ISSUE 01 MAY 2013 IMPACT this issue Lessons from a Sector-Wide Approach (SWAp) RWANDA SWAp ACHIEVEMENTS Households Connected ESMAP Helps Triple Electrification Rates 2008: 110,000 2012: 357,000 in Rwanda Rwandans Connected With a chronically low national electrifica- impacts of the energy SWAp were immediate 2008: 6% tion rate and a dilapidated energy infra- and widespread. By September 2012, 16 2013: 16% structure, the government of Rwanda percent of Rwandans had access to the grid faced a steep uphill battle when in 2008 and the Rwanda Energy Corporation (RECO) New Connections it committed to triple household electricity was connecting 100,000 new households a 2008: 23,000 access over a mere five-year period. year, a four-fold increase over the 2008 con- 2012: 100,000 nection rate. At the time, only 6 percent of Rwandans— Cost per Connection roughly 110,000 households mostly concen- Edward Kasumba, Coordinator of Electricity 2009: US$ 1,000 trated in and around the capital, Kigali—were Access Rollout with Rwanda’s Energy Water Sept 2012: US$ 840 connected to the grid. and Sanitation Authority, said the benefits of 2013: US$ 600 (target) the SWAp were far reaching. Barely three years later the number of grid- Kilometers of New connected households had more than tripled “Schools that never before had computers Network Connected to 357,000—an increase which exceeded the were connected to the internet—which is a 2012: 1,000 km government’s ambitious original five-year very great achievement in remote areas—and target. hospitals and health centers that had been unable to afford fuel for their generators were ESMAP laid the groundwork for this rapid able to operate equipment that had been sit- extension of grid electricity by helping devel- ting unused.” op a national rollout plan using a Sector Wide Approach (SWAp) for the energy sector. The The SWAp concept emerged in the 1990s as “GIS helped us map out exactly where the demand would be greatest and determine the most economical way to reach as many Rwandans as possible.” “Schools that never Dana Rysankova before had comput- Senior Energy Specialist, ers were connected World Bank Africa Region to the internet— which is a very an alternative to traditional aid. The approach rallies donors and stakeholders around a set of clearly great achievement defined goals and is marked by strong country ownership, low transaction costs, and a flexibility that in remote areas— provides partners with the option to invest in specific sub-sectors. and hospitals and health centers that The Rwanda energy SWAp was launched in July 2008 with the establishment of an Energy Sector had been unable to Working Group (SWG) and the signing of a Memorandum of Understanding between the Rwandan government and its senior development partners, including the World Bank, the African Development afford fuel for their Bank, the European Union, the Netherlands, and Belgium. generators were able to operate Over the following six months ESMAP— through the World Bank’s Africa Renewable Energy and Ac- equipment that had cess Program (AFREA)—provided funding and technical assistance to the SWG to operationalize the SWAp framework. This assistance included help in producing an investment prospectus which outlined been sitting un- the SWAp’s targets and detailed how they could be met through coordinated donor financing. used.” Edward Kasumba Erik Fernstrom, a Senior Energy Specialist with the World Bank’s Africa Region Energy Unit, said a key first step in determining the parameters of the SWAp involved making a fundamental determination. Coordinator of Electricity Access Rollout with “We needed to decide which parts of the country would receive immediate electrification and which Rwanda’s Energy Water would have to wait, because even if the SWAp achieved its initial targets, millions of Rwandans would and Sanitation Authority remain off the grid for years to come.” To identify the physical locations and least-cost electrification options to be contained in the investment prospectus, the SWG deployed a range of sophisticated GIS-based spatial planning techniques that had previously been used in successful ESMAP-supported projects in Kenya and Senegal. In what was the first time GIS was used in Rwanda, engineers fanned out across the country with hand -held devices mapping population density and areas of economic activity. They also marked the loca- tion of every school, health clinic, and administrative center, as connecting these important hubs to some form of electricity was a primary government objective. Dana Rysankova, a Senior Energy Specialist with the World Bank’s Africa Region, said the GIS data was to form the backbone of the investment prospectus. IMAGES “GIS helped us map out exactly where the demand would be greatest and determine the most econom- All images courtesy of the ical way to reach as many Rwandans as possible.” Energy Access Rollout Project. Mr. Fernstrom said that ensuring the financial sustainability of an To reduce the need for costly domestic re-wiring—and to enable expanded electricity network was another important consideration. households in dwellings not previously eligible for a connection, As such, the SWG assessed the ability of the population to afford such as thatched houses or temporary constructions—the program basic connectivity charges by measuring household income and supported initiatives to mainstream the use of low-cost ready expenditure data. It was found that despite Rwanda’s low-income boards. levels, some 370,000 households would be willing and able to pay the cost of grid connection and recurrent charges. With customer numbers set to triple, the plan provided support for the RECO to extend its service network to new areas. This would The completed investment prospectus was distributed to donors in include establishment of new customer service centers and pro- early 2009 and formally unveiled at a Donor Financing Roundtable curement of equipment and vehicles for improved maintenance held in Kigali in March of the same year. and reduced customer-complaint response times. The prospectus outlined a practical, well targeted and least-cost In terms of financing, the investment prospectus outlined a ‘10-10- SWAp mechanism designed to achieve Rwanda’s near-term elec- 80’ “Shared Financing Plan” by which the cost of SWAp energy trification goals at a cost of US$ 250 million. The plan identified sector interventions would be met through affordable customer clear roles, was in sync with the government’s economic develop- charges (10 percent), government funding (10 percent), and contri- ment and poverty reduction targets, and put in place a technical butions from development partners (80 percent). assistance program to ensure quality control, transparent alloca- tion, and efficient procurement processes. The Donor Financing Roundtable concluded with a pledging ses- sion at which eight development partners pledged US$ 228 million To maximize coverage and minimize program costs, the invest- to implement the Rwanda energy sector SWAp. ment prospectus focused primarily on communities located close to the current network—over 95 percent of the proposed new con- This included US$ 70 million in zero-interest financing from the nections were within five kilometers of the existing grid—and cen- World Bank’s International Development Association, the conces- tered on densely populated areas such as Kigali and urban areas sional loan and grant-making arm of the World Bank Group. Pledg- in the northeast of the country. es were also announced by the Government of Rwanda, RECO, and major donors such as the African Development Bank, the Arab Wherever possible, SWAp financing would rehabilitate and im- Bank for Economic Development in Africa, Belgium, the European prove existing infrastructure and ensure that new construction inte- Union, the Netherlands, Japan, the OPEC Fund for International grated low-cost technologies and took advantage of renewable Development and the Saudi Fund. energy sources. Implementation of the SWAp began in mid-2009, and little more The plan reflected the government’s target of connecting every than three years later the sector-wide approach had transformed school, health clinic and administrative center with electricity either Rwanda’s energy sector. through a grid connection or, in remote areas, through solar PV units or transmission lines running to mini-hydro stations. As of early 2013, more than 1,000 kilometers of transmission cable had been added to the existing grid. A total of 509 primary and secondary schools had been connected to electricity, along with 125 health facilities and 81 administrative offices. Additionally, more than 57,000 households—representing 27 percent of all domestic con- nections—were using energy efficient CFLs that had been provided under the SWAp as part of a “welcome package” to newly connected households. The cost per connection—which stood at US$ 1,000 in 2009—had dropped to US$ 840 by September 2012 and was expected to decrease further by the end of 2013. Mr. Kasumba said the SWAp had brought a new vitality to many far-flung areas. “On the economic side, we’ve seen that business centers are able to work into the evening and night and that shops and markets are able to use refrigeration to keep their produce ESMAP fresh.” MISSI ON Paul Baringanire, the World Bank’s Task Team Leader for the SWAp, said the project has had a transformational impact on local economies throughout the country. The Energy Sector Manage- ment Assistance Program “The Energy SWAp has created new employment opportunities and helped small- and medi- um-sized businesses develop—both of which are key to poverty reduction,” (ESMAP) is a global Mr. Baringanire said. knowledge and technical as- sistance program adminis- “These impacts became clearly visible just a few months after areas were electrified,” he tered by the World Bank. It added. provides analytical and advi- Mr. Fernstrom said the SWAp framework had struck the right balance between ambition and sory services to low- and achievability, providing donors with a practical roadmap illustrating how Rwanda’s electrifica- middle-income countries to tion targets could be attained by realistic financing and implementation measures. increase their know-how and When implemented, Mr. Fernstrom said, the program demonstrated the catalytic power that institutional capacity to can be unleashed when development partners are given the opportunity to rally around a achieve environmentally sus- collective goal. tainable energy solutions for poverty reduction and eco- “The SWAp became a collective juggernaut that brought us all to a shared outcome,” he said. nomic growth. ESMAP is funded by Australia, Austria, Denmark, Finland, France, Germany, Iceland, Lithuania, the Netherlands, Norway, Sweden, and the United King- dom, as well as the World Bank. IMPACT Issue 01 May 2013 The World Bank 1818 H Street, NW Washington, DC, 20433 USA www.esmpa.org esmap@worldbank.org