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Rwanda sells off 22 Struggling Dams In Historic Deal

by Jean de la Croix Tabaro
6:19 pm
Rwanda sells off 22 Struggling Dams In Historic Deal

Construction of Rukarara II power plant in Nyamagabe Southern province.

Four local companies have acquired 22 struggling power plants in a massive public auction. Under the deal, the micro-dams will be managed by new owners for the next 25 years, KT Press has learnt.

The new buyers include four individual local companies and ten other companies in joint ventures between local and international firms.

Ngali Energy Ltd. acquired Base I and II, Ngororero, Rwondo and Ntaruka III while Rwanda Mountain Tea purchased Gihira and Rugezi Power plants. Rural Energy Promotion Ltd acquired Mutobo plant and Prime Energy Ltd purchased Rukarara 6.

Under the deal, the companies are obliged to commit to rehabilitation and upgrading the dams to ensure sustainable power production.

The government committed purchasing the power generated. The partners have also signed a 50% revenue sharing agreement, after calculating the overheads.

Iddo Musana, in charge of power plants at Rwanda Energy Group (REG) told KT Press that the 22 power plants have an estimated production capacity of 15 megawatts or 15,000 kilowatts/hr.

Considering the current retail unit price of Rwf 167 per kilowatt, the dams would earn Rwf 2.5 million per hour or Rwf 60 million per day.

Engineer Albert Butare, a Rwandan energy expert and also one of the buyers told KT Press “It is a good deal since it is the first venture of its kind.”  He said that it is a long term venture, reason why they needed international partner from UK.

“Companies in the lease have done this before and they have a great experience on how to improve the sector,” said Eng. Butare representing Africa Energy Service Group Ltd (AESG).

AESG Ltd is in a joint venture with Rwanda Energy UK Ltd (REG); they have acquired two dams, including Nyirabuhombohombo and Janja from Nyamasheke and Gakenke districts totaling 700 kilowatts capacity.

Mr. Musana, told KT Press that they are expecting the new owners to help the country provide a sustainable supply of energy.

Rwanda is still relying on 160 megawatt, but the country is looking forward to reach 500 megawatts by 2017 to meet the demand.

The country has also signed a deal with Kenya and Ethiopia to import over 400 megawatts.