Rwanda: Methane extraction project gets US$91 million for expansion

Kigali: The American firm ContourGlobal which launched the beginning of methane gas extraction from Lake Kivu has also secured a new loan from various sources – financing the company said will enable it to increase supply of power to the national grid.

The burge (in blue colour) will be pushed into Lake Kivu (in the background) where it will float as methane gas is pumped from the lake surface and changed into electricity (Photo: André Gakwaya)

The loan agreements for $91.25 million were signed Thursday at the KivuWatt project site in Karongi district (western province), during the launching of the 750 ton barge that will house the gas extraction facility. The function was also the groundbreaking for the power plant.

ContourGlobal got the loan from the Emerging Africa Infrastructure Fund, Netherlands Development Finance Company (FMO), the African Development Bank, and Belgian Investment Company for Developing Countries NV/SA (BIO).

The combined project will remove and process otherwise hazardous methane gas trapped in the waters of Lake Kivu for use as fuel to generate critically needed electricity for sale to Rwanda's Energy, Water and Sanitation Authority (EWSA), said ContourGlobal officials in a statement.

Energy and Water state minister Coletha Ruhamya said: “We are proud to note the significant progress that ContourGlobal has attained to extract electricity from methane gas.”

She added: “The stage we have reached means other government programs will be achieved at a much faster pace as a result of increased energy supply.”

By tapping the indigenous fuel, which is comprised of sub-surface methane dissolved in Lake Kivu's deep water, the KivuWatt project will significantly lower the cost of electricity necessary to drive Rwanda's fast growing economy. It will also represent the first large scale use of the gas, the extraction of which will greatly mitigate the environmental hazards associated with a natural release of the lake gases as well as provide an environmentally friendly and sustainable source of power generation, say experts.

This 25 MW is Phase I of the KivuWatt project, which also secured in May a political risk insurance policy with the World Bank Group. 

Phase I, which will cost approximately $142 million to complete, has also engaged in extensive environmental studies and permitting activities, all in accordance with stringent World Bank standards, and will be followed by three more phases to ultimately reach 100 MW.

Mr. Joseph C. Brandt, President and Chief Executive Officer of ContourGlobal, said, "Today's critical milestones for ContourGlobal's path breaking KivuWatt project place it on a rapid path to completion.  We greatly appreciate the leadership and creativity of our finance partners, EAIF, FMO and AfDB, and are honored that the Government of Rwanda has entrusted us to make this important contribution to the country's energy security."

Rwanda’s domestic power supply currently comes from hydropower, limited solar energy and small costly diesel-fired engines. With just a 9% electrification level, Rwanda has just 68.4 MW of installed capacity – which is completely insufficient to meet the country’s needs.

State Minister for Energy and Water, Ms. Coletha Ruhamya (center) along with ContourGlobal CEO, Mr. Joseph C. Brandt (extreme left), prepare ground for the project (Photo: André Gakwaya)

Source : rnanews