African Development Bank extends $84 million to boost Rwanda rural electrification

 African Development Bank extends $84 million to boost Rwanda rural electrification

African Development Bank extends $84 million to boost Rwanda rural electrification.

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The African Development Bank Group’s board of directors, have approved $84.22 million in loans and grants to electrify nearly 80,000 rural households in south Rwanda.

The project will not only advance the country’s goal of universal electrification, but will also benefit small businesses and the youth.  

The funds comprise a loan of $36.77 million from the Bank Group’s African Development Fund and a $47.45 million ADF grant. The approval was made on 26 May 2021.

The Transmission System Reinforcement and Last Mile Connectivity project will provide first time electricity connection to 77,470 households to the grid, entailing the construction of 595 km of medium voltage distribution lines and 1,620 km of low voltage distribution networks in six southern Rwanda districts.

The project will also see the upgrade, rehabilitation and extension of 1,720 km of low voltage network, and distribution of transformers in secondary cities with high load and is also expected to improve power supply reliability and stability across the country, expand electricity access and contribute to reducing greenhouse gas emissions by enabling access to clean energy.

Expectations to bolster education by extending students access to light for study, and also benefit both small and medium enterprises while enhancing job creation for youth is expected as an outcome from the project.

This project is part of the Rwanda Universal Energy Access Program (RUEAP), which seeks among other goals, to achieve universal access to electricity by 2024 and, it is also aligned with the country’s long-term development framework, Vision 2050.

The project draws from two of the Bank’s High-5 strategic priorities:  Light Up and Power Africa and Improve the Quality of Life for the People of Africa.

Rwanda’s economy is expected to grow by 5.1% this year, and growth is seen boosting up to 7.0% in 2022 and at an average of 7.8% in 2023-24 due to productive activities in agriculture, mining, industry and construction.

It is alleged that Rwanda aimed to launch a second economic stimulus program valued at $250 million to offer low interest loans to some investors and that Rwanda plans to increase spending in the fiscal year starting on the July 1st by 10% to 3.807 trillion Rwandan Francs (which is USD3.82 billion) and 16% of the budget will be funded by donors and the rest will come from tax revenues and debt.

However, a copy of Rwanda’s draft budget stated that the main issue associated with the country’s debt portfolio is the approaching repayment of the 2023 Eurobond of $400 million, and the East African nation’s debt levels shot up by 13% last year mainly due to borrowing in order to combat the Covid-19, and the country’s total public debt rose up to 71% of GDP at the end of 2020 and is expected to reach 79.7% at the end of this year.

Chen Williams

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