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Project Development Programme East Africa

Target Market Analysis

The Solar Energy Market in Rwanda

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Target Market Analysis

The Solar Energy Market in Rwanda

Authors

Integrated Energy Solutions (IES):

Paul Kirai

Anjali Saini

Mark Hankins

December 2009

Editor

Deutsche Gesellschaft für technische

Zusammenarbeit (GTZ) GmbH

On behalf of the

German Federal Ministry

Of Economics and Technology (BMWi)

Contact

Deutsche Gesellschaft für technische Zusammenarbeit (GTZ) GmbH

Potsdamer Platz 10, 10785 Berlin, Germany

Regine Dietz

Daniel Busche

Tel: +49 (0)30 408 190 253

Fax: +49 (0)30 408 190 22 253

Email: [email protected] Web: www.gtz.de/projektentwicklungsprogramm

Web: www.exportinitiative.bmwi.de

This Target Market Analysis is part of the Project Development Programme (PDP) East Africa. PDP East Africa is implemented

by the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) on behalf of the German Federal Ministry of Economics

and Technology (BMWi) under the Export Initiative Renewable Energies. More information about the PDP and about renewable

energy markets in East Africa: www.gtz.de/projektentwicklungsprogramm

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Target Market Analysis: The Solar Energy Market in Rwanda IV

Contents

1 STATUS QUO OF THE SOLAR ENERGY SECTOR .............................................................................1

1.1 Brief Solar Sector Overview ......................................................................................... 1

1.2 Major Market Segments .............................................................................................. 1

1.3 Local capacities ........................................................................................................... 4

2 MARKET POTENTIALS ...........................................................................................................................5

2.1 Overall sector outlook .................................................................................................. 5

2.1.1 Public Sector Market ........................................................................................................ 6

2.1.2 Private Sector PV ............................................................................................................. 7

2.2 Undeveloped market opportunities .............................................................................. 9

2.2.1 Solar water heating (SWH) .............................................................................................. 9

2.2.2 Grid connected solar PV .................................................................................................. 9

3 SOLAR-SPECIFIC REGULATION AND FRAMEWORK .................................................................. 10

3.1 Policies and regulations ............................................................................................. 10

3.2 Applicable public sector support / financing mechanisms and sources ...................... 11

4 BUSINESS PARTNERS AND COMPETITORS .................................................................................. 12

4.1 Overview of Key Solar Market Players ...................................................................... 12

4.2 Overview of major and/or most emblematic projects.................................................. 15

4.2.1 Public Sector PV Investments ........................................................................................ 15

4.2.2 Kigali Solair .................................................................................................................... 15

Target Market Analysis: The Solar Energy Market in Rwanda V

Summary

Rwanda is a densely populated, small country with a relatively low average income. Its small solar

market was less than 60 kWp/annum in 2008 and total installed capacity is estimated to be below 1

MWp.

Solar power in Rwanda is mainly a procurement market for Government and NGO institutional

systems though there is an increasing demand for Solar Home. In 2008, Kigali Solair (solar PV

project) injected 250KW to the grid and plans are to expand to 1MW, but still there remains no

renewable energy feed-in tariff.

Rwanda is positioned well to serve as an export market within the Great Lakes region. Since it is

based mostly on procurement, current demand is extremely unpredictable and irregular. The future

outlook however seems bright; high electricity prices, combined with some favourable policy indicate

future opportunities in the solar water heater industry and also grid-connected solar PV market

towards 2015. The Government’s Solar Energy Related Budget 2009 allocated USD 1.72 million,

excluding project-related work, the majority going towards a strategic study of renewable energy.

Target Market Analysis: The Solar Energy Market in Rwanda VI

List of Acronyms

ACDM Atelier Central de Maintenance

a-Si amorphous silicon

BBS Battery Based System

BTC Belgian Technical Cooperation

BOS Balance of System. (Components of PV systems)

CDC Center for Disease Control

CRS Catholic Relief Services

EGPAF Elisabeth Glaser Pediatric AIDS Foundation

ERC Electricity Regulatory Commission

FHI Family Health International

GEF Global Environment Facility

GLE Great Lakes Energy

HC Health Center

ICT Information and Communication Technology

kWp Peak kilowatt

LED Light Emitting Diode

MINIFRA Ministry of Infrastructure

MTS Modern Technology Services

MWp Peak megawatt (solar PV unit)

NGO Non-Government Organisation

PEPFAR President's Emergency Plan for AIDS Relief

PIH Partners in health

PPA Power Purchase Agreement

PV Photovoltaic

PVMTI Photovoltaic Market Transformation Initiative

RWF Rwandan Franc

SELF Solar Electric Light Fund

SHS Solar home system

SWH Solar water heater

UNDP UN Development Program

USAID United States Agency for International Development

Wp Watt at peak

x-Si Crystalline silicon

Target Market Analysis: The Solar Energy Market in Rwanda VII

List of Tables

Table 1: A Summary of Current Solar PV Market Activities in Rwanda .......................................... 2

Table 2: MINIFRA Solar Energy Related Budget 2009 ................................................................... 6

Table 3: Indicative ICT and PV System Procurements, 2008 Budget by MINEDU 2008 ................ 7

Table 4: The SHS Market in Rwanda .............................................................................................. 8

Currency

US$ 1 = 555 RWF (August 2009)

Target Market Analysis: The Solar Energy Market in Rwanda 1

1 Status Quo of the Solar Energy Sector

1.1 Brief Solar Sector Overview

Rwanda receives an annual solar radiation of 5.2 Wh/m2/day1. This represents a good potential for

solar PV development. Like most countries in the region, solar radiation is considerably variable, and

months in the cloudy season have average irradiation levels of below 4.5 Wh/m2/day.

A combination of high electricity and fuel prices, and a growing economy, as well as export

opportunities into Congo, should increase the overall demand for solar PV equipment in Rwanda.

However, due to the small size of the country, the medium to long-term off-grid opportunities will

gradually decrease as the grid network is enlarged and coverage made denser. Despite of the high

cost for electricity in Rwanda (US$ 0.21 cents/KWh), the solar PV market is still undeveloped. Current

demand for PV is below 60 kWp/annum and total installed capacity is estimated to be below 1 MWp.

Rwanda has a net deficit of power with a national electrification rate of 8 % and a rural electrification

rate of 1 %. The country needs a total of at least 100MW to meet present demand and sustain its

economic growth. There is a government target to double the electrification rate, increasing

connections to 16% of the population (equal to 200,000 connections) up from the current 100,000

customers by 2012 at a cost of US$ 400m.

Government and NGO programs, electrification targets for rural health, educational facilities, and

government administrative offices are the key drivers of the Rwandan solar energy market. While the

demand for solar home systems appears limited, there has been a recent growth in this sector due to

an increasing (but still small) middle-income community. The Rwandan government is working with

partners such as the European Union, the World Bank and the Belgium government to install solar PV

in public health centres, schools and government administration facilities in the rural areas. Their total

installation target is approximately 200 kWp in solar PV installations commencing in 2009.

Rwanda is also home to the “largest single solar installation” in Africa - the Kigali Solair- that

generates 250KW and feeds into the national electricity grid. The plant was funded by the German

municipal power company Stadtwerke Mainz and installed by Juwi in 2008.

1.2 Major Market Segments

There are several active market segments in the solar PV market, elaborated below and in Table 1:

Government procurements for health centres, schools and administration centres

NGO procurements for institutional systems

Solar home systems and small business systems

Government programmes

The Rwandan Government has an excellent relationship with donors and relies on donor support for

budget support and infrastructure development. It issues tenders for the installation of solar PV in

schools, health centres and clinics, as well as administrative centres (sector offices). Relationships

with key donors, including the European Union, the World Bank, the US Government (through USAID

& PEPFAR) and the Belgian Government, will enable Rwanda to aggressively pursue – and in all

likelihood achieve – a high level of electrification of Government institutions.


Administrative centres. There are 145 such sector offices currently un-electrified. Out of the

total 496 centres, 86 run on diesel generators and 116 on solar PV. The central government

issues 3-4 tenders per year2. District governments contract directly with the contractor and

public tenders are not always announced.

Health centres and schools. The World Bank, the European Union and Belgian Technical

Cooperation (BTC) will be funding solar electrification of Government health centres and

schools over the next five years and the objective is to cover all non-electrified institutions.

These procurements may cumulatively be larger than 200 kWp.

Non-Government Organisation Procurements

In addition to the Government programs, various donor-led programmes to electrify Health Centres in

Rwanda are under way. PEPFAR3/USAID, which spent over $120 million in Rwanda in 2008, is

supporting programs to electrify the hundred plus health centres that proving anti-retroviral, HIV

testing and counselling services.

Implementing partners (who manage program, and purchase energy systems) include the Catholic

Relief Services (CRS), Partners in Health, Intra Health, ICAP, and Family Health International (FHI),

EGPAF and Columbia University. Together they have installed a few tens of kW of PV over the last 3

years. In the future, battery back-ups with inverter systems will also make up a large part of this

growing demand.

The implementing partners carry out the above contracts. Each partner carries out tenders according

to their own process, and these processes differ considerably. For example, Columbia University

purchased all of its equipment in the US through a US NGO, while CRS and FHI both purchase

equipment on the local market. USAID and PEPFAR may complete a larger procurement project in

the near future.

Solar Home Systems

Solar home systems will be an important sector for future growth in PV. Presently, most of the likely

customers include middle class customers with homes in off-grid rural areas including teachers,

business people, church leaders and NGOs. Only one company called Modern Technology Servicers

(see Section 4) is aggressively exploiting this market at present.

Great Lakes Export Opportunities

Because Kigali is strategically located to serve consumer needs of eastern Congo (Goma, Kivu),

Burundi and parts of Uganda, many business people sell products into these regions from Kigali.

Solar PV providers consistently mentioned that they serve these markets, and that they make up a

significant portion of their business.

Table 1: A Summary of Current Solar PV Market Activities in Rwanda

Solar PV Technology Size of

opportunity

Estimated kWp

installed/year (2008)

Notes

Government administrative

centres

>0.4 MWp ±15 kW Good Government contacts

required

Government clinics and schools >1 MWp ±40 kW World Bank, EU, Belgian

NGO & NGO health sector >0.3 MWp <±5 kWp PEPFAR,

Solar Home System >4 MWp N/A Low rural spending power

TOTAL >6 MWp >50kWp

2 Tenders are issues by district agencies. Quality of tender documents is mixed and there is a lack of quality

design work and specification in tender documents. 3 The US President’s Emergency Program For AIDS Relief


Predominate Operator Models

The Rwandan solar PV market is an early-stage market of small players that is poorly integrated into

the global and regional solar energy industry. Six to eight companies compete in the market, but only

two of them sell over 15 kW per year (see Section 4). In general, companies are involved in PV as a

side-business. The PV business was better developed before the genocide, but, as with other sectors,

demand collapsed during 1993/94 and did not pick up again until 10 years after the war. Total

“normal” demand for PV is unlikely to be more than 60 kW per year, but an increasing number of large

projects have made this number grow quickly and it is likely that there is a substantial “invisible” /

under the counter market. As with other countries in early stages of PV development, much of the

business is channeled through the donor sector, and some local companies have poor access to

these projects. In 2008, over 30% of the total demand was in a single procurement by a donor agent

that avoided taxes and duties.

PV and Balance of System (BOS) prices are much higher than in other parts of the region. Module

costs well over $10 per watt are common. PV system components such as batteries are also very

highly priced. This means fully installed systems often cost over $20 per watt. Equipment is sourced

from Europe and Asia; solar companies tend to be linked with European partners.

The high price regime favors a contracted approach to sales rather than over the counter. Only two

companies were able to provide price lists. High prices are caused by high duties4, lack of

competition and lack of availability of components on the market, and the consequent need to source

individual purchases rather than buy in volume or stock. It is interesting to note that, despite

increasing activity in Rwanda’s PV demand since 2007, there is little interest in the market among the

large (i.e. Kenyan) regional players. This has to do with the fact that local Rwandan companies do not

actively seek to lower prices or become more competitive (i.e. by seeking out lower prices), as their

customers (donors) have previously been willing to pay high prices and there is little competition.

Only two companies displayed a strong linkage with PV companies outside of the country (see

Section 4). Many dealers were not conversant with recent developments in PV and inverters –

technologies that change almost monthly. As well, rather than taking an educative approach to

customers, some dealers “mystify” the technology, making it seem like something that the layman

customer would not be able to understand.

Companies maintain very little stock, instead relying on tenders and projects to gain business. In this

regard, solar PV is like a contracting business. Equipment is procured after the deal is made and little

is kept in stock. One or two companies (MTS, SECAM) are more customer-oriented than others (a

favorable trend). But in general all companies rely on clients that come back, such as NGOs,

churches, the military or projects and are willing to pay premium prices. Very few companies are

attempting to build volumes by supplying to agents.

Some companies complain that multilateral and Government tenders are not conducted transparently

and that the donor-controlled aspects of the market make it difficult to participate. Some companies

interviewed do not participate in tenders any more because of the time consuming nature of bid

preparation and the lack of “fair” evaluation of tenders5. Surveys carried out by this consultant have

found that many Government-tendered systems are installed without proper design or specification

work. One of the problems is that “Government” tenders are put together by District officials, Ministry

4 Duties amounted to over 60% of the cost of systems until they were recently removed. However, dealers

complained that customs officials were unaware of the removal of duties and still charged them. 5 The recent several million dollar Global Fund tender was mentioned by a number of dealers in this regard.

Procurement documents from this project were poorly prepared and obviously not by a PV expert.


of Health officials, and the military or other Government departments. There is no accepted

methodology for designing and procuring PV systems.

1.3 Local capacities

There are 5-6 players active in the Rwandan solar energy sector, and they are the primary

repositories of solar energy skills (as well as a number of independent contractors). These include

SECAM, Modern Technical Services (MTS), Davis & Shirtliff, Great Lakes Energy, EPS Renewable

and the Solar Electric Light Fund6 (See Chapter 4 for more information). In addition, the Kigali

Institute of Technology has conducted basic solar training courses with SELF. As well, the Atelier

Central de Maintenance (ACDM, the Maintenance workshop for the Ministry of Health) plays a role in

maintenance of health equipment; though it does not have well-developed solar energy expertise, it

does have qualified technicians at district level who can easily be trained to maintain PV systems.

There is also some regional expertise in solar energy in smaller towns. For example, Family Health

International – who are one of the main players in electrification of PEPFAR health centres have a

small network of solar PV technicians.

Rwandan solar energy companies are just beginning to build up capacities. Their products are rather

expensive (over US$ 20/Wp), and there is limited capacity to design and deliver sophisticated PV

systems and battery backups. Furthermore, other groups that might provide technical service, such

as the Atelier Central de Maintenance in the Ministry of Health or the Ministry of Infrastructure, are

over-stretched and poorly equipped to provide services7. Nevertheless, as described below, some

groups have recently provided capacity building services in the country.

Training programs have been conducted sporadically be a variety of players in the past 10 years.

Unfortunately, there is no coordinated repository of trained PV technicians, and as yet there is no

accepted code of practice or curriculum for PV in the country in university or among technician

practitioners. Some of the classes carried out include:

PEPFAR-sponsored classes to develop local knowledge to maintain the solar PV and health

centre energy systems. The Atelier Central de Maintenance (ACDM) was involved in these

classes.

SELF/Kigali Institute of Science and Technology classes on basic solar PV. SELF also

trained a dozen technicians to install sophisticated hybrid PV-generator systems as part of its

Columbia University work.

CDC is collaborating with Toluene University of Columbia for development of capacity for

energy management and maintenance of the solar PV systems in the health centres.

JICA is supporting a college with the MINIEDU to train solar technicians.

Stadtwerke Mainz, the German company that installed the grid-connect system trained a

network of regional PV technicians

The EU solar programme of the MINIFRA plans to train technicians.

Bidders for various government solar PV contracts are required to include a component for

training of technicians.

6 SELF does not maintain a local office but has contracted with PEPFAR partners to install dozens of institutional

systems. It has conducted several training programs to install large health centre systems. 7 Although ACM is designated as the provider of maintenance service for health care centres, it has only 2

vehicles and less than 25 staff who must provide all maintenance skills for the entire country’s health sector!


Strengths and weaknesses of Local Capacities

All the local companies have limited capacity to install large scale projects. For example, MTS, Davis

and Shirtliff, and SECAM are dealers for other types of goods and services including diesel

generators, pumps and general hardware.

Several large tenders have been announced for sectors (i.e. the Global Fund tender for the health

sector). As mentioned previously, PV experts do usually not design such tenders and the system

designs are not adequate for international companies to bid on; companies often win them without

experience in PV technology.

In other cases, Government tenders are often announced in small tranches on regional levels to be

handled by small local companies. Well-connected small contractors, not necessarily importers-

suppliers, often win such contracts. Many of them do not have fulltime technicians – let alone

engineers. They contract technicians on an as-needed basis.

Complaints of poor installation as a result of bad workmanship or components are common. There is

a task force in the MINIFRA to establish some basic standards for solar PV equipment and

installation.

There is a critical lack of capacity to design, specify and prepare procurement documents for PV

systems among Government and project staff. This means that is it often impossible for professional

PV suppliers to prepare bids, as the documents on which their bids are based do not enable proper

sizing and elaboration of systems.

An international NGO is set to start producing PV modules from second quality silicon wafers and to

sell them in the local market at discounted prices. This is expected to build local capacity in basic

production and assembly of PV modules, which could extend to better installation practice.

2 Market Potentials

2.1 Overall sector outlook

The overall outlook for solar in Rwanda is that Governments and donor projects will continue to

dominate the market in the short and medium term. Demand by private sector for solar products

remains limited, but may become an important niche market.

There are over 1 million households in Rwanda, out of which only 8 % have access to grid electricity,

with most connections in the main cities (Kigali alone accounts for nearly 75 % of total electricity

consumption). Electrogaz is the country’s only power generation and distribution company. It has an

installed domestic capacity of about 27 MW that is barely sufficient to cover half of its peak demand.

The other half is imported from Rusizi - a consortium of the electric utilities of DRC, Rwanda, and

Burundi. Electricity sales have been growing at a rate of about 7 % p.a. on average since 1997.

Supply constraints kept sales artificially low.

In 2008, the Kigali Solair (solar PV project) injected 250KW to the grid. Another 4.5MW has been

connected from the initial phase of the Lake Kivu methane gas project. Even then, the utility is faced

with a generation deficit and still has to rely on thermal generation to meet peak demand.


2.1.1 Public Sector Market

The government (MINIFRA) plans to increase grid connection to 16 % by 2012 at a cost of

US$400million. This will require a combination of expanded grid extension and new power generation.

By the year 2020, the grid coverage is projected to reach 35 %.

In the past 10 years, several hundred kWp of solar has been installed off-grid in Rwanda, mainly in

health care centers, schools and administration buildings. The planned Government budget

expenditures for solar energy in 2009 (which do not include projects) are summarized in Table 2.

Table 2: MINIFRA Solar Energy Related Budget 2009

Project Amount (RWF) US$

Rural electrification with solar energy 250 000 000 450,500

Access to energy in rural areas 130 000 000 234,000

Strategic study/renewable energies 575 000 000 1,036,000

Total 955 000 000 1,720,000

Current tenders and projects:

European Commission (EC) programmes at MINIFRA. The project will spend Euro 7 million

over the next 5 years on solar electrification of at least 350 institutions – ranging from schools,

health care centers and administration offices with 1.5 – 2.5 kW each. The program will be

implemented by the private sector through tenders by the Ministry.

Belgian Technical Cooperation – BTC. This program aims to electrify 60 health care centers

with a budget of Euro 1.5 million in its first phase from 2009-2010. It is targeting about 1 kWp

per health care center.

The World Bank is currently supporting a major rural electrification initiative in Rwanda. It is

expected to provide Government rural electrification programs with considerable resources, a

significant portion of which will be renewable and PV.

Government Administration: The energy supply of the 496 Government offices is as follows:

146 centrally supplied by ELECTROGAZ

205 supplied by:

Solar PV (116)

Diesel generators (86)

Micro hydro (3)

145 un-electrified

From the above, more than 230 Government sector offices (including diesel operated ones) will

potentially be supplied, through Government procurements, by solar PV with a requirement of as

much as 300 kWp.

Health Care Sector: out of the 528 health care centers in rural areas, 50 % have been electrified (with

grid connections, generators or solar)8. Around 300 private health care centers currently lack

electricity. A program administered by the Government in collaboration with partners and NGOs aims

8 Ministry of Health


to electrify all rural health care centers in the country. In 2009, the UN Global Fund for AIDS issued a

tender for 34 health facilities, while the BTC programme covers another 60.

Projects will be done mainly through tenders where the Government invites eligible firms9 to bid for the

contracts. As mentioned previously, a major area of concern has been the tender specifications,

supervision and quality of installation.

Education Sector: a decision by the government to include English as an official language will most

likely lead to an increase in electronic broadcasting and ICT applications which could stimulate the

demand for solar PV – especially in rural areas. Rwanda is rated highly among African countries with

regards to ICT adoption, and this could also spur the growth of PV market as many NGOs and homes

acquire computers and telecommunication/entertainment devices.

There are plans by the Government – through the Ministry of Education (MINEDU) to have ICT in all

schools in the country. This is another major driver for PV development in Rwanda. The total Ministry

of Education budget for solar PV to promote ICT in 2008 was RWF 1,350,000,000.

Table 3: Indicative ICT and PV System Procurements, 2008 Budget by MINEDU 2008

Type of School Amount RWF US$

Primary schools 500 000 000 901,000

Junior secondary school 400 000 000 721,000

Upper secondary education 400 000 000 721,000

Teacher training and colleges of education 50 000 000 90,100

TOTAL 1 350 000 000 2,433,100

Recommendations to German RE enterprises

Work closely with existing traders. Seek those that maintain good Government contacts and

that have a track record of completing contracts for the Government (see Section 4 for

company lists).

Develop networks of local agents and installers (it may be helpful to seek graduates of

previous programs). Provide in-service training.

Understand the procurement procedures of Government.

Ensure that the local agent understands your equipment and is equipped with a suitable

amount of spares

When funds originate from a donor, make an effort to communicate your company’s desire to

participate in any tender with both the Government and the donor.

2.1.2 Private Sector PV

Solar Home Systems (SHS)

The limiting factor for the deployment of SHS sector is the extremely low purchasing power of rural

populations. With a PPP-adjusted per-capita income of US$1206 (161 out of 177 total countries), not

many rural consumers can afford solar systems in Rwanda. However, the economy has been growing

moderately and is expected to spur demand for solar home systems.

9 Companies interested in these programs should contact the Ministry of Infrastructure, the Ministry of Health or

the relevant donors supporting the projects.


Extension of mobile phone coverage will increase the need for phone charging possibilities around the

country. As well, expansion of television coverage will lead to an increase in the number of private

television sets and also spur the solar home market.

Growth in the SHS sector is slow but encouraging with at least three companies actively marketing

their products. Given the low-income level of the country, this report estimates that less than 10 % of

the total off-grid rural population (1.7 million un-electrified) would have an interest in a 10-50 Wp PV

system and another 30-40 % would be interested in a micro system. Table 4 provides a basic model

for this market:

Table 4: The SHS Market in Rwanda

Type of Solar Home

Systems

Size of

System (Wp)

Estimated % of

HH Buying

Total

Number

Size of

Market (kWp)

No System 0 55.0% 944,690 -

Micro Systems 2 35.0% 601,166 1,202

One Light & Radio 10 7.3% 124,527 1,245

2 light and radio system 20 2.0% 34,352 687

4 light system or higher 50 0.5% 8,588 429

Larger systems

(inverter or hybrid)

150 0.3% 4,294 644

TOTAL 100.0% 1,717,618 4,208 kWp

Telecommunication

The telecommunications sector has not been – and will not be – a major client though the

government/donors have subsidized the use of solar energy in a couple of base stations (BTS) in

remote areas to enable mobile coverage. There would be the opportunity to extend the coverage of

mobile phones if the mobile phone companies made use of more solar PV.

At least one major dealer of PV in Kigali has recognized this opportunity and is developing a solution

for mobile phone companies. As in other East African countries, a small market for PV-powered phone

charging devices is likely to develop.


Work closely with existing traders. Select traders that have experience selling goods into the

consumer and private market. See Section 4.

Develop networks of local agents and installers (it may be helpful to seek graduates of

previous programs). Provide in-service training

Develop a marketing strategy for rural households, NGOs and other groups.

Ensure that the local agent understands your equipment and is equipped with a suitable

amount of spares

Connect your Rwandan agent with other players in the East African market with which you are

associated.


2.2 Undeveloped market opportunities

2.2.1 Solar water heating (SWH)

Many households, hotels and institutions in Kigali use electricity to heat water. Given current tariff

rates this amounts to costs close to US$ 100 per month and boiler. The use of electricity for water

heating is extremely expensive, and is often the most expensive part of a business’ or household’s

electricity bill.

At present, there are only a few providers of solar water heaters in the country, and the market is only

in its early stages. Prices for SWH are extremely high and few players trade aggressively in this

market.

The two primary markets are private households and tourism. Assuming 15 % of the existing electrical

connections have a boiler, the base potential market is about 15,000 households and commercial

establishments.

Government legislation will require new buildings to include solar water heaters in their design. This

will provide impetus to the development of the SWH market.


Approach large hotels, developers, urban-based customers, NGOs, health sector supporters

and finance agencies.

Monitor Government solar water heating programs and legislation closely. This is best done

through use of partner companies.

Meet with Government and donors to discuss how SWH programs can be rolled out. Note

that energy legislation is primarily made in MINIFRA.

Advertise in the media stressing how investments in solar pay back quickly. Any advertising

campaign would best be planned with a local partner.

Develop partnerships with companies that are familiar with the tourism and housing industry

(not necessarily solar PV companies). These include contractors, architects, service

providers, etc.

2.2.2 Grid connected solar PV

Grid connect PV is not considered in existing Government policy. As mentioned below, high level

interest in grid connect solar is not explicitly mentioned. Hydro, diesel generation, regional

interconnection and methane-fired generation are the current major focus for national power supply.

Three things make the prospect of grid connect PV perhaps more interesting in Rwanda than in other

parts of Africa:

Rwanda already has experience with Africa’s currently largest grid connected PV system

Electricity prices are among the highest in Africa and Rwanda has a major shortfall of

electricity. At US$ 0.21, grid parity is not far away.

Unlike other countries in the region, the power sector in Rwanda is managed in a transparent

manner and with Government incentives it would be fairly easy for a project to be developed.

Interest in grid-connected systems would likely be higher from consumers (who could combine

systems with power back-ups and off-set power prices) than from the power company. Note that peak

power demand occurs in the evening, not during the day, so ELECTROGAZ would be unlikely to pay


a premium for PV power10

. Government dispensations in favor of grid connection would be required.

In order for this to happen, there would have to be development of financial, technical and legal

protocols that are independently supported. However, there is no reason to believe that the

Government would be broadly supportive of any initiative.

3 Solar-specific regulation and framework

3.1 Policies and regulations

Rwanda is well-known for being a leader in governance in the region since the genocide, and as such,

it has attracted significant amounts of donor support during the last 15 years. Much of this support is

targeted at the energy sector. As well, the Government is aggressively pursuing rural electrification

strategies which include renewable energy components. What is missing is a strong internal capacity

to develop and build appropriate energy policy regimes. Given the urgency of the energy problems

faced, the lack of skilled manpower and the lack of finances, it is not surprising that there is not a well-

developed solar energy policy. For better or for worse, much of the policy development in renewable

energy occurs on an “ad hoc” basis, often as a result of donor advice.

The Government is focused on rural development, poverty alleviation and creation of business

opportunities. As such, its energy policy is designed to support these overarching goals:

Policy Objectives11

The national energy policy objectives are to ensure availability of reliable and affordable energy

supplies and their use in a rational and sustainable manner in order to support national development

goals. The national energy policy, therefore, aims to establish an efficient energy production,

procurement, transportation, distribution and end-use systems in an environmentally sound and

sustainable manner.

In the 2004 Energy Policy, solar energy is only mentioned broadly as a “potential” source of energy,

and as a part of its strategy to electrify off-grid areas. Rwanda does not have the budget to invest

heavily in renewable energy outside of its immediate development targets (and donors who provide a

large portion of Government support limit expenditures to immediate priorities).

Unlike other countries in the region, Rwanda has neither a stand alone electricity regulator or rural

electrification agency. Other Government departments (within MINIFRA) play this role. The key

Government institutions involved in renewable energy policy making and procurement include:

MINIFRA: The Ministry of Infrastructure is responsible for the build up of national energy

infrastructure. Rural energy is part of this mandate, however, staffing and funding

requirements restrict what MINIFRA is able to effectively do. The MINIFRA views its role in the

off-grid energy sector to include training, strategy development, development of technical

specifications for energy equipment, recommendation of strategies for the development of the

private sector and follow up work on the above.

Ministry of Health: This Ministry is actively involved in procurement of solar equipment for

remote health care centers.

10

The initial 250 kWp solar array outside Kigali was installed chiefly as a demonstration, and proper long-term

price agreements were not reached. 11

Rwanda Government Energy Policy 2004.


Government policy to promote rural electricity access is primarily based on the extension of the

Electrogas network as the most cost effective means. However it recognizes that where customers

are not clustered close enough for grid service, solar PV, generators or hydropower may be offered

through private suppliers.

For long term costs and environmental reasons, the Government is developing large scale PV

procurements for rural administration, health and education facilities. Priority action number 4 of the

energy policy is the only place where solar energy is specifically mentioned as part of implementable

government programs. The Government, in theory, also supports commercial sales of solar PV to off-

grid private sector customers and households. Theoretically, the Government has removed duties and

taxes on solar equipment. However, in a 2008 study, companies complained that customs agents still

charged duties on solar equipment.

So far Rwanda has not developed renewable energy feed-in tariffs, despite the implementation of a

250 kWp grid-connected project (which was given a spill contract by Electrogaz). As mentioned

above, grid connected solar power is not a priority, as the Government is focused on building up base

load supply at low costs in order to be able to meet peak demand.

The Government recognizes that demand-side management can play a role in reducing peak

electricity demand, as well as in lowering energy costs for consumers. To this end, they are

promoting compact fluorescent lamps and solar water heaters (to replace electric boilers). The

building code12

was recently revised so that it requires new buildings to install solar water heaters and

is likely to activate development of the solar water heating market.

3.2 Applicable public sector support / financing mechanisms and sources

Except for the procurements mentioned in Section 2, no direct public sector support or financing

mechanisms are available through Government programs for solar. Government involvement is mainly

in the form of government tenders and contracts.

Nevertheless, the Government has removed all taxes on solar equipment, which should have an

impact on pricing.

12

Discussions with Naceur Hammami, Ministry of Infrastructure Energy Expert


4 Business partners and competitors

4.1 Overview of Key Solar Market Players

Importing

Company

Description

& Distri-

butors

Company

Strategy

Major Products PV Business

Sector

Equipment

Sources

Contact

Person

Address Contact

Secam National

Company

based in

Kigali.

Member of

family-owned

large group of

companies in

Rwanda. Solar

PV is one of

many products

and services

offered.

Office equipment,

tenders. PV is less

than 5% of

business.

Oldest player in

the Rwanda PV

business (started

in 1980). Donor-

led and church

institutional

market. Control

40-50% of the

local market and

win at least 25%

of Government

contracts.

Relationship with

Total Solar. BOS

from companies

such as Steca

and Labcraft.

Has not invested

in “modern” PV

technology or

battery back-up

line.

Olivier

Costa

Managing

Director

RC

A0129/Rig

BP 892

Kigali

Rwanda

olivier@subizo

.com

Phone Work:

250 573528

Mobile: 250

08303361

Modern

Technology

Services

Solar

equipment

supplier

based in

Kigali.

Operates

out of shop.

Aggressive,

market-oriented

solar company.

Places less

value on the

system planning

and more value

on volume and

low prices

Sells a wide variety

of equipment

including German

charge controllers

and inverters.

Over the counter

solar products for

SHS. Tenders.

Opportunistic Joseph

KAYIBAN

DA

PO Box

7371

Kigali

Rwanda

mts@rwanda1.

com,

joseph.k@mts-

world.net

Work: + 250

05124687

Mobile: + 250

08306805

www.mts-

world.net




Davis &

Shirtliff

Rwanda

branch of a

Kenya-

based water

pump

company.

Large Kigali

shop.

Pumping

equipment

supply. Offers

PV and solar

water heaters.

The company

has 4 staff (only

one technician),

Core business:

supply of pumping

systems for high-

end markets (such

as swimming

pools) and rural

water supply

systems in

Rwanda, Congo

and Burundi.

Minor player in

Rwanda PV

market.

Clientele includes

NGOs and

independent

contractors.

Focuses on

quality equipment

and service, and a

long history of

serving donor

clients

Same as D&S

Nairobi. Suntec

modules,

Sundaya, Triplite

inverters. Turkish

solar water

heaters.

Richard

Mugo

richard@dayliff

.co.rw

Work: +250

504033

Mobile: +250

0830 3343

Great Lakes

Solar

Small

project

based

operator

Solar company

managed by

expat American

committed to

solar energy

business. Great

Lakes has 5 full

time staff.

Operates out of

small office.

Very little stock

is kept in the

premises.

Project-based

equipment and

consulting.

Opportunistically

operating in the

niche between

solar equipment

supplier, consultant

and activist NGO.

Interested in other

renewables

including biogas

and microhydro.

Donor-led

institutional

market. Works

with donor clients

to develop

proposals for

installation of

systems. Once

the work is

secured and

prices agreed,

equipment is

ordered.

Allied to G24 PV

company. Does

not stock.

Sam

Dargan

Bonne

Address

Building,

Top Floor,

Kigali,

Rwanda

sam@energyf

orafrica.com

Land: +25-

050-0537,

Mobile: +250

08656025

SOS

Energie

Kigali based

solar energy

contractor

and solar

water heater

assembler

5-year old

business

operated as a

side-business

out of a separate

auto-repair

business,

Garage Sebalex

SAPL.

Supplies by order,

and maintains no

supply or

storefront.

Contracts with

Rwandan military

and donors.

Experienced solar

system designer

and sub-contracts

a team of six

electricians, three

engineers and two

plumbers. He

was trained by the

ex-head of

SECAM.

Supplies

equipment from

French

companies such

as Total Energie.

Sebastien

Houben

Managing

Director

PO Box 417

Av. de la

Justice

Kigali

Rwanda

sabalexrw@ya

hoo.fr

sosenergierw

@yahoo.fr

Work: 250

576060

Mobile: 250

08301780








Consultants, NGOs & Non-Government Projects

Name Role in

sector

Activities Procurements

(Types of

equipment/

services)

Volume

kWp or $$$

Plans in

Immediate

Future

Contact

Person

Address Contact

PEPFAR/C

enters for

Disease

Control

Health

sector

project

Involved in control

of HIV/AIDS.

Strengthening of

health sector

institutions.

Occasional purchase

of energy equipment

$100's of K

per year

Not known Mary

Hadley

[email protected]

c.gov

Mobile: (250)

0830 2140

Government and Public Sector Projects

Name Role in

Sector

Activities Procurements

(Types of

equipment/

services)

Volume kWp

or $$$

Plans in

Immediate

Future

Contact

Person

Address Contact

Ministry of

Infrastruc-

ture

Energy

Sector

Policy and

Leadership

Development of

Energy Projects

Health, Education

and Military Sector

purchase of solar

equipment

Large

procurement

s planned

Not known Naceur

Hammami

, Alexis

Karani

BP 24

Kigali

Rwanda

nacerhammami@gm

ail.com,

[email protected]

BTC-CTB

Belgian

Technical

Cooperatio

n

Energy

Infrastructu

re Support

Launching

project to install

PV systems in

30 clinics

around the

country

PV equipment supply

for clinics

Estimated

€3M

Project being

developed

Erik Van

Malderen

rue Député

Kayuku, 41

B.P. 6089

KIGALI

RWANDA

erik.vanmalderen@bt

cctb.org

Work: 00 250 500

267

Mobile: +250

08305107

World Bank Energy

Unit, Africa

Region

Supporting

Rwandan

Government in

design of rural

energy projects

Procurement through

Government of

Rwanda

Not known Project being

developed

Erik

Fernstrom

efernstrom@worldba

nk.org

Work: +250- 591 318

+250 5396318

Mobile








4.2 Overview of major and/or most emblematic projects

4.2.1 Public Sector PV Investments

PV installations in the public rural institutions are the most significant projects in Rwanda. These are

government led initiatives and are expected to dominate the market for a while until the solar home

market develops and the private institutions take up solar. Projects are at various stages of development.

Interested players should contact the Ministry of Infrastructure (see Section 4.1). Projects include the

following:

Ministry of Infrastructure/BTC installation of solar powered clinics. BTC has made available €3 million for

the installation of about 30 solar powered clinics in the country. The project is in a late stage of

development (see BTC contact for more information).

Ministry of Infrastructure School and Clinic Power projects. With support from the World Bank and the

European Commission, the Rwandan Government plans to provide electric power to all schools and

clinics in the country in the next 10 years. Those regions that cannot be met by grid power will have

energy systems provided by PV and/or generators. The project is currently being developed. Contact the

Ministry of Infrastructure for more information.

4.2.2 Kigali Solair

“Kigali Solair” is a solar farm built by Stadtwerke Mainz (a German municipal power company) at the

outskirts of Kigali in 2008. It feeds 250 kW into the national grid during the daytime. The project builders

hope to expand this to 1MW – but no timeframe has been given. The feed-in tariff offered by Electrogaz

is said to be too low to cover capital and operation costs of the plant.

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