OFID’s $20 million loan will increase energy access in Rwanda

VIENNA, The OPEC Fund for International Development (OFID) has signed a US$20 million public sector loan agreement with Rwanda to increase access to energy for around 270,000 people in the Muhanga, Kamonyi and Gakenke districts.

Despite significant poverty reduction rates over the past decade, rural poverty in Rwanda is pervasive, owing to low access to public services, particularly power. The loan is expected to help nearly double the electrification rates in the three target districts. The electricity access rate in rural areas is about 15 percent, compared with about 76 percent in urban areas.

The government of Rwanda’s National Strategy for Transformation aims to make Rwanda among the first countries in Africa to achieve universal electrification.

The OPEC Fund’s loan contributes to the Rwanda Universal Energy Access project and is funded in partnership with the Saudi Fund for Development (SFD). Specific works include the installation of 520 transformers and 1,600 km of power lines. The project is part of a wider international multi-lender initiative in support of the government’s strategy.

The initiative has so far secured about US$670 million in financing from the World Bank, the French Development Agency AFD (Agence Française de Développement), the African Development Bank (AfDB) and the European Investment Bank (EIB), as well as from the SFD and the OPEC Fund.

OPEC Fund Director-General, Dr. Abdulhamid Alkhalifa, said, “The OPEC Fund supports Rwanda’s aim to become one of the first sub-Saharan Africa countries to achieve universal energy access, which is at the heart of its National Strategy for Transformation. The present project, when completed, will help stimulate economic growth and reduce poverty by boosting livelihoods and creating jobs, as well as improving the delivery of social services.”

OFID has supported development in Rwanda since 1976. During this time, more than $200 million in public sector finance (including the present loan) has been committed, primarily for transportation, water and sanitation, and energy, as well as to support businesses in sectors most affected by COVID-19.

Private sector lending of $25 million has also been extended in support of small- and medium-sized enterprises in Rwanda.

The OPEC Fund supports projects that align with the 2030 Agenda for Sustainable Development. The new loan contributes most directly to progress on Sustainable Development Goal 7: ensuring access to affordable and clean energy for all.

OFID was established in January 1976 by the then 13 member countries of OPEC; including the UAE. It is the development finance institution established as a channel of aid to developing countries.

 

Source: Emirates News Agency

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