Rwanda’s infrastructure milestones in 2016 and how they will impact the economy

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Marriott Kigali is the first Marriott Hotel to open in sub-Saharan Africa.

2016 has been rated, by several commentators, as one of the “most successful years” in Rwanda’s history, as far as socio-economic development of the country is concerned. A lot of infrastructure deals were signed while other mega projects were launched and/or inaugurated.

Economist Andrew Mold, the acting director of United Nations Economic Commission for Africa (UNECA) sub-Regional office for Eastern Africa told the Sunday Times that Rwanda’s economy had a “very good performance” in 2016, and it is no doubt that infrastructure played a key role in the estimated 6.0 percent growth rate—which is 4 times faster than the regional average, if the IMF standard is anything to go by.

Trademark East Africa country director Patience Mutesi, says that: “These projects are central to opening up the Rwandan economy in order to attain the targets set for transformation of the economy

However, she added that, “the challenge now is to ensure that there is sufficient demand for the structures in order to make the investments made sustainable.”

Here is a wrap up of at least 7 major Infrastructure milestones and how they intend to impact the country’s economy going forward.

Kigali Convention Center and Radisson Blu hotel

After years when Rwanda’s major state of the art convention center seemed like it would never be pulled off, this year it was finally completed and inaugurated.

Speaking at the inauguration ceremony of the complex in July, President Paul Kagame acknowledged that although the project had encountered multiple failures, the ‘Rwandan spirit of perseverance’ had led to success.

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Kigali Convention Centre.

The building, he said, is a “true testimony of the Rwandan spirit; we failed not once, not twice, may be three times, but on the fourth attempt we succeeded.”

The facility is now billed one of the capital’s greatest landmarks, and Rwanda’s trademark for that matter. It is easy to notice that almost every major event in the country bears sign of the mighty dome.

In addition, almost every major conference that Rwanda has hosted has been held at the Convention Centre.

In fact, the final success of the project, Kagame says, was prompted by many factors, including the opportunity to host the 27th African Union (AU) Summit, in Kigali.

Constructed on 12.6-hectare piece of land in Kimihurura Sector, Gasabo District, the Kigali Convention Centre is one of the largest in the region with a capacity to host more than 5,000 participants.

The facilities include the main auditorium that can host up to 2,500 people, plus several other meeting rooms, as well as an office park.

With Rwanda aiming to become a regional Meetings, Incentives, Conference and Events (MICE) destination, and the facility is seen as a timely boost to the already-thriving effort, KCC (as it has been nicknamed) was a timely boost.

In 2015 alone, MICE revenue grew from $29.6 million (about Rwf23 billion) to $37.7 million (about Rwf29 billion)—and the opening of the centre is predicted to pull a number of major events into the country.

According to Denis J. Dernault, the General Manager of Radisson Blu Hotel & Convention Centre, Kigali, the facility employs over 400 people, 98 per cent of them Rwandans.

TMEA’s Mutesi, notes that since the country’s priority areas is transformation of the Rwandan economy through increasing external connectivity and boosting exports, “Hotels, conferencing and connectivity by air and other modes of transportation are fundamentals that need to be in existence in order for tourism/exports to thrive.”

Two more 5-star hotels

In addition to the Radisson Blu hotel, two more 5-Star Hotels were inaugurated, these include Marriott Hotel and Ubumwe Hotel.

Marriott Kigali, is the first Marriott Hotel to open in sub-Saharan Africa. The opening of the 5-star 254-room facility in Kigali came a little over a week following Marriott International acquisition of Starwood Hotels & Resorts.

The transaction positioned Marriott International as the world’s largest hotel company, operating in over 110 countries.

Francis Gatare, Chief Executive Officer of Rwanda Development Board (RDB), said “the introduction of Marriott Hotel into the Rwanda market is something we are proud of. Having them join our market is a boost to the country’s tourism and hospitality sector.”

The Kigali Marriott Hotel itself has 254 rooms and 10 conference halls, and the President and Chief Executive of Marriott International, Arne Sorenson, told The Sunday Times that the hotel has created 500 jobs.

World-class malls opened (Chic, Kigali Heights)

In December, President Kagame inaugurated Champion Investment Corporation Complex (CHIC), a new Rwf20bn commercial complex in downtown Kigali put up by a group of 56 investors; and Kigali Heights, a new $40 million landmark structure that will be used for both office and retail purposes.

With 1,500 rooms, CHIC complex is meant to provide business rentals, supermarkets, office space and entertainment spots, among others.

The complex is expected to host traders from Quartier Matheus structures in the Central Business District, hence changing the face of Kigali city—shifting to the desired development master plan.

City of Kigali authorities believe that these structures create enough commercial space for business to operate in, paving way for the implementation of the city master plan.

KivuWatt gas power plant inducted

In May, the world’s only gas/water extraction energy plant operating was inaugurated in Rwanda.

The Kivu-Watt Gas Power Plant is located in the Western Province’s Karongi District. The plant, fired by methane gas from Lake Kivu, was built by American energy firm ContourGlobal, which the Rwandan government gave a 25-year concession to produce 100 megawatts from Lake Kivu.

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In May 2016, the world’s only gaswater extraction energy plant operating was inaugurated in Rwanda.

Built at the tune of more than $200 million (more than Rwf156 billion), the first phase of the project, 26 MW, has been funded through a concessional loan by the African Development Bank (AfDB), Emerging Africa Infrastructure Fund (EAIF), Netherlands Development Finance Company and the Belgian Investment Company for Developing Countries.

Kivu-Watt’s 26 MW, brought Rwanda’s current energy generation capacity to 190 according to Rwanda Energy Group officials, edging Rwanda closer to the government’s target of reaching installed electricity generation capacity of 563 MW in the country by the year 2018.

Under the second Economic Development and Poverty Reduction Strategy (EDPRS2), it is expected that the overall access to electricity nationwide shall be at 70%(48% on-grid and 22% off-grid), with the priority being given to the electrification of economic areas.

This has resulted into a rapid increase in the electricity access where by grid connections through the government’s Electricity Access Roll-out Programme (EARP) and related initiatives increased from about 110,000 households in 2010 to 590,000 households by August 2016. On average, 75,000 new households have been added to the grid each year for the past five years. This implies an increase in electricity access from 10.8% in 2011 to 24.3% on grid and 2.6% off-grid by 2016.

Therefore, extraction of methane gas from Lake Kivu has a double benefit; reducing the risk of a possible catastrophic outburst of the gas and solving the issue of energy shortages in Rwanda. Experts say that at least 700 MW of electricity can be generated from the methane gas in the lake over a period of 45 years.

Bugesera Airport

Last September was off to a great start, following the signing of an agreement between the government and Mota Engil Engenharia e Construcao Africa SA, a Portuguese firm that deals in civil construction, port operations and logistics to construct the highly anticipated Bugesera International Airport.

The deal will see Mota Engil Engenharia e Construcao Africa SA finance, construct and complete the airport by December 2018 and later run the facility’s operations for 25 years with an option to extend by another 15 years.

Under the agreement, the government will not incur costs to put up the facility while the Portuguese firm is expected to recoup their investment by running operations.

That would bring the amount spent on the whole project to US$818 million.

Citing the tight deadline to complete the facility (within 28 months), Mota termed it as a “fast-track project”, hence the groundbreaking will be in June 2017, as the company await securing finances.

The Minister for Infrastructure James Musoni, has said that airport will help accommodate the ever-growing air traffic in a country that’s on its march to becoming a major conference and business hub.

State of the art new planes

In less than three month RwandAir acquired three new aircraft, increasing the national carrier’s fleet to 11, marking a remarkable growth in just 5 years of its existence.

Among the acquired new aircrafts included Africa’s first Boeing 737-800 Next Generation (Kalisimbi), which is equipped with in-flight connectivity on a line-fit programme, including Wi-Fi. Earlier, in September, the national carrier also acquired East Africa’s first Airbus 330-200, popularly known as Ubumwe.

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RwandAir’s brand new Airbus 330-200.

In December, 2015, RwandAir signed a lease agreement with Aircraft Lease Corporation, an American-based company, to acquire two new Boeing 737-800 Next Generation planes, one of which has already been delivered, while the second is expected in May 2017.

The airline flies to 19 destinations. It is set to open routes to Harare in Zimbabwe, Mumbai, India, soon; London, New York later and China at a later stage.

RwandAir projects to ferry more than three million passengers annually in the next five years, from 600,000 travelers presently.

Rwanda, Morocco in major partnerships deals

In October, King Mohammed VI of Morocco arrived in Rwanda as the first leg of his three-nation tour to eastern Africa.

Moroccan King’s visit to Rwanda is perhaps one of the major events of last year; due to the number of bilateral deals that were involved in that state visit.

19 deals were signed in the areas of cooperation agreed on include foreign relations, security, finance, investments and private sector development.

Minister for Finance and Economic Planning, Amb. Claver Gatete, and the Chief Executive of Banque Centrale Populaire, Mohamed Benchaaboun signed an agreement on Microfinance Partnership on the launch of Africa Mutual Growth Investment Fund

Rwanda Development Board chief executive Francis Gatare signed six deals with Moroccan officials on a number of areas including the establishment of a pharmaceutical industry in Rwanda by Cooper Pharma.

The plant, which is expected to open in 2019, is set to occupy about 10,000 square meters and will produce beta-lactam antibiotics with the aim of improving access to quality medicines affordable for Rwandans.

Rwanda signs deal to host a car assembling plant

December came with sort of a blockbuster; German carmaker Volkswagen (VW)  and the Government of Rwanda signed an agreement that will see the former set up an assembly plant in Rwanda to start making environment-friendly cars.

The agreement will enable Volkswagen South Africa to start assembling cars in Rwanda that are easy to maintain and that are low on fuel consumption and gas emission.

In South Africa alone, the carmaker is a major contributor to foreign direct investment, technology transfer, job creation, and skills development.

Nzove water treatment plant inaugurated

The need for clean water in Rwanda has been growing over the year and indeed, WASAC Ltd together with the Ministry of Infrastructure seemed to have been taking notes. This was followed by a number of projects being developed to meet the demands.

Infrastructure Minister James Musoni said that Nzove water plant has eased water shortage in the city suburbs of Nyamirambo, Gikondo, Kabeza, Kicukiro, Kagarama, Samuduha and Busanza.

The plant, which was funded by Government of Rwanda at the tune of $ 7.4m for phase one, and constructed by Culligan International, a US firm, doubled the production of clean water for the city of Kigali by providing an additional 25,000 cubic meters (m3)/day.

With the population slightly above 1.1 million people and urbanisation at about 9 per cent per year, the City of Kigali has been facing persistent water shortages.

The government seeks to reach 100 percent clean water supply, in the entire country, by 2020 and several water treatment projects are expected to be finished this year, according to WASAC.

Available statistics from WASAC indicate that access to clean drinking water is at 76 per cent, while the national access to improved sanitation facilities is at 83.4 per cent. Nzove water treatment plant phase 2 is under construction. It will have a capacity of 40,000m3/day. To be completed June 2017.

ATHAN TASHOBYA

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