Rwanda can scale-up energy efficiency while accelerating energy access

Countries across Sub-Saharan Africa are grappling with the challenges of expanding energy access while addressing climate change. As efforts accelerate to expand access to electricity to more people in the region, adopting energy efficiency measures upfront would help avoid locking-in inefficient energy consumption.

Rwanda, a country that has remarkably expanded electricity access from just 6% in 2009 to over 75% as of March 2024, has set its focus on energy efficiency at a crucial juncture in its path toward achieving Sustainable Development Goal 7 (SDG7) of providing access to affordable, reliable, sustainable and modern energy for all.

By prioritizing energy efficiency early on, Rwanda can reap significant economic and environmental benefits and ensure the adoption of efficient technologies and development approaches. In our recent report “Energy Efficiency Potential Assessment for Rwanda", prepared in collaboration with the Ministry of Infrastructure (MININFRA), estimates show that Rwanda could potentially reduce electricity consumption by about 22% by adopting energy efficiency measures in different sectors.

The interventions create an estimated investment opportunity of over $91 million and could result in saving $25 million annually in reduced power generation and purchase costs, offering an attractive payback period of just over three and a half years. This offers a compelling opportunity for reducing the necessary fiscal support to the power sector and attracting private sector investment in energy efficiency interventions.

End user energy savings potential

Note: The sector-wise annual electricity savings potential has been estimated based on energy audit reports from across the world. A range of minimum and maximum savings potential has been considered for each sector. The table presents only the electricity savings potential. Other forms of energy have not been covered due to data limitations. Source: Energy Efficiency Potential Assessment for Rwanda.

However, crucial sector gaps need to be addressed to leverage these investments and realize efficiency gains. We’ve identified the following areas for improvement:

1. Regulations, incentives, and financing mechanisms: While there exist certain strategies related to energy efficiency – such as the National Cooling Strategy – absence of regulations for demand-side management, concrete fiscal incentives, and dedicated and stable public funding sources creates barriers to launching energy efficiency measures at scale.
2. Agency coordination:  At present, Rwanda does not have a dedicated energy efficiency agency to coordinate, appraise, and implement energy efficiency-related activities at the national level. This results in a lack of vision and coordinated action.
3. Technical capacity: Engaging effectively in the energy efficiency market requires strong technical capacity. The shortage of energy service companies in Rwanda necessitates government support for implementing pilot projects for new technologies. This, in turn, would require enhancement of technical capacity in the public sector, including at MININFRA and the Rwanda Energy Group (REG).
4. Data and information on energy consumption: Paucity of granular data for various economic subsectors hinders effective planning. A comprehensive and reliable energy data and information system is recommended to monitor final energy consumption by various end users in the country.

To address the identified gaps, the report proposes a comprehensive roadmap for implementation of energy efficiency measures in Rwanda through policy, institutional, and financing interventions, including:

• Mainstreaming energy efficiency principles across policy and regulatory frameworks by incorporating the National Cooling Strategy in building codes and developing specific energy efficiency regulations, including minimum energy performance standards for prominent products, energy audits for buildings and industries, guidelines on demand-side management and regulations on setting up energy service companies.
• Strengthening the institutional setup for energy efficiency programs in Rwanda by establishing an independent statutory body within MININFRA or REG for the development of energy efficiency policy and strategy, and the creation of a dedicated autonomous implementing agency for energy efficiency that reports directly to MININFRA.
• Promoting energy efficiency financing (including private sector investments) through the introduction of energy efficiency financing windows, establishment of dedicated energy efficiency funds, implementation of pilot projects, and establishment of reliable energy data and information systems.

The energy efficiency roadmap for Rwanda is serving as a foundation for the World Bank and other development partners to assist the Government of Rwanda in scaling up energy efficiency interventions. Getting these interventions right will help set Rwanda as an example in the region for incorporating energy efficiency measures while rapidly expanding electricity service delivery.

The assessment was financed by Italy’s Ministry of Environment and Energy Security through the Single Donor Trust Fund “AGREED,” which is administered by the World Bank.