State-owned Electrogaz is being restored to financial health under private management.

Beneath the beautiful waters of Lake Kivu, on the border with the Democratic Republic of Congo, are large deposits of methane, a natural gas that could soon be making a major contribution to alleviating Rwanda’s energy shortage.

Earlier last year, the international conglomerate Dane Associates signed a 25-year contract with the government to generate electricity from methane gas taken from the lake, which has estimated reserves of 55 billion cubic meters. Construction of the plant is expected to begin soon, and the first deliveries of electricity to the national grid could come as early as this year.

Lack of investment in new production facilities since the mid-1980s and low lake levels at its only two hydropower generating stations have left Rwanda with an energy deficit.

Competing for investment with neighboring countries and with the demand for energy rising as industrial activity increases, Rwanda cannot afford to have energy supplies that are unreliable and expensive.

At the same time, few Rwandans outside the major towns have access to electricity— only around 4 percent. Vision 2020 seeks to raise this to 35 percent.

In the short term, the government has taken action by providing funds to purchase 12.8 MW of new diesel generation capacity and by privatizing the management of Electrogaz. The management of the business has been handed over to German utilities services company Lahmeyer International, whose goal is to restore Electrogaz to a commercially and financially viable entity.

Walter Klotz, Electrogaz’s Managing Director, believes they are on the right track. “We have identified the problems and started rectifying them,” he says.
Meanwhile, Energy and Communications Minister Albert Butare highlights opportunities for investment in hydro-electricity generation. “There is hydro potential in the southwestern Gikongoro province and on the Nyabarongo River. We are still looking for partners and investors to participate in the Rusomo Falls project which is a regional 60 MW undertaking supported by the World Bank, and there are a variety of possible mini-hydro projects.”