Showing posts with label private sector. Show all posts
Showing posts with label private sector. Show all posts

Wednesday, May 30, 2012

Mazimeru Hydro Power Plant inaugurated

Another of the hydro projects I was working on in Rwanda in 2006-2009 finally goes into operation. More importantly, the project vindicates private sector promotion as a way of developing the energy sector.

Good work CARERA, ADENYA and GIZ....



http://newsofrwanda.com/ibikorwa/8838/nyaruguru-district-prime-minister-commends-private-ownership-hydro-power-plant/

"“Do you see how state-owned companies differ from privately-owned ones?”, ... were [the] Prime Minister’s first words at Nshili hydro power plant, ... criticizing the slow-paced activities at Nshili hydro power plant – which is state-run "




Sunday, February 05, 2012

Businesspeople

Gregory Tayi and Olivier Ngororabanga coordinated one of the micro-hydropower projects GIZ supported whilst I was coordinating the project there in 2006-2009. It was a great pleasure and privilege to work with both of them. Gregory was interviewed a few months ago by the BBC: http://www.bbc.co.uk/news/world-africa-15695209. It's a charming interview:

The main capital one has is oneself; to know what one wants and where one wants to go.
...
Money is not what makes the [business]person. ... [Business] is making life easier for others.


At the inauguration of the REPRO micro-hydropower plant in 2010

Sunday, September 14, 2008

Project Description

There are several reasons why I write very little about my actual job here in Rwanda on this blog. However, now find an up-dated description of the project that I am coordinating online :

[Project] Title: Private Sector Participation in Micro-hydro Power supply for Rural Development

Per capita energy consumption in Rwanda is one of the lowest in the world. Less than five percent of the population has access to electric power, with less than one percent in rural areas. ... the project will provide technical and business expertise to support the creation ... of ... [private sector] energy providers. ...

7,000 households, up to 350 small businesses, and institutions providing social services in six municipalities will be connected to local power grids. Six small enterprises are given support for the installation of small hydro power plants for electricity generation.

Sunday, July 27, 2008

Big Concrete Thingy

(It's a sediment separator of a micro-hydro power plant belonging to the Rwandese company, REPRO.)

Tuesday, January 15, 2008

Sustainable Development for dummies (Part 2 – Market Cycles)

This is the second of 3 blog posts in which I try to explain very briefly my view of what “Sustainable Development” is, based on my experiences in Rwanda.

Whether it is the government, aid agencies or NGOs attempting to develop a country, the final aim is the same: to give an impulse to the development of independent sectors. Energy specialists try to create entire energy sectors, health specialists attempt to create a national health sector, economic development specialists try to create a whole range of vital economic sectors. The development of a new sector generally follows the following 4-stage profile (adapted from a product life cycle):

I. Sector introduction stage

  • demand has to be created
  • cost high
  • volume low
  • no/little competition

II. Growth stage

  • economies of scale
  • volume increases significantly
  • public awareness
  • competition begins to increase

III. Mature stage

  • market is better established
  • volume peaks
  • increase in competitive offerings
  • prices tend to drop
  • differentiation, diversification of product or service.

IV. Decline, Stability or new growth stage

  • volume stabilises leading to a focus on efficiency rather than growth
  • volume declines e.g. if a replacement product/service is introduced
  • new growth stage can be triggered if changes in the market or the product create new demand

Development aid simply doesn’t have the resources or the mandate to guide the entire product cycle. For example, how can development aid hope to supply electricity to hundreds of millions of people in Africa?

The aim of development aid is to guide a sector through stage I so that the market and the government can take over an exponentially growing sector.

This is a key point in understanding the role of development aid. Understanding this principle, also allows us to better assess the sustainability of a development aid intervention. If indeed we are successfully guiding a sector through stage I of its development, we would expect to see:

  • Exponential growth
  • The creation of new independent market actors and institutions

Our new definition of sustainable development aid would then be:

Development Aid is sustainable when it leaves behind an independent and exponentially growing sector that is able to respond to future environmental, social and economic challenges.

This is an ambitious aim. And I would guess that less then 10% of development aid projects succeed in fulfilling this aim. Leaving behind a sector independent enough to continue the work after the end of your project is not easy.

Tuesday, January 01, 2008

Sustainable Development for dummies (Part 1 – Dynamic societies)

,This is the first of 3 blog posts in which I will try to explain very briefly my view of what “Sustainable Development” is, based on my experiences in Rwanda.

The buzzword of the decade is “Sustainable Development”: development that is environmentally socially and economically sustainable. The days of environmental exploitation, rollercoaster-capitalism and social exclusion need to end if we are to survive. We need to protect the environment, manage our economies better and help the poor.

What does sustainability mean for development aid projects? The answer of many of my colleagues in development would be something like this:

Development Aid is sustainable when the results achieved remain indefinitely, without destroying the environment, becoming unprofitable or causing social problems.

Sounds reasonable. If for example, we train 10 fishermen to fish better, those 10 fishermen continue to fish better after the training project has ended. Ideally, the fishermen pass on the better fishing methods to their children. And also, to ensure that their lake is not over-fished, they create a cooperative to manage fishing rights.

Unfortunately, things are not that simple in reality. The sustainability of the project will be threatened by three types of challenges:
  • Maintenance: people will need to be retrained, cooperatives need to be revitalised and new fishing equipment needs to be maintained. An intelligently planned project can generally reduce this problem.
  • Changes in the market: If the regional fish price collapses, if fishes migrate or people start eating less fish, the fishermen will have to respond to the changed situation. For many, this will mean finding a new occupation. Whilst the project might teach people to fish better, it doesn’t necessarily teach people how to look for vocational training by themselves.
  • Population and demand growth: As the population and the economy grows, so will the needs of the people. People will need to further improve the efficiency of their fishing methods. But people will also need to find other occupations and create new industries. Basically, we don’t need to train fishermen, but micro-businessmen who will fish whilst it is profitable, and who will constantly look for new and better opportunities.
Basically, the problem is one of a constantly changing, dynamic and independent society. People will only succeed if they don’t need help from the outside to respond to such developments. There needs to be constant innovation, improvements, entrepreneurship and development for any improvement to be sustainable.

Our re-definition of sustainability could look something like this:

Development aid is sustainable when it leaves behind an independently functioning society and economy is able to develop and respond to future environmental, social and economic challenges.

Wednesday, December 05, 2007

Pouring concrete




A visit to one of our micro-hydro plant building sites. On days like this I love my job. These are project profit-driven private sector companies with restricted support from us. They are employing dozens of locals, developing spin-off businesses, will provide cheap electricity and are already looking for the next possible power plants. This is sustainable development. No community-owned plant with financial management issues, buraucracy and misguided ideas about the public good.

Monday, June 18, 2007

The problem with Africa's biggest solar power plant

I was at the inauguration of Africa’s biggest solar plant on the 6th July.

The work of the German companies Stadtwerke Mainz, Juwi and my friend Jutta in completing this plant is impressive. With 250kW it may be small compared to conventional power plants, but huge for solar power. This project broke new ground in Rwanda.


The press was unquestioningly positive.

Unfortunately, I think this project is misguided for a couple of reasons:
  • This is a large grid-connected plant. The future of solar energy in Rwanda is small household systems. This project demonstrates how not to do solar projects in Rwanda. The 250kW contribution to the grid of about 50 000kW is minimal. If the 250kW had instead been installed as 2500 household systems, the impact would have been much larger.
  • The plant was built entirely by German companies with German financing. The amount of technology and skills transfer is minimal.
  • The plant is a donation that makes no commercial sense. It demonstrates the technical possibilities of solar power, but not its economic viability. It is the economic viability that will decide about the future of solar energy in Rwanda.
  • Such non-commercial projects destroy local markets by suppressing prices to artificially low levels. Commercial energy projects in all sectors are being held back by unrealistically low cost expectations in the country.
I hope that future projects in Rwanda are better designed to develop the Rwandan private sector. Only if Rwandans themselves learn how to develop projects and commercial ventures can this country develop out of poverty.

Friday, February 09, 2007

Singapore of Central Africa?

On a development blog NextBillion, there were recently a couple of articles on Rwanda. 2 that I left comments on are "Toward Rwanda" about the ambition of developing Rwanda as the "Singapore of Central Africa" and another article about the prioritisation of electricity.

Sunday, December 10, 2006

Privatisation in Rwanda

This will probably only be of interest to Rwanda-philes and energy sector people. But the FT published a very interesting article on the privatisation of Rwandan utilities.

Working on the development of small private sector companies in the energy sector, I am very much aware of the painfully slow privatisation process in the energy sector. My comments on this are also on the World Bank's Private Sector Development Blog:

"Privatisation has to be about more than selling off state assets. It needs to be as much about transparent regulation and stimulating competition. The telecoms sector in Rwanda is still lacking much-needed competition. As for the lack of progress in the energy sector, this sector could move ahead even whilst Electrogaz' privatisation is paralysed by its high generation costs. But for this, Rwanda would need to introduce clear regulation that opens the way for private sector investors to challenge the poor levels of delivery of Electrogaz' defacto (but no longer legal) monopoly."