VZCZCXYZ0007
RR RUEHWEB

DE RUEHLGB #0737 2290815
ZNR UUUUU ZZH
R 170815Z AUG 07
FM AMEMBASSY KIGALI
TO SECSTATE WASHDC 4518

UNCLAS KIGALI 000737 
 
SIPDIS 
 
DEPARTMENT FOR AF/C 
DEPT OF COMMERCE WASHDC 
DEPT OF ENERGY WASHDC 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV ENRG ETRD EPET BTIO RW CG
SUBJECT: Methane Development Continues Despite Disputes 
 
REF:  04 KIGALI 218 
 
¶1. SUMMARY.  Lake Kivu still contains hope for Rwanda to solve one 
of the biggest obstacles to its development - the unreliability and 
high cost of energy in the country.  The GOR partnership and 
concession granted to Dane Associates has been dissolved, but 
several other companies have appeared to continue the efforts. 
Rwanda estimates that there is at least a 350 megawatt (MW) 
potential for the lake andQ limiting individual concessions to 50 
MW.  END SUMMARY. 
 
¶2.  While the partnership between Dane Associates and the GOR, 
called Kibuye Power 1 (KP1), has been dissolved by Rwandan courts, 
work continues with the original technical sub-contractor - Ludan 
from Israel.  The GOR has taken over complete ownership of KP1 and 
plans to produce 5MW of electricity through the methane conversion 
process pilot project by the end of the year. 
 
¶3.  The Rwanda Energy Company (REC), owned 60% by the Rwandan 
Investment Group (RIG) and 40% by ECOENERGY of Kenya is working on a 
4 megawatts (MW) pilot methane project in Gisenyi.  REC has hired 
the South African engineering firm Philip Merkel and expects to 
produce power by July 2008.  Upon successful completion of the pilot 
project, REC will be awarded rights to the full 50MW concession. 
With an estimated 350 MW maximum capacity for energy produced from 
methane on the Rwandan side of Lake Kivu, the GOR set each 
individual concession to no more than 50MW. 
 
¶4. REC also contracted French scientist, Professor Michel Harbouach, 
to develop a 3MW project.  Harbouach was very involved in the 
identification of the potential held by methane in Lake Kivu, but 
was never granted concessionary or contractual rights to the Lake. 
An expert in the field, he examined Cameroon's Lake Nyos catastrophe 
in which poisonous gas released from the lake killed many lake 
dwellers.  Harbouach produced some of the original feasibility 
studies and reports on extracting methane from Lake Kivu.  In fact, 
Harbouach's original proposal addressed the environmental risk that 
the gas poses to the surrounding area.  He argues that extracting 
methane from the Lake Kivu is necessary to prevent a disaster 
similar to Lake Nyos's carbon dioxide explosion. 
 
¶5. Additionally, W&S Beteilingungs AG from Germany applied for 
concessions to convert Kivu methane into electricity, but the GOR 
has not yet approved their request. 
 
¶6.  COMMENT.  Often described as Rwanda's natural treasure, the 
methane in Lake Kivu looks more and more promising to international 
companies and investors.  While the GOR must be vigilant to not let 
the scramble over the highly prized concessions delay the production 
of the much needed electricity, it must also ensure that it has 
clearly defined plans for several more mundane, but as of yet, 
ignored issues.  For example, how to connect the electricity to the 
national grid and how to create power purchase agreements with each 
company.  Each of these issues awaits negotiated solutions, and are 
crucial to the actual production and use of methane-generated 
electricity for Rwanda's cities and towns. 
 
ARIETTI