Rwanda recently celebrated the opening of its first peat-fired power plant at Gishoma in the far west of the country, a $39.2M project. It is the first of its kind in Africa.
Another larger peat plant, costing $350M is under development in Gisagara to the east. The plan is for Gishoma to start feeding 15MW of electricity into the national grid imminently, and Gisagara 80MW by 2019.
The Rwandan government is hoping to achieve its goal of connecting 70% of the country’s 11.7 million people to the national grid by 2018. This is a near three-fold increase on the number connected at present. The peat-to-power plant at Gishoma will contribute to this goal, and further increase the installed capacity of the nation. This will reduce Rwanda’s reliance on expensive imports of diesel oil for power generation.
At the moment, only 25% of households have access to the 190MW of power generated in country. But over the next two years the capacity is projected to reach 563MW in line with national development goals. This increase will be made possible in part through the harnessing of power from peat.
Peat provides an effective energy source when dried, comprising a minimum of 30% organic matter. It develops under anaerobic conditions, where waterlogging significantly slows or prevents the decomposition of dead vegetation. As the vegetation grows in the surface layers, it absorbs atmospheric carbon through the process of photosynthesis. When it dies, this carbon is stored in the accumulating substrate which is peat.
Peatlands are found across the world. But they are concentrated within certain regions where high humidity or low temperatures reduce the rate of decomposition. These include the coastal lowlands of southeast Asia or northern Russia’s permafrost zones. Despite covering just 3% of the world’s ice-free land surface, peatlands store up to 30% of its total soil carbon stock. This makes them the most efficient carbon storage facility we have.
But arguably, not a renewable one. Though each peatland varies, one centimetre depth of peat may take an average of 10 years to accumulate, and less than 10 minutes to burn.
Rwanda energy mix
Rwanda’s energy comes from a diverse mix of renewable sources. Hydro-power is the main contributor at 59%, followed by thermal (40%) and methane (1%). There are also ambitious plans for off-grid power from solar.
Peat power is considered one of these more sustainable indigenous sources of energy. It has the potential to contribute nearly 20% to the national energy supply in five years’ time.
It’s estimated that there will be sufficient peat deposits to power Rwanda for 30 years, or some proportion of the country at least. The enhanced power that will come from the Gishoma and Gisagara peat-to-power plants is seen as an important part of the country’s development provision.
The plans are enabled through financial support from the African Finance Corporation, the Development Bank of Rwanda and Finnfund, the Finnish Development Finance Company, among other lenders. Finland has expertise in peat extraction and its use in the energy industry, with an average of 5% of its national supply coming from peat. This was encouraged by subsidies until recently.
But where is Rwanda’s peat?
The Gishoma plant is nestled within the Nyungwe Forest National Park. This is an
untouched natural rainforest that is filled with exciting biodiversity.
The park’s website boasts of the presence of hundreds of species of trees and orchids within the park, such as the swamp-dwelling Eulophia horsfellii. It’s also host to numerous plants species of medicinal value, like the East African satinwood, Zanthoxylum gilletii, and to one of the last stable populations of chimpanzees in East Africa. But there is no mention of peat. It’s evidently not a key feature for the average tourist.
There are vast areas of peatlands across the Tropics that we are only now starting to map and understand their full extent and carbon content. For example, it was only a few months ago that the first map of the world’s largest tropical peat complex was published. Around 145,500 square kms of peat swamp forest was found in the central Congo Basin.
There may well be vast resources of peat in Rwanda that local residents have known about for years, or that the Finns have sniffed out recently, of which science has yet to be told or be concerned about. But whatever the scenario defining the nation’s peaty asset and wherever it is exactly, it is unlikely to be there for much longer if peat-to-power generation continues to be Rwanda’s cost competitive energy solution.
Given that it takes thousands of years to accumulate just hundreds of centimetres of peat, is peat-power really the solution to the nation’s energy needs? Can the Elon Musk’s out there create an energy-storage solution quickly enough that renewables make a serious contribution?
For now though, Rwanda is set to power through its peat.
A US$350 million deal to finance an 80 megawatt (MW) peat to power project in Rwanda, which will improve access to electricity for the three quarters of the country's population that is currently off the grid, has reached financial close.
The power plant, which is expected to increase installed capacity in Rwanda by 40%, will utilise the Country's significant peat reserves to improve the national installed generation capacity. Despite its status as one of Africa's fastest-growing economies, only 25% of Rwanda's population currently has access to reliable electricity.
The plant is being constructed in the Mamba Sector of Gisagara District, one of the most remote areas in Rwanda, and is expected to be completed within three years.
The Africa Finance Corporation is the Mandated Lead Arranger for the project debt, and has successfully arranged total senior debt facilities of US$245 million, contributing US$75 million in loans and providing an underwriting commitment of US$35 million.
Finnfund, a Finnish Development Finance Company, served as the lead arranger for total mezzanine debt facilities of US$35 million for the project. The other lenders are Eastern and Southern African Trade and Development Bank(TDB), African Export-Import Bank (Afreximbank), Export-Import Bank of India, and Rwanda Development Bank (BRD).
The project is sponsored by Hakan Madencilik A.S - an energy company from Turkey, and Quantum Power - a power and energy infrastructure investment platform. Themis Infra, an infrastructure development firm, is the Project Development Manager.
Andrew Alli, CEO of AFC, commented on the announcement: "The move from costly external imports of fuel to more sustainable indigenous sources of energy such as peat will reap great rewards for Rwanda, not just in terms of the significant savings in foreign exchange hitherto used in importing expensive diesel oil for power generation, but also the positive economic and social benefits of providing more cost effective power for businesses and industries, as well as more affordable power for the people".
"AFC prioritises investing in projects that will have significant advantages for the local community, which this plant will. It will also make a huge contribution to powering Rwanda's economic growth in the future, in line with the government's objectives."
Rwanda aims to provide 70% of its 12 million people with power from the grid or off-grid by 2018, and the country intends to become a lower middle-income country by 2020