Israelis, like other Westerners, have very little idea of the electricity challenges Rwanda and other developing African countries face. The East African country currently has a power capacity of just more than 100 megawatts for more than 11 million people — many of whom have no access to electricity. Israel, on the other hand, has about 13,000 megawatts of power available for its 8 million residents.
That’s one reason why Israeli entrepreneur Yosef Abramowitz, in his capacity as president of Gigawatt Global and CEO of Energiya Global, is doing something to help. After an agreement with an international consortium of equity investors and debt providers, Gigawatt Global, an American-owned Dutch solar developer, is planning a $23.7 million project to address Rwanda’s power issues.
The company will build an 8.5-megawatt solar photovoltaic power plant. Energiya Global, Gigawatt Global’s Israeli affiliate, provided seed money and strategic guidance for the Rwanda project, according to a news release.
“It’s an emotional and exciting day for us, and we hope for the world,” said Abramowitz, speaking at an event Monday in Jerusalem where the project was officially announced. Abramowitz is one of the pioneers of Israel’s solar energy industry; his Arava Power Company established Israel’s largest solar field in Kibbutz Ketura.
Tractors have already broken ground for construction of the solar plant and field in Rwanda. It is expected to be operational by this summer.
“I’ve been in this movie before,” Abramowitz said with a laugh, “where everybody said it would be impossible… Today, we’re realizing what everyone said was going to be impossible, which is creating a viable, commercial-scale solar industry in East Africa.”
Although this initiative will provide more people with electricity, Abramowitz thinks it’s about more than that. Up to 9 percent of the world’s energy is produced by burning diesel, the most expensive and pollutive power source, he said — and its use is especially common in developing countries. In his words, “the poorest people on the planet are essentially enslaved to pay the highest electricity costs.”
Such is the case in Rwanda as well. Hydroelectric power provides a portion of Rwanda’s electricity, but the largest amount of power production comes from burning diesel fuel; any alternative method is important, according to Abramowitz.
The project will be East Africa’s first commercial-scale solar field and is expected to increase the country’s power capacity by 8 percent. Rwanda’s government, which hopes to connect at least half the country’s population to its electrical grid by 2017, committed to a 25-year purchase agreement.
The field will be built about 60 kilometers from Rwanda’s capital, Kigali, on land owned by the Agahozo-Shalom Youth Village. The village, which houses and educates young Rwandans who were orphaned as a result of the 1994 genocide, is leasing out land for the solar field to help finance part of the its expenses.
Agahozo-Shalom was founded by Anne Heyman, a Jewish South African-born philanthropist who died recently in a horse-riding accident. She modeled the villages after similar havens that were established for orphans in Israel after the Holocaust. An emotional Abramowitz announced the solar project will honor her memory.
About 600 million people throughout Africa don’t have access to electricity. Abramowitz hopes this first commercial-scale solar field will spark a change throughout the continent. “We look forward to other African countries looking to Rwanda as an example,” he said.
The project was partially financed through two grants. The first being the Overseas Private Investment Corporation under President Barack Obama’s Power Africa Initiative. The other was the Energy and Environment Partnership, which includes the British, Finnish and Austrian governments. The grants totaled more than $700,000; 75 percent of the project is being financed through debt, and the rest through equity investors.
“This is a triple win for investors,” Abramowitz said. “They make money, they do good for humanity, and they help with efforts to prevent climate change” by cutting down on the burning of fossil fuels.
Gigawatt Global started work on this project in February 2012, and presented a feasibility study in December 2012, which the Rwandan government approved. Negotiations took place between February and July 2013, and on July 22, the project’s agreement was signed.
An RFP process drew 17 bidders for the project’s engineering work but ultimately Scatec Solar of Norway was chosen to complete the job, partly because of the speed it guaranteed. The project’s financial close was reached on Friday.
“We were told it was unrealistic, naïve, to finish on this timeline, but it’s done,” Motzen said.
Many other countries have approached Energiya Global and Gigawatt Global about their solar expertise, but for now, the companies are focused on the Rwanda project.
“(Rwanda) just made business sense, frankly,” Motzen said. “It’s a country that needs energy desperately. They’re paying exorbitantly for diesel. Rwanda makes sense for solar without subsidies.”