Scaling Solar Applications’ in Rwanda

Rwanda: Vital Statistics Size: 26,338 sq.km Capital: Kigali Population: 12M GDP Growth: 8% GDP per capita: $723 Gross National savings: 15.3% of GDP. Gross Investments as a % of GDP: 26.0% Trade balance (GDP):15.4%.

Rwanda Energy Sector Power Generation Installed capacity of 208 MW Power Generation Potential Power Generation Installed capacity of 208 MW 54.5% RE share (hydro and solar) Rwanda’s domestic energy resources: Hydropower 313 MW Methane 350 MW Geothermal 490 MW Peat 300 MW High solar irradiance, with 1890kWh/per sqm Electricity Access 27.2% on-grid connections 7.3% off-grid access (solar) Access Target for 2023/2024 52% on-grid connections, 48% off-grid connections (by solar) 100% Public institutions (schools, health facilities, administrative offices) Achieve the universal access by 2024.

Policy and Regulatory Framework Rwanda overall strategy to diversify sources of energy by focussing on domestic, RE resources, and phasing out diesel power generation Rural Electrification Strategy (RES) approved by Cabinet on 27th April 2016. Simplified Licensing regulations for off-grid and Rural Electrification Public Private Partnership Law gazetted on 29th May 2016 Investment Code gazetted on 29th May 2015; Renewable Energy Law being finalized;

Rural Electrification Strategy (RES) Program 1 (provision of Subsidy) Targets 150,000 HH that met the set eligibility criteria Nearly 2000 systems have been installed through various donations Implementation through a tender process, subject to funds availability Program 2 (Provide Risk mitigation facility) The SREP fund will be used to implement this program HH will access a loan from the SACCOs/Bank and buy a solar system Companies at a later stage will be able to acquire a loan to invest in their off-grid SHS business Program 3 (Mini grids facility) The SREP fund will be used to implement this program Companies will be able to acquire a loan to invest in their off-grid mini-grids Program 4 (Grid-extension) Category 3 and 4 HH and Productive use areas. Continue to roll out the grid access program targeting mainly productive use areas

Investment Opportunities Off-grid Solar Market Potential 65% of Rwandans are in off- grid areas (about 1.2 million households) SREP funds to support the development of off-grid energy markets (cheap loan); The Result Based Finance (RBF) for mini-grid developers, offered by GIZ (a grant that covers up to 70%) Investment Opportunities Solar Energy Standalone solar home systems; Mini-grid solar projects with hybrid and storage solutions; Opportunity to set up a Manufacturing base facility of Solar Energy equipment Solar energy for irrigation and water supply. Power transmission & distribution Street lighting on all existing roads to be electrified and; New roads construction contracts to include street lighting; Development of different transmission and substation projects to achieve the 52% grid access from 27.3%

8% 1ST 3RD 1ST 7TH B+ B Reasons to Invest in Rwanda Renewable Energy Sustained economic growth Investor Friendly Climate 8% Average GDP growth for the last nine years (08-16) 1ST Ranked as the easiest place to do business in the EAC region 3RD Efficient Governance Ranked as the most competitive economy in Africa 1ST Africa’s most efficient government Access to Markets 7TH EAC CEPEGL COMESA 162 million 90 million 430 million Most efficient globally Stable Credit Ratings EU AGOA (USA) B+ Standrad & Poor‘s Outlook: Stable B Fitch Ratings Outlook: Stable

Investment Incentives Rwanda has an array of fiscal and non-fiscal incentives Fiscal Incentives Non-fiscal Incentives Zero Corporate Income Tax, for companies planning to relocate their headquarters to Rwanda Free repatriation of capital and assets Quick business and investment online registration Preferential corporate income tax rate of 15%, for investment in priority sectors or exporting at least 50% of the produce , in energy, transport, affordable housing, ICT and financial services Assistance with tax-related services and exemptions Accelerated depreciation rate of 50%, for the first year in key priority sectors, e.g. tourism, construction, manufacturing and agro-processing, education, health, telecommunication, energy and transport Assistance with access to utilities (water & electricity) Assistance with obtaining visas and work permits, EIA Exemption of capital gains tax, for any registered investor One stop center that provides notary services, migration, etc. Seven-year corporate income tax holiday, for export investments and projects over $50 million in tourism, health, manufacturing , ICT and Energy once generating 25MW and above Provision of aftercare services to fast-track project implementation Custom tax & duty exemption, for products used in Export Processing Zones (100% exports) Regardless of the origin of the investor, all business sectors are open to private investment

Challenges Opportunities Solar products available now can only penetrate 10% or so of the market, therefore affordability remains a major challenge. Access to cheap capital, fast and easily accessible working capital and consumer financing solutions. Solar companies need to build trust of customers and balance between customer acquisition and customer retention; Time is the biggest enemy for renewable energy projects to materialize. Projects currently take between 1-7 years to develop depending on country, business model and entrepreneur. Some companies demonstrated success in reaching higher levels of bottom-of-the-pyramid customers by providing a variety of product options. Successful renewable projects usually combines a tailor-made product with innovative financing solutions and strategic partnership to deliver the service/product. Networking and knowledge exchanges on the latest innovations of solar systems; Platform for companies/institutions to enter in collaboration/joint venture. For instance, Tiger power, Belgium concluded a Joint venture with Hobuka Ltd. to develop mini grids in Rwanda in the coming years. ISA and the Rwanda Energy Private Developers are working on an MoU to boost cooperation and enable off grid solar markets in Rwanda.

PROGRESS WITH ISA I. EXPECTATIONS FROM ISA: Facilitate the Access to long term and low cost finance from Financial Agencies; Facilitate information-exchange on various productive solar applications and solutions; Support in the promotion of local entrepreneuship and local assembly & manufacturing base of solar lighting Systems in Rwanda; Facilitate in mobilisation of solar compagnies from ISA network to participate in Rwanda Rural Electrification program II. NEXT STEP: Ratification of the Framework Agreement III. CONTACT DETAILS Local Point in India: Mr. Mucyo RUTISHISHA, 2nd Counsellor, High Commission of Rwanda (rwandahighcommission@gmail.com) Focal Agency in Rwanda: Mr. Robert Nyamvumba, Energy Division Manager, Ministry of Infrastructure (robert.nyamvumba@mininfra.gov.rw)