Rwanda Energy Group (REG) Limited has reappeared before the Public Accounts Committee (PAC) to respond to the Auditor General’s queries with the hope to meet the country’s access to electricity targets despite sighted challenges in implementation.
The government business enterprise has not been able to appear before the committee for two financial years.
The group’s subsidiary- Energy Development Corporation Ltd (EDCL) Tuesday appeared before the committee to respond to their performance for the compliance audit report year ended June 2021.
EDCL is a company mandated to increase investment in the development of new energy generation projects in a timely and cost-efficient manner to expand supply in line with Rwanda’s development, and develop appropriate transmission infrastructure to evacuate new plants.
The company is responsible for delivering energy to relevant distribution nodes; plan and executing energy access projects to meet the national access targets- 100% access to electricity for all by 2024.
Ron Weiss, the REG Chief Executive Officer said that so far they have managed to reach 73% (on and off-grid) and the remaining 27% but this will need more budgets to the effect.
Weiss said that though there are some issues to resolve in both subsidiaries the funding needed for now is $680million which they are soliciting from development partners to move towards 2024 access targets.
“This will enable us to reach 80% of access and in order to implement the remaining 20% we need another $600M to attain the targets because it is not only access, we also need the generation, distribution, and transmission”, Weiss said.
However, PAC showed that in April 2011, Nordic Development Fund (NDF) signed a grant agreement with the government of Rwanda to finance the Sustainable energy development project for the promotion of solar water heaters.
NDF committed to providing a grant of €4M ($5,2M) and a government counterpart of $ 6M for the grant agreement duration of four years and 9 months but was later extended to 30 June 2021.
The audit noted that the revolving funds amounting to Rwf1.9billion refunded by beneficiaries on loans granted out of donor funds were not used to replenish the grant as required by the financing agreement.
The financing agreement state that the grant amount could be sufficient to reach up to 10,000 customers over the period of the project and a review of the beneficiary’s database revealed after 10 years from the date of signing the financing agreement on April 1 2011 up to June 2021.
Out of 10,000 solar water heaters of the project target only 3,337 beneficiaries were served representing 33.37% and yet the project financing agreement expired on 30 June 2021- yet the donor commitment was $321,722 (Rwf300M).
Out of Rwf300M which was disbursed in the previous year ended 30 June 2020 to finance the acquisition and distribution of 400 solar water heaters to new clients, only Rwf102.2M was used to settle 10 % of invoices of solar water heaters supplied previously and an amount of Rwf22.9M was used to honor other project commitments.
Hence, a balance of Rwf174.8M remained in a bank account as idle.
PAC chairman MP Valens Muhakwa and MP Christine Bakundufite asked why this could be so, demanding an explanation to how comes that a large number of citizens were not been connected yet funds lie idle.
MP Jeanne d’Arc Uwimanimpaye said testimonies of citizens show the project was a good one after years, there have been lesser efforts in mobilization and engaging the community to connect and this fund would have been fully used in two years if properly implemented.
“Instead of explaining that beneficiaries didn’t come through it’s better you consider improving awareness otherwise this will be a loss,” Uwimanimpaye said.
Weiss said that they recognize weakness in creating awareness campaigns on the solar project but they are doing a lot of promotion campaigns on other projects including enviro-friendly cooking stoves and solar energy.
“We going to work on it and in the future projects focus more on an awareness campaign to make these projects known,” he committed.
PAC chairman Muhakwa told REG to pay attention to the AG report and recommendations but also work on the areas of implementation of dwindling projects, management of tenders, and resolving citizen concerns of expropriation and paying off debts.
PAC also raised issues around incomplete Substations and transmission lines to boost access to electricity, especially with neighboring countries- Uganda DR Congo, Burundi, and Tanzania
For instance, one report showed that the progress of works was at 74% of completion for the development of transmission line Rusumo – Bugesera via Shango and 92.53% for the development of substations of Bugesera and Shango. The progress invoicing was estimated at 67.58% and 70.88% respectively as per the same supervision report
Felix Gakuba, the EDCL Managing Director said that there was disruption caused by contractors who faced challenges with equipment and travels however this issue is being resolved and most of the projects resumed.