A $200m project to convert methane into electricity is poised to change the lives of nearly 2 million people in the mineral-rich Central African region. The project, which is being developed by American energy firm Contour Global, is found in Rwanda’s Karongi district, in the western province. The project in two phases with phase 1 was completed in November 2015 and it currently generates 26MW for the local grid. The next phase of the project will deploy 75MW to create a total capacity of over 101MW of clean power for the country by 2019.
The $200m project is being funded by concessional loans from financial institutions including the African Development Bank (AfDB), the Emerging Africa Infrastructure Fund (EAIF), the Netherlands Development Finance Company (FMO) and the Belgian Investment Company for Developing Countries (BIO). The AfDB also contributed $25m.
Rwanda wishes to use this resource to develop methane for power projects and other uses such as fertiliser. The government of Rwanda has developed a draft gas law and regulations to develop methane-based projects. Like most African countries, Rwanda lacks sufficient power to meet the needs of its growing population and economy. The government has set an ambitious target of increasing connectivity to 70% by 2018.
According to Rwanda Energy Group, the firm in charge of electricity distribution, the country is also set to import some 30MW from Kenya on a five-year long arrangement expected later this year.
Unlike its neighbours Uganda and the DRC, Rwanda does not have significant deposits of oil or metals such as copper and gold. The small East African nation is developing power projects in a bid to transform its largely agrarian society and sustain growth that has averaged 7.5% since 2000, according to the International Monetary Fund.
The goal is to become a middle-income economy by 2025. In April, the state-run Rwanda Development Board said that foreign direct investment in Rwanda would probably rise 36% this year to $1.5bn.
In May, Rwanda hosted the World Economic Forum on Africa. President Kagame called on investors to look at Rwanda’s energy sector to fuel the country’s economy and power it into the league of middle-income nations over the next 10 years.