Rwanda: Govt to slash Power tariffs again to incentivise investment

Government is in the final stages of announcing new electricity tariffs for industries and heavy duty domestic users, according to the Minister for Trade and Industry, Vincent Munyeshyaka.

Presenting the draft law on Special Economic Zones in parliament on Tuesday, Munyeshyaka told members of parliament that while power production was improving daily, government was determined to find a permanent solution to the issue of load shedding, especially in the industrial areas, as part of the incentives to investors.

“Efforts continue to be put in place to fix electricity issues once and for all. As we speak, there is a new electricity tariff that has been completed aimed at reducing the cost of electricity specifically for industries and homes that use a lot of electricity,” he said.

Munyeshyaka admitted that while electricity production is improving daily, the story of consumption in the industrial areas was different.

“When you review electricity that is consumed in industries, it’s obvious that it is not yet at a satisfactory level. What needs to be done is to budget the electricity against the number of industries that are increasing in number. This is because we cannot allow an excess in electricity production because it can’t be stored and can cost us big losses,” he said.

Not the first time

At the beginning of last year, Government slashed unit prices for electricity by 50 per cent, in a move that was aimed at increasing affordability, better service delivery and competitiveness.

The electricity tariff for households that consumed not more than 15 kilowatts per month dropped to Rwf89, down from Rwf182, translating into a 51 per cent deduction from the standard cost.

On the other hand, people whose power consumption was between 15 kilowatts and 50 kilowatts per month, the price range remained constant at Rwf182, while those with consumption beyond 50 kilowatts per month, the price remained unchanged at Rwf189 per kilowatt.

In the industry services, consumers with large industries were being charged Rwf83 per kilowatt, those with medium industries Rwf90 per kilowatts while the small industries were put on a flat fee of Rwf126 per kilowatt.

More changes

Among the proposed changes, Munyeshyaka said that based on the past incentives, Government has seen reason to streamline and give a level playing field to both local and foreign investors”Looking at the incentives that were on offer before, there were some areas where there was need for revision.

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