Project Description

This summary covers a guarantee for ContourGlobal (CG) of the United States for its $90 million equity investment in KivuWatt Ltd. The investment is for the construction and operation of a 100 megawatt power-generation facility using methane gas extracted from Lake Kivu pursuant to a concession agreement between CG and the government of Rwanda. CG has applied for a MIGA guarantee of up to $81 million for a period of up to 20 years against the risks of expropriation, transfer restriction, war and civil disturbance, and breach of contract.

The project involves extraction and separation of methane gas from the bottom of Lake Kivu and 100 megawatts of power-generation capacity installed in two phases. Phase 1 will involve gas extraction using a floating barge located approximately 13 kilometers offshore from the city of Kibuye. The extracted gas will be further processed and pumped to the shore for use in a power plant via submerged floating pipeline. Power will be produced by methane powered reciprocating engine generator sets with combined capacity of 25 megawatts, net output. Phase 2 will comprise three additional gas extraction barges and three more power production blocks with 75 megawatt capacity resulting in 100 megawatts of overall power generation.

The output will be sold to the Rwandan state-owned utility (SOE), Electrogaz. Phase 1 output will be connected to the national grid via a new dedicated 11 kV transmission line installed by Electrogaz.  Phase 2 will be connected to the existing 220 kV transmission system via two new transformers to be installed by Electrogaz.

Environmental Categorization

The project is a Category A under MIGA’s environmental review procedures. Click here to view the Environmental and Social Review Summary.

Development Impact

Over the last decade, Rwanda’s economy has nearly doubled in size, growing at an average rate of 7 percent per year. Nevertheless, the country’s electricity infrastructure (the generation, transmission, and distribution network) has failed to develop in pace with the broader economy. Rwanda’s total installed power generation capacity is 55 megawatts and only 6 percent of the population is serviced by the national power grid. To keep up with demand, expensive diesel power generators have been rented and brought online, raising the power tariff per kilowatt hour to twenty-one cents, one of the highest in Africa.

The project’s primary development impact will be the generation of 100 megawatts of additional electricity capacity, produced at a significantly lower cost than alternatives in the local market. Tapping the considerable methane reserves stored in lake Kivu will offer the small, highly populated, and land-locked country with a secure, domestic, cheap, and renewable source of power supply. The project is being developed in conjunction with a $400 million initiative (supported by Rwanda and international donors) to simultaneously expand and overhaul Rwanda’s power transmission and distribution network.

One of the main objectives of the World Bank’s Country Assistance Strategy for Rwanda for 2009-2012 is to improve access to and quality of key infrastructure services. The proposed project is fully consistent with this objective. This proposed project is also aligned with MIGA’s strategic priority of supporting investments into IDA-eligible (the world’s poorest) countries and investments in infrastructure projects.