Powering Rwanda’s Future: Unlocking the Potential of Productive Use of Energy

Rwanda is poised to leverage energy access for economic and social transformation, as highlighted in the report "Energizing Rwanda’s Development" by the World Bank and SEforALL. Key technologies, including solar water pumps, refrigerators, electric motorcycles, and pressure cookers, hold significant potential to catalyze economic growth. However, high costs, limited supply chains, and a lack of awareness are barriers to widespread adoption. The report calls for targeted subsidies, policy support, and strengthened supply chains to unlock the full potential of these technologies.

Rwanda, known for its ambitious growth goals, is now positioning itself to tap into its energy resources to fuel economic and social transformation. A recent report by the World Bank and Sustainable Energy for All (SEforALL), titled “Energizing Rwanda’s Development: Opportunities and Strategies for Catalyzing Productive Use of Energy,” sheds light on the nation’s progress and potential for leveraging energy to drive productivity and development.

The Drive Towards Universal Energy Access

Rwanda has been a beacon of progress in Africa, boasting a GDP growth rate exceeding 8 percent annually — nearly twice the average for Sub-Saharan Africa. Despite being a relatively small and densely populated country, Rwanda aims to shift from an agricultural-based economy to one driven by industry and services. A key part of this transformation hinges on expanding access to electricity and harnessing it for productive uses that stimulate economic growth, create jobs, and enhance the livelihoods of its citizens.

The report highlights that Rwanda has already achieved a remarkable 61 percent electrification rate, with 47 percent of the population connected to the national grid and 14 percent relying on off-grid solutions. With ongoing support from development partners, the government’s focus is now shifting towards leveraging this electricity access for productive use to catalyze further economic development.

High-Potential Technologies Leading the Charge

To identify the most promising technologies for boosting productivity, the report conducted extensive research across various sectors and engaged with a diverse range of stakeholders. Four key technologies emerged as having high potential to transform the socio-economic landscape,

Solar Water Pumps (SWPs): These pumps have been shown to significantly reduce operating costs for farmers and boost agricultural productivity by ensuring a reliable and affordable water supply. This technology could empower small-scale farmers and reduce dependence on costly diesel pumps.

Refrigerators and Cold Storage: These technologies are crucial for preserving food and reducing post-harvest losses, which currently stand at nearly 40 percent. Cold storage solutions can also improve the quality of perishable goods, making them more marketable and contributing to food security.

Electric Motorcycles: The shift to electric vehicles is seen as a game-changer for Rwanda’s transport sector. Electric motorcycles, in particular, present a more affordable and sustainable alternative to conventional fuel-powered bikes, with the potential to lower emissions and reduce the nation’s reliance on imported fuel.

Electric Pressure Cookers (EPCs): EPCs are another innovation with the potential to revolutionize both household and commercial cooking by reducing cooking times and lowering fuel costs. With biomass still being the primary source of energy for cooking, the adoption of EPCs could significantly cut down on deforestation and indoor air pollution.

The report estimates that by 2034, the total addressable market (TAM) for these high-potential technologies could reach over US$856 million, up from US$715 million in 2024. However, unlocking this market potential requires more than just technological availability — affordability and accessibility must be prioritized.

Barriers Hindering the Path to Progress

While the outlook is promising, several barriers need to be addressed to unlock Rwanda’s full potential in the productive use of energy. One major challenge is the high cost of these technologies, making them inaccessible to smallholder farmers and small businesses. Even with subsidies and tax exemptions, upfront costs remain prohibitive for many.

In addition, the supply chain for PUE technologies in Rwanda is still nascent. Many suppliers are unable to maintain adequate inventory levels due to limited access to affordable credit. This not only leads to higher prices for end-users but also delays in product delivery and installation.

Moreover, there is a lack of awareness and understanding among potential users regarding the economic benefits of adopting these technologies. As a result, uptake remains slow, and the market has yet to reach its full potential.

The report also highlights the challenge of high electricity tariffs, which can deter investment in electric appliances for productive uses. For small businesses, the cost of electricity is a major operating expense, reducing the financial viability of such investments.

Recommendations: Charting the Way Forward

To overcome these challenges, the report proposes a multi-pronged strategy that includes financial, technical, and policy interventions,

Dedicated Funding and Subsidies: Implementing targeted subsidies and providing affordable financing options will be crucial to making PUE technologies more accessible. Innovative models like pay-as-you-go (PAYG) financing can help reduce the burden of upfront costs.

Policy Support and Cross-Sector Coordination: Streamlining the tax and regulatory framework for PUE technologies, similar to those for solar products, will further encourage adoption. Coordination across sectors such as agriculture, trade, and energy is needed to ensure these policies are effectively implemented.

Building Market Capacity: Strengthening the supply chain by providing suppliers with access to affordable credit and supporting business development services will help improve the availability and quality of PUE products.

The World Bank and SEforALL emphasize that realizing Rwanda’s energy potential will require a concerted effort from all stakeholders — from government agencies to private sector partners and development organizations. With the right interventions, Rwanda could set an example for other nations seeking to leverage energy for sustainable development.