Home Energy Opportunities

Opportunities

  • 400 KW plant on the Gaseke tributary of the Mukungwa River 15 km south of Ruhengeri and 8 km north of Shyira Hospital, currently under construction

  • $1.5 million total investment

  • $490,000 GTZ grant

  • $230,000 shareholder investment

  • Loans of $740,000 ($340,000 secured; $440,000 remaining to be financed)

  • 2 MW plant on the Mukungwa River half way between Ruhengeri and Shyira Hospital

  • $3 million initial investment (less per MW than above because of site and fixed costs (including Electrogaz connection) already covered by the development of SOGEMR for the first project)

  • Subsequent investment in additional capacity as possible by available flows, increasing to 3 to 5 MW

  • Further investments in distribution grid could be financed out of sales to Electrogaz grid

  • 3 MW plant on the Giciye River, 3 km east of the hospital

  • $7 million investment

  • Potential to refurbish to existing sites (Nyamotsi I and II to increase power production and link to national grid)

  • Potential for two other sites on the Mukungwa River not currently listed in the BTC Hydropower Atlas

  • 1 MW site at Satinsyi tributary of the Mukungwa River

  • 1 MW site on Ruhagabaga tributary of the Mukungwa River

  • Additional sites possible on other local tributaries

  • No persons displaced - no resettlement required

  • All water returned to same downstream source - minimal environmental impact

  • Portion of retained earnings to be managed for

  • Grid expansion

  • Fostering local enterprise

PEACE Power & Light may be one of the investors in Amahoro Energy, S.A. In this case, all revenues from PP&L’s share of profits to be directed to surrounding communities including:

  • Health development including HIV/AIDS care, community health outreach, and care of rural poor

  • Education

  • Care of vulnerable populations

  • Surrounding community economic development

Rwandan Government Issues

  • Ministry of Infrastructure (MININFRA) is closely involved in development of sites

  • Regulations involving public or private sale of energy to Electrogaz have been developed, including price of 70 RWF = 13¢ per KWh wholesale.

  • A new agency, RURA, is now to take over such negotiations in order to avoid potential conflicts of interests (Electrogaz negotiating its own rates). MININFRA leaders have discussed a goal rate of return of 20% for investments, but the total ROI to the individual investor may be higher because of the leverage of investments using borrowed funds from the U.S. at favorable rates.

Philanthropic Investment: “PEACE Power & Light (PP&L)”

Contributions to PEACE Power & Light—Rwanda may be directly designated for specific projects. These include programs for handicapped children, assistance for orphan education, help for those with chronic illnesses like diabetes, and capital projects at Shyira Hospital and surrounding schools, including biogas production, solar hot water, Internet access and information technology enhancement. In addition, contributors may designate funds for investment in Amahoro Energy, S.A.

An overseas investor, for example, might not be interested in purchasing personal equity in AmEn, S.A., but may contribute funds to enable an investment on behalf of PP&L. For instance, a contribution of $1,000 might cost the donor, depending on marginal federal and state income tax rates, on the order of $600. This $1000 would be pooled with other contributions to make up a significant portion of AmEn, S.A.’s total equity. If these investments provide a 20% return per year, then a donation which cost the donor, in this case, $600 would produce an annual yield of $200 as long as the project remained (hydropower plants may have a project life >50years). The annual dividends could then be used to subsidize the projects of PEACE Power & Light (PP&L) in a sustainable fashion. In effect, PP&L would be one of the investors in Amahoro Energy and, like other investors, would have an interest in the company’s profitability. The retained earnings would be distributed according to the directives of the board of PP&L, with the goal of helping, in particular, the population near the power sites.

Investment Structure

The proposed sites may be developed with a combination of private and philanthropic investment. As an example, the following investment structure is proposed:

  • Investor capital: (e.g. 1/3 US capital, 1/3 philanthropic investment, 1/3 Rwandan investors)

  • Grants from GTZ/EU

  • Commercial loans, including subsidized loans, e.g. OPIC

The advantage of the above-proposed structure is that each group complements the other for the social good of the projects. The US investors help organize the project financing at interest rates unattainable in the local capital market. The Rwandan investors (these include Shyira Hospital, which as a consumer of the power and also a neighbor has a vested interest which will help ensure stability) provide more oversight given their proximity to the investment, ensure long-term stability, and enhance negotiations for regulation, rates, etc. The philanthropic investment provides long-term returns for sustainable regional assistance.