Rwanda is poised to harness its potential for development by focusing on the productive use of energy (PUE), according to a recent World Bank report titled "Energizing Rwanda’s Development: Opportunities and Strategies for Catalyzing Productive Use of Energy." The report suggests that adopting modern energy technologies could significantly boost productivity and economic growth in the country.
This initiative aligns with the World Bank's Mission 300, which aims to provide sustainable energy access to 300 million people in Africa by 2030. However, challenges such as affordability barriers and a developing market currently hinder widespread adoption of these technologies.
The report emphasizes that PUE technologies can transform Rwanda’s economy by reducing inefficiencies and creating income-generating opportunities. With initial funding and strategic policies, Rwanda can initiate a cycle of development that empowers communities while promoting sustainable growth.
The report identifies four key PUE technologies with high potential for immediate and long-term growth: solar water pumps, solar-powered refrigerators, electric motorcycles, and electric pressure cookers. These technologies are seen as crucial for achieving sustainable energy access.
Currently, only 8.1% of small-scale farmers use irrigation, with just 2% utilizing machine-powered solutions like solar water pumps. While there are around 100,000 refrigerators in use across the country, the adoption rate for solar-powered models remains low. Electric motorcycles offer a sustainable transport alternative but face similar challenges in adoption. Electric pressure cookers have an adoption rate of just 0.19%, yet they hold significant promise for households and institutions.
Pilot tests have shown substantial economic benefits from these technologies, with internal rates of return ranging from 17% for solar pumps to 45% for electric pressure cookers. The short-term market investment potential is estimated at $152 million, expanding to $243 million over time.
To fully realize the potential of PUE technologies, the report recommends a three-pronged approach:
1. Strengthening the Market:
- Access to Finance: Affordable working capital is essential for suppliers to build retail networks nationwide.
- Consumer Support: Flexible repayment terms can help consumers overcome affordability barriers.
- Awareness Campaigns: Promoting PUE through targeted demonstrations is crucial.
2. Enabling Policies and Collaboration:
- Policy Reform: Reducing import taxes and adjusting electricity tariffs are necessary steps.
- Cross-Sector Coordination: Collaboration between ministries and private sectors is vital.
3. Dedicated Funding:
- A funding facility is needed to break market entry barriers for high-potential PUE technologies.
The study was funded by the World Bank’s Energy Sector Management Assistance Program (ESMAP), which works with over 20 partners globally to promote sustainable energy solutions in low- and middle-income countries.