 59.8% 27-Aug-08
6.2 KivuWatt AfDB loan 15,892,693 81.5% 3-Feb-11
6.3 BRD (LOC & FAPA) AfDB loan
FAPA grant 5,881,798 0% 19-Nov-10
6.4 BK (LOC & FAPA) AfDB loan
ADF loan 7,955,460 0% 19-Nov-10
TOTAL APPROVALS 30,729,951 44.1%
7.0 MULTINATIONAL OPERATIONS
7.1 Isaka-Kigali Railway Study (Phase 2) ADF grant 1,670,000 35% 17-Nov-09
7.2 Nyamitanga-Ruhwa-Ntendezi-Mwityazo
Road ADF grant 50,620,000 37.3% 16-Dec-08
7.3 NELSAP Interconnection ADF grant 30,470,000 0.8% 27-Nov-08
7.4 Bugesera Multinational Project ADF grant 14,980,000 16% 25-Sep-09
7.5 Rubavu-Gisiza Road Project ADF loan
ADF grant
45,050,000 0% 25-Jul-12
7.6 Sustainable management of woodlands and
restoration of natural forests of Rwanda
Congo
Basin Fund
(grant)
4,015,424 13.6% 29-Nov-11
7.7 Lake Victoria Water & Sanitation Program ADF grant 15,110,000 0.3% 17-Feb-10
7.8 Payment and Settlement Systems Integration
Project ADF grant 3,690,000 0% 5-Dec-12
TOTAL APPROVALS 165,605,424 13.7%
GRAND TOTAL APPROVALS 280,745,375 31.8%
IV
Appendix III: Similar Projects Financed by the Bank and Other Development Partners
Country/Agency Sector Project
Development
Partners finance
(millions)
Completion
Date
World Bank Transmission Urgent Energy Development
Project (UERP) PO90 194 USD 25 2010
BADEA + Saudi
Fund Electricity access
Increase electricity access in
three areas in Rwanda USD 24.388
2012
Rwanda
Government
Transmission and
Electricity access
Electrification of six districts
in Eastern Province USD 68.6 2013
European Union Electricity access
Increase Rural Energy
Access in Rwanda
through Public
Electrification Project for
the Rural Population through
Renewable Energy
(EPRER)
Euro 18 2013
OFID Electricity access
Electricity Access Scale-Up
Project Loan Agreement
N°1293P”
USD 10 2013
World Bank IDA Electricity access
Electricity Access Scale-Up
and Sector-Wide Approach
(EASSDP), CR N° 4651-
RW
USD 70 2016
JICA Transmission and
Electricity access
Project for improvement of
sub stations and Kigali
distribution lines
USD 25 2014
Government of
the Netherlands
Generation and
electricity access
Rwanda Electricity Sector
Programme—Investment
Prospectus
USD 39 2014
AFD Electricity access Convention AFD No. CRW
3000 01 Euro 4.6 2014
OFID Transmission Additional funds for
EASSDP USD 12 2015
World Bank IDA Electricity access Additional funds for
EASSDP USD 60 2016
Belgian Technical
Cooperation
Generation and
electricity access
Private Partnerships—
IREARPPP Euro 17.5 2016
CTB Generation Rukarara II HPP Euro 5.741 2013
EX-IM Bank Generation Nyabarongo hydropower
project USD 80 2014
Belgian Technical
Cooperation Generation
Geothermal resource
development Euro 27 2017
BADEA / OFID Generation
Rehabilitation of three
hydroelectric power plants
(Mukungwa-Gihira-Gisenyi)
Euro 3 2014
AfDB Transmission NELSAP Rwanda-Uganda
Interconnection
UA 30.47
2014
KfW Transmission
NELSAP Rwanda-Burundi
Interconnection and
NELSAP Rwanda-DRC
Interconnection
Euro 36.25 2015
Appendix IV: Map of Project Area
V
