VZCZCXYZ0001
PP RUEHWEB

DE RUEHLGB #0417/01 1681446
ZNR UUUUU ZZH
P 161446Z JUN 08
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC PRIORITY 5385
INFO RUEHDS/AMEMBASSY ADDIS ABABA 0170
RUEHRL/AMEMBASSY BERLIN 0055
RUEHBS/AMEMBASSY BRUSSELS 0241
RUEHJB/AMEMBASSY BUJUMBURA 0329
RUEHDR/AMEMBASSY DAR ES SALAAM 1144
RUEHKM/AMEMBASSY KAMPALA 1912
RUEHKI/AMEMBASSY KINSHASA 0464
RUEHLO/AMEMBASSY LONDON 0247
RUEHNR/AMEMBASSY NAIROBI 1240
RUEHFR/AMEMBASSY PARIS 0508

UNCLAS KIGALI 000417 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PASS DOC JSULLIVAN 
DEPARTMENT PASS USTDA NGAZZETTA 
DEPARTMENT PASS OPIC JFLEWELLING 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ENRG EPET ETRD PGOV KIDE OPIC
RW 
SUBJECT: RWANDA ENERGY REVIEW - ENERGY INDEPENDENCE BY 
2015? - 
 
¶1. (U)  Summary:  With economic development strangled by the 
high cost of imported energy, the Government of Rwanda (GOR) 
has embarked on an ambitious plan of domestic energy 
independence maximizing use of alternative energy sources. 
The government is aggressively promoting hydroelectric power 
and development of technologies to use methane gas from Lake 
Kivu for power generation and production of synthetic fuels. 
Geothermal energy, solar power, peat and biogas energy are 
also being explored as possible energy sources.  Recent 
breakthroughs in methane gas extraction and construction of 
new hydroelectric projects promise to provide Rwanda with 
energy independence by 2015.  End summary. 
 
¶2. (U) Diesel thermal generators currently provide over 55 
percent of Rwanda's 65MW minimum power needs.  The GOR was 
forced to turn to rented thermal generators in 2002-2004 when 
four hydroelectric plants, constructed between 1959 and 1985, 
failed due to drought and poor maintenance.  The high cost of 
petroleum (which has doubled over the last year) is 
compounded by the unreliability and expense of transporting 
diesel by truck from Kenya via Uganda or from Tanzania.  With 
Rwandan electricity costs now the highest in the region, 
existing businesses are struggling to remain competitive and 
new investors are turning away discouraged by high energy 
costs.  Niobium Mining Company in Kigali discontinued tin 
smelting operations in 2006 due to expensive and unreliable 
energy supply, according to management. 
 
Land of a Thousand Hydro Plants 
------------------------------- 
 
¶3. (U) The GOR has responded by aggressively promoting new 
hydroelectric projects and exploring other alternative energy 
sources.  Although hydroelectric energy is sensitive to 
drought, Rwanda's hilly geography (the country is known as 
"the land of a thousand hills") is favorable to hydro 
exploitation and during normal rainfall conditions it is the 
most economical source of energy available to the country. 
New hydroelectric facilities under construction at Nyabarongo 
and Rukarara are expected to generate 37MW of power by 2012. 
Feasibility studies are also underway at three additional 
sites at Rusomo and Rusizi that could provide up to 320MW of 
power.  Efforts to promote micro-hydro power production are 
well-advanced.  The GOR has identified 333 potential sites 
with a total potential of 100MW.  Twenty-one of these 
projects have been funded and are expected to add 13MW to the 
national grid by 2010. 
 
Methane: Use it Before it Kills You 
----------------------------------- 
 
¶4. (U) On May 15th, a government funded $15 million pilot 
project extracted and "flared" methane gas from Lake Kivu. 
This is the first time this extraction technology has been 
successfully tested anywhere in the world.  Lake Kivu has 
estimated reserves of 55 million cubic meters of methane gas 
trapped below 400 feet.  The methane has been slowly 
accumulating at the bottom of the lake over thousands of 
years.  Scientists say that if the methane is not vented it 
could burst to the surface releasing a poisonous cloud 
(similar to the one that erupted from Cameroon's Lake Nyos in 
Q(similar to the one that erupted from Cameroon's Lake Nyos in 
1986 killing 1,700 people).  The GOR estimates Lake Kivu's 
methane reserves could yield up to 350MW of energy annually 
to Rwanda for the next 50 years.  When completed next month, 
a small power plant connected to the pilot project will use 
methane to generate 5MW of power for the national grid.  By 
2012, the government believes methane-to-power production 
will reach 80MW. 
 
¶5. (U) Investors are now scrambling to sign methane 
concessions with the GOR.  American company Contour Global is 
near to signing a concession for a 100MW gas-to-power 
facility in Kibuye, local Rwanda Investment Group (RIG) is 
also negotiating a 100MW concession in conjunction with the 
Agha Khan foundation in Kenya, and a German group (W&S) hopes 
to sign a 50MW concession with the GOR within the next 6 
 
months.  Additionally, a number of investors including the 
U.S. Rwanda Energy Company are bidding on a gas-to-liquid 
(GTL) project producing up to 2,000 barrels daily of 
synthetic diesel and/or aviation fuel produced from methane 
gas. 
 
Geothermal: There's Energy in Them There Hills 
--------------------------------------------- - 
 
¶6. (U) Based on studies conducted by the U.S Geographical 
Energy Association and the French Bureau de Recherce 
Geologique et Minieres (BRGM), the World Bank believes 
Rwandan geothermal resources could potentially provide 
150-300MW to the Rwandan national grid.  The German 
government is currently funding a geo-scientific assessment 
to evaluate the geothermal power generation potential in 
northwest Rwanda between the Virunga national park and the 
Lake Kivu town of Gisenyi.  The Kenya Electricity Company is 
also exploring geothermal opportunities in Cyangugu 
(southwest Rwanda) and hopes to sign an MOU with the GOR this 
year to drill exploratory production wells. 
 
Solar: It's Free if You Can Afford the Technology 
--------------------------------------------- ---- 
 
¶7. (U)  In June 2007, German company Stadtwerke Mainz AG, 
inaugurated the first phase of a 250KW solar power plant on 
Mount Jali just outside Kigali.  The solar plant, the largest 
in Africa, uses American photovoltaic technology and will be 
expanded in several phases to produce up to 1MW of 
electricity.  Engineers from Stadtwerke Mainze explained the 
Rwandan climate is favorable to solar power and noted the 
Mount Jali facility is 40 percent more efficient than similar 
facilities in Germany.  Until now, the high cost of solar 
power plants relative to output has been a disincentive to 
larger solar energy facilities.  However, rising petroleum 
costs and the declining cost of photovoltaic cells could make 
this technology more attractive in the near future. 
Stadtwerke Mainze hopes to use the facility on Mount Jali as 
a model to implement smaller scale solar energy projects in 
rural areas (outside the national electrical grid) to provide 
power to schools, health and administrative centers. 
 
Biogas and Peat: Great for Cooking 
---------------------------------- 
 
¶8. (U) Rwanda has estimated reserves of 155 million tons of 
peat which the government hopes can be exploited for use in 
heavy industry and as an alternative cooking fuel.  The 
largest Rwandan cement factory - Cimerwa located in Cyangugu 
- is in the process of converting its equipment to use peat 
as an energy source and expects to be 80 percent dependent on 
peat energy by October 2008.  RIG is also evaluating a 
project to compress peat into briquettes as an alternative to 
charcoal for domestic cooking needs. 
 
¶9. (U) Households constitute the largest energy consumers in 
the country and about 95 percent of household energy demand 
is met by biomass (typically wood and charcoal).  This has 
contributed to the over-exploitation of forests and resulted 
in a reduction of natural forest cover by two thirds since 
the 1950's.  In addition to using peat as an alternative 
cooking source, the GOR is promoting the use of biogas.  With 
Qcooking source, the GOR is promoting the use of biogas.  With 
the support of the Dutch and German governments, the GOR is 
implementing a National Domestic Biogas Program (NDPE) which 
will distribute 15,000 biogas digesters to rural households 
by 2011.  The biogas digesters fed by animal and human waste 
will provide rural households with a renewable supply of 
biogas for cooking and lighting. 
 
¶10. (U)  Comment:  Rwanda's Economic Development and Poverty 
Reduction Strategy (EDPRS) sets a clear roadmap to expand 
energy diversification, security and domestic access.  Under 
the plan, the GOR hopes to increase installed power 
generation capacity from 60MW to 165MW by 2012.  While this 
power generation is relatively small scale, it will help 
 
satisfy the country's short-term energy needs.  The GOR 
appears to be well-positioned to achieve this goal and could 
well surpass it.  If energy projects in the pipeline are 
realized, Rwanda could be energy independent by 2015. 
ARIETTI