RW38 Support to setup Super ESCO facility in Rwanda as a vehicle to promote energy efficiency

At a Glance

Strategic Outcomes SO1 Reduced GHG emission, SO2 Creation of green jobs, SO3 Increased access to sustainable services, SO4 Improved air quality, SO6 Enhanced adaptation to climate change
Start Date Q2  2022
End Date q2 2023
Funding Source Earmarked
Actual Budget (USD) 181,325
Budget Percentage %
Actual Expenditure (USD) 161166
Status Active
GGGI Share (USD) 59238
Poverty and Gender Policy Markers poverty, gender
Name of Client (Lead/Prime implementer if GGGI is part of a consortium) Rwanda: Ministry of Infastructure (MININFRA)
Participating Organization (Funding/donor) Korea: Ministry of Economy and Finance
Name of consortium members, if any
Thematic Area
  • Green Cities
  • Sustainable Energy
  • Solar Energy
  • Renewable Energy
GGGI Project Code : rw38
Project Manager and Staff +
Arrabothu Dheeraj

Senior Green Building Officer

Rwanda’s energy sector policies lay clear emphasis on the role of energy efficiency and demand-side management to constrain uncontrolled future energy consumption growth and to support realizing Rwanda’s Green Economy vision. Rwandan households are the dominant consumers of electricity (51%), followed by the industrial sector (42%) and public sector consumption of electricity (6%) is mainly used for public buildings (8000+ of them managed by Rwanda Housing Authority), street lighting and water pumping. Rwanda has a pronounced peak demand load, which is both a key factor for power disruptions, because the existing power reserve margin is low, and a key driver for new generation capacity investment. No large-scale, strategic energy efficiency program has been implemented thus far in Rwanda except for small-scale initiatives that have yielded limited impact.

Promoting energy efficiency through Energy Performance Contract (EPC) concept is relatively new in Rwanda and needs a wide range of individual, institutional capacity building, legal and regulatory frameworks to enable the development of the Energy Services Company (ESCO) market, and implementation of the Super ESCO. A Super ESCO facility in Rwanda has the potential to accelerate energy efficiency by focusing exclusively on the public sector (hospitals, schools, municipalities, public buildings, street lighting, water pumping stations, wastewater treatment plants, and other public facilities) and support the development of private sector ESCO market in Rwanda. A Super ESCO will bundle projects in the targeted sub-sectors to reduce technical risks and facilitate financing. The size and credibility of Super ESCO as a public institution allow them to foster the growth of a nationwide domestic ESCO sector and provide financing for EE projects.

The overall objective of the project is to promote energy efficiency in Rwandan public and private sectors (buildings, street lighting, utilities, SMEs, and industries) by establishing a Super ESCO[1] (Energy Services Company) facility to overcome barriers, accelerate energy efficiency, and lay the foundation to develop ESCO[2] market by introducing Energy Performance Contract (EPC) in Rwanda.

The government has set a high-level target of achieving savings from energy efficiency measures of up to 50,000 MWh which is equivalent to 25,000 tCO2e. However, implementing energy conservation measures is a challenge in Rwanda due to the limited business direction in public agencies, stringent and complex budgeting and procurement procedures, and limited access to budgetary or commercial project financing. Many public agencies face severe budgetary constraints and focus on upfront costs out of necessity resulting in mounting operating cost liabilities, which in turn places added pressure on budgets and fuels a vicious circle. The challenges are not just limited to public buildings but also extend to street lighting, utilities, SMEs, and industries.

GGGI has been engaging with MININFRA and AfDB Energy Efficiency Division as the latter has been doing similar work in Morocco, Kenya etc. in setting up the Super ESCO facility and has access to resources for implementing and operationalizing Super ESCO under the Sustainable Energy for Africa (SEFA) fund. MININIFRA and GGGI as joint collaborators will use the project preparatory funds to scale up the work done so far with rapid building audits and green building code by conducting the initial assessment studies for a business plan development for the Super ESCO model in Rwanda.

Based on the results of the assessment studies, AfDB will investigate the opportunity for Technical Assistance support (most likely through SEFA resources) to help GoR in implementing and operationalizing the Super ESCO facility. AfDB has also indicated interest to explore the opportunity to capitalize on the Super ESCO facility for projects implementation if they receive an official request from the Rwandan Ministry of Finance and Economic Planning (MINECOFIN).