Tractors have broken ground and financial agreements have closed on East Africa’s first utility- scale solar field, an 8.5-megawatt oasis being built under the leadership of Jerusalem-based entrepreneurs.
“Today we’re realizing what everyone said would be impossible – creating a viable, commercial- scale solar industry for East Africa,” said Yosef Abramowitz, president of Gigawatt Global Coöperatief and CEO of Energiya Global, at a Jerusalem press conference on Monday. “The necessity to do so is huge.”
Gigawatt Global achieved financial close on the $23.7 million field on Friday, and has already begun its construction in the Agahozo-Shalom Youth Village for Rwandan orphans, located about 60 km.
The electricity is to be fed into the national grid under a 25-year power purchase agreement with the Rwandan Energy, Water and Sanitation Authority, and commercial operation is expected to begin this summer.
The project is being financed by equity investors and debt providers including Norwegian development finance institution Norfund, Norwegian- headquartered Scatec Solar, Dutch development bank FMO and the Emerging Africa Infrastructure Fund. Additional grant funding came from the Energy and Environment Partnership in Europe and the US Overseas Private Investment Corporation.
With a population of about 11 million people, Rwanda currently has an installed grid capacity of only about 100 MWs, derived from approximately 54 percent hydroelectric and 46% diesel sources and soon a small percentage methane gas.
As a basis of comparison, Israel’s 8 million-person population enjoys an installed grid capacity of around 13,000 MWs.
“Generation and provision of electricity to all Rwandans is important for the government of Rwanda,” said Rwandan Minister of State in Charge of Energy and Water Emma Francoise Isumbingabo. “This initiative to produce 8.5 MWs is a good addition toward closing the current energy gap.”
American-Israeli Abramowitz, known as the country’s “Captain Sunshine,” founded the US-owned, Dutch solar developer Gigawatt Global and its Jerusalem-based Israeli research and development arm Energiya Global with an aim to “kill diesel” and bring solar energy to the developing world.
Cofounder of the domestic Arava Power Company as well, Abramowitz and his partners were responsible for the construction of Israel’s first grid-connected, medium-sized solar field, which came online at Ketura, a kibbutz, in June 2011.
New Jersey businessman David Rosenblatt and Ketura resident Ed Hofland cofounded both companies with Abramowitz and joined Howie Rodenstein, the advisory board chairman, in establishing Gigawatt.
The company first began working on the Rwandan project in February 2012, originally envisaging the plans as a small facility to provide electricity for the village, said Chaim Motzen, managing director of Gigawatt Global and the project’s leader.
Due to increasing Rwandan governmental encouragement for renewable energy development, these plans changed, however, and Gigawatt Global soon signed a memorandum of understanding with the government for the larger field, and a feasibility study was completed by the end of 2012.
From February 2013 through July, the company negotiated terms with the government and ultimately signed a power purchase agreement at the end of this period. Gigawatt reached financial close on the field in under seven months, on Friday, February 14.
With confidence that the project would close, construction of the field actually began three days prior. “The Rwandan government really wanted this done quickly,” Motzen said.
The firm was incentivized to get the field on the grid quickly because for every day that they do not do so, they lose, he said.
Rwanda, a country with a suitable climate, excellent business environment and availability of strong partners, is the perfect first choice for Gigawatt’s solar field, according to Motzen.
“This is a country that needs the energy desperately,” he said.
Stressing how much the country depends on expensive diesel, Motzen said that “solar in Rwanda makes sense without subsidies.”
The Agahozo-Shalom Youth Village was established in December 2008 by Jewish South African-American attorney and philanthropist Anne Heyman, who died tragically in a horse riding accident three weeks ago, on January 31.
The village, which applies Israeli methods for coping with traumatized youth to Rwandan orphans, is the ideal site for the country’s first solar field, Heyman said during a June 2013 progress report meeting on the Rwandan project in Jerusalem, held in the presence of Rwandan President Paul Kagame.
“It’s such a perfect match for Agahozo-Shalom to be a place where we will be able to bring alternative energy,” Heyman said at the time.
With tears in his eyes at a Jerusalem meeting with investors on Monday morning, prior to the press conference, Abramowitz said that “just days after her accident, the tractors began building.”
“I personally am forever committed to the village,” he said.
Kagame, who at the time stressed how Rwanda feels “very much closely associated with Israel,” said that developing energy sources in the country will help positively impact the lives of his people.
Praising the project’s location, which was modeled after post-Holocaust Israeli orphan villages, President Shimon Peres said that the solar field will constitute “an important stride in our mission for Tikkun Olam – making the world a better place.”
“This wonderful initiative will serve as a shining beacon of hope and progress for humanity, and as an example of what Israel can contribute to the developing world,” Peres said.