Rwanda - Issues and options in the energy sector

Report No. 3779-RW Rwanda: Issues and Options in the Energy Sector June 1982 Report of the joint UNDP/Mbd Bank Energy Sector Assessment Program Ths document has a restricted distribution. Its contents may not be disclosed without authorization from the Government, the UNDP or the rld -Bank.  CURRENCY CONVERSION US$1.00 = 92.84 RwF (Rwandan Franc) ENERGY CONVERSION FACTORS TOE = ton of oil equivalent = 10,500,000 kcal (kilowatt-hours) electricity and = 3940 kWh (kilowatt-hours) electricity and hydro = about 9.0 m3 of fuelwood = about 1.5 tons of charcoal = about 3.5 tons of peat at 35% moisture content = 0.92 tons = 1240 liters gasoline = 0.95 tons = 1210 liters kerosene = 0.99 tons = 1150 liters gas and fuel oil This report is based on the findings of an energy assessment mission comprising Mr. D. Hughart (Energy Economist), Ms. C. Tobias (Consultant), and Mr. C. H. A. Killoran (Senior Power Engineer), who visited Rwanda in April and May, 1981. Ms. S. Baile (Researcher) assisted in the report's preparation.  FOR OFFICIAL USE ONLY Report No. 3779-RW RWANDA ISSUES AND OPTIONS IN TEE ENERGY SECTOR June 1982 This is one of a series of reports of the Joint UNDP/World Bank Energy Sector Assessment Program. Finance for the work has been provided, in part, by the UNDP Energy Account, and the work has been carried out by the World Bank. This report has a restricted distribution. Its contents may not be disclosed without authorization from the Government, the UNDP or the World Bank.   Joint UNDP/World Bank Energy Sector Assessment Program Reports Already Issued Country Date No. Indonesia November 1981 3543-IND Mauritius December 1981 3510-MAS Kenya May 1982 3800-KE Sri Lanka May 1982 3794-CE Zimbabwe June 1982 3765-ZIM Haiti June 1982 3672-HA Pnapua New Guinea June 1982 3882-PNG Burundi June 1982 3778-BU  I i i r  RWANDA ENERGY ASSESSMENT CHAPTERS Page No. I ISSUES AND RECOMMENDATIONS .......................... 1 Energy Problems ..................................... 1 Background: Energy Consumption and the Economy ..... 2 Energy Issues and Recommendations ................... 6 II WOODFUELS AND PEAT .................................. 12 Woodfuels ........................................... 12 Supply and Demand ................................. 12 Institutions and Planning ......................... 13 External Assistance ............................... 14 Conservation ...................................... 15 Peat ................................................ 17 Supply ............................................ 17 Demand ............................................ 18 Institutions and External Assistance .............. 19 Recommendations ................................... 20 III OIL . ................................................ 22 Overview ............................................ 22 Demand and Supply ................................... 22 Petroleum Stockpiles ................................ 25 Potential Alternatives to Petroleum ................. 28 Recommendations ..................................... 29 IV ELECTRICITY ......................................... 30 Overview ............................................ 30 National Institutions ............................... 30 International Institutions .......................... 31 Existing Generating Facilities ...................... 31 Works in Progress ................................... 32 Ongoing Studies ..................................... 32 Demand for Power .................................... 34 Supply for Power and Energy ......................... 34 Tariffs ............................................. 35 Recommendations ..................................... 35  Table of Contents (cont.) CHAPTERS Page No. V METHANE ............................................. 37 Overview ............................................ 37 The Resource ........................................ 37 Development Status .................................. 38 Institutions ........................................ 39 Safety Limitations .................................. 40 Markets ............................................. 41 Conclusions and Recommendations ..................... 45 VI OTHER ENERGY RESOURCES .............................. 47 Overview ............................................ 47 Resources ........................................... 47 CEAER ...................................... ..... 51 Conclusions and Recommendations ............. ....... 52 ANNEXES I Rural Cookstove Project ............................. 53 II Petroleum Stockpiles .56 III Extension of the Mombasa-Nairobi Pipeline .58 IV Electrical Power: Statistical Tables .60 V Organization Chart; Electrogaz .67 VI Commercial Energy Balance, 1975-1980 .68 Map Electric Power System (Regional Map)  I. ISSUES AND RECOMMENDATIONS Energy Problems 1.01 Rwanda is a small, low income, densely-populated landlocked country!/, and its principal energy problems are related to these characteristics. Most Rwandans are forced by their low incomes to use traditional fuels -- wood when available, agricultural residues when necessary - for cooking and other basic energy needs. The high density of Rwanda's population relative to both total and arable land area has made woodfuels increasingly scarce and puts reforestation efforts in competition for land with food and cash crop production. 1.02 As a land-locked country, Rwanda is dependent on overland transport routes crossing other countries for almost all of its imports, including oil. In Rwanda's case, the main route is long and mostly over highways; unit costs are therefore high. Furthermore, events in Uganda have at times closed the route, and there is a perceived danger that this could happen again and a concensus on the principle of establishing a reserve stock of oil products. The inconvenience of crossing Kenyan territory is not so much in terms of security as price: Kenya insists that Rwanda purchase oil products from its (underutilized) Mombasa refinery and sets export prices above the level Rwanda might expect to pay if it were able to purchase products in the open market and bring them across Kenya in transit. Improvements in transport links between Rwanda and the Indian Ocean across Tanzania are underway and should ease (but will not eliminate) these problems. 1.03 Rwanda's small geographic size (and the fact that its borders, like those of many other nations, tend to follow major waterways) makes it perhaps not too surprising that its major hydro resources are found along its boundaries and thus require at least bi-lateral agreements for development: major sites exist along the Zairean and Tanzanian borders. Rwanda has an electric power grid connected with those of Zaire and Burundi through an existing power plant (Rusizi I) from which all three draw power. The institutional arrangements involved have worked well. However, they have not yet been extended and strengthened to the extent necessary to support the joint hydro development that from a strictly 1/ GDP per capita in 1979 was about $200 and population about 4.9 million. Growth rates for 1970-1979 averaged 4.1% p.a. for GDP and 2.8% p.a. for population. Agriculture contributed 42% of the GDP, of which four-fifths was subsistence crops. Agricultural exports provide two- thirds of export earnings, with coffee alone accounting for about 60% in 1978-79. Tin ore and tungsten account for about 20% of export earnings. The largest category of imports is consumer goods; petroleum imports account for about 10% of total imports, less than foodstuffs and about equal to textiles.  - 2 - techno-economic perspective is the least-cost option for meeting the growing demand on the system. Rwanda also needs to further an existing agreement with Zaire on development of its only known hydrocarbon resource: the large quantities of methane dissolved in the lower depths of Lake Kivu, which is shared by the two countries. 1.04 Technical and management skills are scarce in Rwanda. This particularly effects the prospects for developing the country's methane and peat resources because of the major technical questions surrounding these that still need to be resolved, but it also generally inhibits effective policy-making and the planning and everyday management of energy producing, handling, and consuming institutions. 1.05 While Rwanda's geographic, demographic, and economic situation is at the root of many of its energy problems and not amenable to rapid improvement, the country is not without energy resources and options. The goals of this assessment have been to collect and put in perspective the basic available facts about Rwanda's energy situation and to analyze and suggest priorities among the actions that might be taken in the sector by the government and external development assistance agencies. The rest of this chapter presents an overview of Rwanda's energy situation, outlines the remainder of the report and summarizes its main findings and recommendations. Background: Energy Consumption and the Economy 1.06 Energy is consumed in Rwanda predominately in the form of fuelwood and other traditional, non-commercial fuels, including agricultural residues and charcoal that are primarily used for household and institutional cooking and by some small industries. Available data allow only a rough estimate of the volumes involved but, as shown below, these fuels account for over 95% of the total energy consumed. Only a small fraction, predominately charcoal, of the traditional fuels, is marketed. Energy Consumption in Rwanda, 1979 i/ (thousand tons of oil equivalent) Marketed Non-Marketed Total Traditional Fuels 6 940 946 Commercial Fuels 62 _ 62 Total 68 940 1,008 1/ Figures drawn from Table 1.1.  Table 1.1 RWANDA:National Energy Balance, 1979 (tons of oil equivalent) Other Agricultural Petrole- Fuelwood Charcoal Resldues Peat Gasoline Kerosene Gas-Oil Products Electricity Total SUPPLY Domestic Primary Production 800,000 0 170,000 650 0 0 0 0 7,744 978,394 Imports 0 0 0 0 29,089 6,618 12,746 5,370 8,432 53,255 Charcoal Production 30,000 6,000 0 0 0 0 0 0 0 -24,000 Thermal Electric Generation 0 0 0 0 0 0 -185 0 130 -55 Total 770,000 6,000 170,000 650 20089 6,618 12,561 5,370 16,306 1,007,594 DEIAN'D Household 730,000 5,500 170,000 0 10,089 5,618 0 0 2,795 924,002 Commercial & Government 25,000 500 0 0 4,000 1,000 0 0 6,325 36,825 Industrial & Mining 15,000 0 0 650 2,000 0 4,000 2,500 4,423 28,573 Transportation & Construction 0 0 0 0 4,000 0 8,561 2,870 0 15,431 Electrical System Losses 0 0 0 0 0 0 0 0 2,763 2,763 Total 770,000 6,000 170,000 650 20,089 6,618 12,561 5,370 16,306 1,007,594 Sources: Electricity balances from Electrogaz. Petroleum imports from Ministry of Natural Resources. Comparable data for 1975 - 80 are shown in Annex 6. Other figures shown are mission estimates subject to wide margins of errors. Note: Ton of oil equivalent equal to 10.5 mn kcal. Electricity converted at 2666 keal/kWh for international comparability, but thermal generation assumed to require 3800 kcal/kWh.  -4- 1.07 The dominant position of traditional fuels in Rwanda's energy balance reflects the importance of rural, small-holder farming in the economy. Over 95% of Rwanda's inhabitants live on small family farms, working in subsistence agriculture which provides little or no spare land on which to plant energy crops and little or no cash to buy commercial energy. A 1975 study found that nearly half of the rural farmers had a monthly cash income of under 500 RwF (about $5.50). Fourteen percent reported no cash income at all. The principal sources of rural cash income included small-scale coffee production and sales of homemade banana beer. There is little use of hired labor. While Rwanda is fortunate in having relatively good soils, favorable climatic conditions which allow two crops per year in most areas, and variations in climate and elevation which permit a wide variety of crops to be grown, it is mountainous and densely populated. Crop yields are generally low, as fertilizers and improved seeds are virtually unused and agricultural extension is ineffective. With a population of nearly five million and an area of 26,338 km2' Rwanda has the highest population density of any mainland African country, 183 per km2. 1.08 Table 1.1 shows a national energy balance constructed from available data and estimates made by the mission. Commercial fuels, namely petroleum products and electricity, account for only 10% of total consumption. Petroleum products (7% of energy consumed) are used by the modern, urban sector, mainly for vehicle fuel. Electricity (3% of total energy consumed) is used for some industries, government buildings and by upper income urban households. Commercial energy demand is concentrated in the towns (Kigali, the capital, is the largest with a population of about 110,000. The second largest, Butare, has about 25,000 inhabitants) and isolated institutions such as tea factories, missions and mines. 1.09 Commercial energy consumption grew at an average annual rate of about 9% over the period 1975-1980, considerably faster than GDP in real terms. Nonetheless, commercial energy consumption per capita and per unit of GNP remain lower than in most other countries of similar size and income level, as shown in Table 1.2. 1.101/ No firm foundation exists for projecting Rwanda's future commercial energy consumption. The likelihood of a continuation of the growth pattern of the 1970s (strong GDP growth in spite of weak agricul- tural performance) appears small because of the continuing deterioration in the country's external terms of trade. Projections of Rwanda's balance of payments show a deterioration from a small surplus position (on average) through the 1975-79 period to a deficit of $170 million by 1985, a level that would be sustainable only with a dramatic increase in official external assistance on capital account that would in turn require both a significant improvement in project preparation and implementation and a significant increase in non-project assistance2/. 1/ This paragraph subject to review based on findings of a Bank ecnomic mission scheduled for November 16 - December 8, 1981. 2/ IBRD, Rwanda: Economic Updating Memorandum (green cover, July 15, 1980).  Table 1.2 INTERNATIONAL COMPARISONS OP COMMERCIAL ENERGY CONSUMPTION, 1979 Population GNPICapita En_ergy Consumtion _ (millions) ($)o kg. o.e.) (.o =-. ca p (kg.o.e./$C'NP) ( Petroletoui) RWANDA 4.9 200 61 12 0.06 73 Itali 6.8 140 140 20 0.14 92 Upper Volta 5.6 180 110 19 0.ll 94 Burundi 4.0 180 36 9 0.05 73 MJalawi 5.8 200 270 47 0.24 59 Benin 3.4 250 150 45 0.18 91 Oi Sierra Leona 3.4 250 200 59 0.24 96 Niger 5.2 270 170 32 0.12 92 Culinea 5.3 280 310 58 0.21 66 Note: Comtparators are countries wliose population and per capita MNNs are between 67% and 150% of Xwanda's. US. o.e. - kg oil equivalenit - 10,500 kcal. Sources: Annex 5, staff estimates for Burtindi, and World Bank, Accelerated Developnent in Sub-Saharan Afrlica.  - 6 - Not only is the future macro-economic environment unclear, but the identification and analysis of individual investment projects under consideration for inclusion in the 1982-86 Five-Year Plan was not far advanced at the time of the mission. Energy Issues and Recommendations 1.11 As illustrated in Figure 1.1, there are generally strong associations between specific sources of energy and specific categories of energy demand in the Rwandan economy. The bulk of the population uses firewood and agricultural residues for their cooking and other household energy needs and, conversely, the bulk of traditional fuels consumption is accounted for by rural households. Oil imports are similarly associated with transport and construction, while electricity, obtained virtually entirely from imported and domestic hydro, is used in urban areas for lighting and operating electrical machinery. While this compartmentalization is not complete - some users can and do shift among traditional fuels, oil and electricity for some uses - and development of Lake Kivu's methane could create a substantial link among methane, electricity and oil users, this division reflects the situation sufficiently well to warrant treating energy in the Rwandan context more as a series of parallel sub-sectors than as an integrated whole at the present time. The structure of this report therefore follows this approach, with separate chapters covering the sources and uses of firewood and peat, oil products, electricity and methane. This situation also suggests that efforts to strengthen Rwanda's energy planning capacity be concentrated at the sub-sector level. 1.12 It is worth emphasizing that while it is more convenient to label the energy sub-sectors according to the form of energy involved or the source of supply than by the set of energy demands with which they are associated, this does not imply that energy supply policy issues are any more important than those related to energy demand. In the fuelwood and peat (or "rural household cooking, heating and lighting") sub-sector in particular, efforts to improve the efficiency with which energy is used appear to offer a higher and faster return than efforts to increase supply. Energy Issues and Recommendations 1.13 The mission has identified five major areas of priority action, and the report is organized correspondingly. Chapter II deals with the first and most important area firewood, charcoal and agricultural wastes. Rwanda's heavy dependence on woodfuels had led to deforestation, particularly in regions that are densely settled. The current and planned reforestation projects, largely financed by external donors, which are overseen by the Director of Waters and Forests in the Ministry of Agriculture and Livestock, appear to make good use of the resources available for tree planting and aerial surveys indicate that there have been increases in tree cover in some areas during the past ten years. Moreover, a work plan for development of a national forestry policy and an overall forestry sector development plan prepared in draft outline in  Figure 1.1: Energy Flows in Rwanda (not to scale) Sources Uses Agricultural Residues Agricultural Rural households and Forestry C = (cooking, heating Resource Base lighting) \/ Forests, Savannah Fuelwood t Peat = > Tea factories, missions, etc. Domestic Hydro Urban households Urban industrial/commercial Electricity Imports (iighting, electrical appliances, Lake Kivump Transportation and construction WorldnBank - 23572  8 - the Directorate of Waters and Forests is a further useful step, although data collection on the extent and type of forestry resources by region, on wood use for various purposes, and,on household consumption of fuelwood and agricultural wastes will also be needed to effectively allocate forestry resources. Funds will be needed for this work. Also, effective implementation of reforestation schemes will require a substantial increase and reorientation in forestry extension work and the government should consider increasing budget allocations for this purpose. Until recently, extension workers have functioned primarily as guardians of state forestry plantations and woodlots. They now need to be trained to deal directly and frequently with the rural population with the aim of teaching farmers how to plant and manage their own private woodlots and how to conserve woodfuels and agricultural wastes used by their families for cooking. Improved cookstoves for wood, wastes and charcoal, suitably adapted for local conditions, are an integral part of conservation and a program should be developed to encourage people to convert from their traditional models which use twice as much fuel as the improved models (Annex 1 - Rural Cookstove Project.) To encourage forest conservation, charcoal production licensing fees should be introduced and simple improved kiln models should be provided. These could reduce energy loss during the conversion process by up to 30%. 1.14 Peat might provide a partial substitute for firewood for small industries and for rural institutions in a few areas, and perhaps eventually for urban households that would otherwise purchase fuelwood or charcoal. Detailed information on the extent of Rwanda-s peat reserves, and on their potential for exploitation, is still being collected. Indeed, there is an urgent need to determine how much exploitable peat Rwanda actually has. Hydrological surveys should be carried out in certain areas like the Rugezi, which cannot now be considered suitable for exploitation because of the unknown ecological effects of peat extraction, to determine whether and how it may be possible to exploit them safely. The wet, colloidal peat reserves of the Akanyaru Basin are believed to be substantial in quantity, but extracting and processing them into a usable fuel is likely to be complex and costly. Results of the IDA-financed study of alternatives for exploiting similar but more easily drained bogs in Burundi should be awaited before any substantial investment is made in detailed surveys of Rwanda's share of the basin and in attempting to develop this type of peat. Along with the hydrological surveys needed to reveal the extent and location of Rwanda's exploitable peat resources, there is a need to identify and develop suitable markets for peat. Currently, a pyrethrum-drying plant is the only substantial consumer of peat, and the quantity consumed is very small. If it turns out that the most easily exploited peat is located in remote areas far from potential users, high transport costs may greatly reduce its ability to compete with other fuels, though it may be possible to develop local industries near the peat, once a dependable source of supply has been located. 1.15 At the present time, the responsibility for peat activities in Rwanda is in a small office in the Ministry of Natural Resources. If surveys show the feasibility of substantial peat extraction and  - 9 - marketing, a larger staff may be necessary, but for the time being the current arrangement is adequate. 1.16 Chapter III discusses the second major priority area, oil. Rwanda has no domestic oil production or refining activity, and no apparent prospects for petroleum exploration. Petroleum product imports at 50,000 tons/year are relatively small, accounting for only 10% of total imports (despite an average c.i.f. cost of nearly $100 per barrel ) and come to Rwanda by truck from Nairobi, a distance of about 1,250 km. Following a supply interruption during the Uganda war, the government has been concerned to develop a national petroleum reserve. The mission recommends that, before the large, new stockpiling facilities now planned are filled, a contingency plan be developed covering the use and reconstitution of the reserves. The mission also recommends imposition of a storage fee or tax which would pass on the costs of building and maintaining reserves to the consumers who will benefit from them. 1.17 Rwanda is put at a disadvantage in the petroleum product market by the high cost of transport and the virtual monopoly position of Kenya, which charges a premium of about $15 per barrel for exported oil products over the (hypothetical) cost of gasoline and diesel fuel purchased at spot market prices in the Persian/Arab Gulf and shipped to Mombasa. The mission recommends that consideration be given to the alternative of purchasing oil in international markets and bringing it across Tanzania once the Rusumo-Isaka road is opened. 1.18 Chapter IV deals with electricity. Most of the electric power consumed in Rwanda is currently purchased from Zaire. Rwanda has, however, substantial domestic hydroelectric potential, some of which is already utilized. The principal hydropower plant, Ntaruka, was used at twice its regular capacity in 1978 and 1979 to cover electricity requirements prior to completion of the interconnection with Zaire, and is now operating at low capacity to allow the lake to refill. Another hydroplant began operation in February 1982 at Mukungwa. Rwanda has an interconnected power grid which serves eight of the ten provincial capitals; but many of the transmission lines were built to take advantage of foreign offers to finance them without sufficiently considering their economic justification. 1.19 The major issues in the power sector include institutional arrangements, the development of an overall sector planning capacity and electricity tariffs. There is presently considerable dispersion of responsibilities for the power sector among various institutions, includ- ing Natural Resources (identification of hydrosites), Public Works (con- struction), ELECTROGAZ (maintenance and operation) and Plan (some plan- ning efforts). The mission suggests that Electrogaz should be given more control over the planning and construction phases, of electrical system investments as well as over operation of the system. There is a need for an electric sector development plan to permit Rwanda to make the most efficient use of the resources available to it. A study of the power system currently in progress should provide much of the basis for such a plan, but will need periodic revision and updating. Rwanda may also have  - 10 - a geothermal potential in the regions around the volcanos and Lake Kivu. Chemical analyses of water samples from these areas can be carried out at a relatively low cost, and would provide a better idea of the nature of this resource. Power tariffs are currently set on the basis of operating costs, without an allowance for capital costs. The rates are however, higher than operating costs of electricity operations alone would warrant since they are set to cross-subsidize the water supply operations which Electrogaz also handles. The mission recommends that the tariff review component of an on-going study of the power sector be given special attention. 1.20 Another issue, international in scope, but most significant for Rwanda is the Rusizi II hydro-power plant which is being promoted by Rwanda, Zaire and Burundi under the Economic Community of the Great Lakes Countries, through the Energy Organization of the Great Lakes Countries (EGL). This project is clearly the least cost method of providing Rwanda with additional energy. Agreement has been reached on the basic design parameters of this project. 1.21 Chapter V discusses a resource which, depending on how it is developed, could prove a partial substitute for imported oil and/or electricity, the estimated 65 billion Nm3 of methane dissolved in the bottom strata of Lake Kivu on the border with Zaire, of which some 50 billion Nm3 are considered recoverable.l/ A total of 14 million Nm3 of methane was extracted by a pilot plant and used in a brewery between 1963 and 1976. Key issues in this sector include choice of extraction techniques and the rate of extraction, the need for an agreement with Zaire on exploitation of the resources, and the potential market for large scale production. Development on a large scale will have to proceed cautiously to avoid setting up a pattern of vertical circulation of water within the lake that would cause large quantities of methane to come out of solution, and be dissipated in the atmosphere or cause a major fire or explosion. It is recommended that an international panel of scientists and engineers advise on safety restrictions and lake- monitoring requirements that should be imposed on any scheme to develop the resource. 1.22 Before any major gas extraction effort can begin, Rwanda and Zaire must reach agreement on terms for implementing an accord signed in 1975. This agreement should be discussed soon and the mission recommends that Rwanda seek an arrangement under which each country would have maximum flexibility on the development of intermediate phase plants, within guidelines set up to safeguard the resource. 1/ "Nm3", "normal cubic meter," or a cubic meter at one atmosphere of pressure and O' C. It is equal to about 37.32 scf or "standard cubic feet".  - 11 - 1.23 There are a variety of possible alternative patterns of gas utilization in Rwanda and because they have different requirements for scale and reliability of methane supply, some are better adapted to the intermediate phase, when the gas extraction technology is still being developed, tested and demonstrated, and others to a later stage when large plants can be built with confidence. Chemical plants to transform the methane into methanol or fertilizer seem unlikely candidates for the next phase of development, although they could later become the principal consumers of the gas. First consideration should probably be given to methane as a fuel, both for vehicles and for use in stationary motors. 1.24 Chapter VI covers renewable energy other than fuelwood and hydropower. The Centre d'Etudes et d'Application de l'Energie au Rwanda (CEAER) has had principal responsibility for alternative energy source research and development and has to date focussed its efforts on tech- nologies such as solar water heaters and biogas digestors. The mission suggests that CEAER devote more of its staff time to developing tech- nologies such as improved cook stoves and charcoal kilns.  - 12 - II. WOODFUELS AND PEAT Woodfuels Supply and Demand 2.01 Currently the principal energy source for most of Rwanda's five million people are the woodfuels (firewood or charcoal) they use to cook their food. Rural households use either firewood or agricultural wastes for cooking. Institutions such as schools, hospitals and the army are also heavy firewood users. Tea factories and other rural industries use firewood as well. In Kigali, charcoal is the principal cooking fuel. 2.02 About 6 % of the land area in Rwanda is covered by trees. However, most of the natural forests, which account for about two-thirds of the total, are concentrated in a few legally protected forests and are thus unavailable for fuelwood. There are about 50,000 ha of planted forests which produce about 375,000 m3/year. This figure is far below even the lowest of the available consumption estimates. The difference comes from "mining" natural forests and from brush and trees outside of areas defined as "forests". 2.03 Accurate data on the use of firewood and agricultural wastes in rural areas are not available. A recent estimate of wood consumption, based on a survey in rural areas, puts average consumption at about 1 m3/person/year.l/ This implies a total yearly firewood use of about 5 million m3. In the more densely populated regions, agricultural wastes substitute for firewood. According to the survey, about 20% on average of the fuel used in rural areas is in the form of agricultural wastes. On farms with few cash crops, crop residues are used throughout the dry season as the main source of fuel. Farms where coffee is grown use soft residues such as banana leaves, weeds and cut grass for mulching. Hard residues such as maize, cassava and sorghum stalks and pea and bean pods are also used for fuel, and where there are cattle, dried dung also used as fuel. While it is not easy to estimate the cost in terms of agricultural production of using these materials as fuel, some studies have shown that coffee and other crop yields fall by 50% or more when mulch or organic fertilizer is not used2/* 2.04 In addition to fuel used for household cooking, various rural institutions or industries also depend almost exclusively on firewood. These include brick, tile pottery and wrought iron makers, tea and 1/ Including 0.3 m3 of wood in pieces smaller than about 4 cm in diameter. 2/ Rwanda. Integrated Forestry and Livestock Development Project SAR, May 1980. Report No. 2868a-RW.  - 13 - tobacco drying facilities, missions, hospitals and army posts and charcoal producers. Tea factories probably account for most of the industrial firewood use in Rwanda. About 4.5 m3 of firewood are required to produce 1 ton of black tea. Total tea production was about 7,500 tons in 1980, thus accounting for about 33,750 m3 of firewood/year. A few tea factories have small woodlots, but most consume wood purchased from a variety of sources. 2.05 Detailed data on supply of trees for fuelwood by region are not available but should be collected, since the severity of the problem appears to differ from place to place. Recent aerial photographs indicate a slight increase in forest cover, at least in certain areas. Regional differences are due both to climate and to population density. Rwanda is generally hilly, with elevation and rainfall gradually increasing from east to west. 2.06 Planted forest areas fall into three categories: government plantations and communal and private woodlots. Government plantations mainly provide poles for construction. They are managed by the communes but fellings can only be sanctioned by the Prefecture and the Ministry of Agriculture. Communal and private woodlots have poles cut as needed, leaving the stump to coppice and selling off larger misshapen trees for firewood. On older private farms a portion of land may be allocated to eucalyptus for both pole and fuelwood prodluction. 2.07 Woodfuels are used by most of Rwanda's small urban population as well as in rural areas. Charcoal is the principal cooking fuel for about 80% of the households in Kigali. It is estimated that Kigali consumes the equivalent of 108,000 m3 of fuelwood as charcoal each year, and another 29,000 m3 as firewood. The bulk of the supply comes from the Bugesera area, a savannah zone to the south of the capital that is being stripped of trees to supply Kigali. The transport distance for charcoal has progressively increased to 80 km, and this has been reflected in the price. In 1976 a sack of charcoal (roughly 35 kilos) cost 142 RwF, in 1978 192 RwF, and by 1981 the price had increased to 500 RwF/sack. During the rainy season, charcoal prices increase due to impassable roads, occasionally reaching 1,000 RwF/sack. Most people in Kigali purchase charcoal in small amounts costing about 40 RwF/kilo (equivalent to about 1,400 RwF/sack of 35 kilos) and it is common for 25% of the family's income to be spent on cooking fuel. Institutions and Planning 2.08 The institution responsible for the forestry sector in Rwanda is the Directorate of Waters and Forests under the Ministry of Agriculture and Livestock. In addition, there is the Groupe Forestier du Rwanda, a loose association of research institutions, government departments, loca. and prefectural authorities and organizations involved in forestry in Rwanda. It meets twice a year to discuss forestry problems, such as the protection of the remaining natural forest, forest fires, termite control, charcoal production methods and their effects on the environment. The Groupe Forestier formulates recommendations which are submitted to the Ministry of Agriculture and Livestock.  - 14 - 2.09 Planning for woodfuel (and other forest product) supply and extension programs are relatively undeveloped in an institution whose historical role has focussed on the protection of forest reserves. Recently, a comprehensive,plan to strengthen forestry planning was drawn up in the Directorate of Waters and Forests. This will provide for data collection needed to identify priority areas for action and for short and long-term policy formulation. 2.10 Forestry extension is currently very weak. Although the seriousness of the fuelwood crisis in many areas has of necessity begun to make itself evident to the population as charcoal prices increase and firewood becomes harder to gather, a well-developed conservation and extension program to make people aware that a crisis exists might help decrease its intensity. There is a serious need for well-trained, well- supervised extension workers in Rwanda. Good extension workers could assist the rural population with woodlot preparation and care and with energy efficient workstove construction. The difficulties of effective extension work should not be underestimated, however. Aside from the need to train staff and develop an institutional structure, the dispersion of Rwanda's population over rugged terrain with few people living in villages or towns creates formidable logistical difficulties. External Assistance 2.11 Most of the forestry activity in Rwanda is focussed on planting trees in one or a few areas and is financed by external agencies. The Swiss-financed Forestry Development Project (PRODEFOR) and the IDA financed Integrated Forestry and Livestock Development Project are, however, also providing more general assistance with planning and policy development as well as the extent of external interest in forestry projects. The need for planning and coordination to make the best use of available resources is perhaps best illustrated by a listing of current and planned projects: (a) Switzerland. The Swiss have been involved in the forestry sector since 1967 through the Projet Pilote Forestier (PPF). Recently the PPF focus was changed to become a Forestry Development Project (PRODEFOR). It provides for training, afforestation (about 2,000 ha in 1981), forest conservation in Nyungwe, and forestry education and exten- sion. It also provides a technical adviser to the Depart- ment of Waters and Forestry. This is the only project which attempts to deal with the overall development of the sub-sector. (b) IDA. The Bugesera/Gisaka/Migongo and Mutara projects include the reforestation of several hundred hectares. In addition, the Integrated Forestry and Livestock Development Project would include components to strengthen forestry services within the Ministry of Agriculture and Livestock, develop 8,000 ha of short-rotation plantations to supply charcoal, firewood and building poles for the urban  - 15 - populations of Kigali and Butare as well as rural woodlots to supply firewood and building poles for the rural population; development of an additional 4,000 ha as part of a long-term integrated forestry and livestock develop- ment program within the Gishwati Forest, studies and field trials of more efficient charcoal production techniques; development of new cooking methods for the rural popula- tion, project monitoring and evaluation, and further project preparation, and some scholarships in forestry, livestock and financial disciplines. (c) Germany. Agricultural intensification projects in Ramba and Gaseke communes, include reforestation of 100 ha per year. (d) African Development Bank. A project in Karago and Giciye communes, reforestation of 2,000 ha over five years. (e) UNDP. A project for agricultural development in the Gikongoro prefecture includes reforestation of western areas of the Nyungwe forest. (f) European Development Fund. A 2,000 ha reforestation project is included in its current plan. (g) Various. Some tea projects allow for the planting of 200- 400 ha to produce wood for their own use. (h) SOMIRWA. The tin foundry has begun planting trees for charcoal production near Kigali. (i) AIDR. beginning an improved cookstove project. They are developing several charcoal stove models in Brussels to introduce in Kigali. (j) Belgium. A planned project would plant 150 ha every year for 1S years on the eastern borders of the Nyungwe reserve, but this project has not yet been fully appraised and financed. Conservation 2.12 Relatively little has been done thus far to develop and intro- duce better charcoal production methods or fuel conserving cookstoves for firewood and charcoal. Charcoal is produced primarily by small-scale entrepreneurs who cut down trees and make the charcoal in nearby earthen pits. Yields by this method are very low, perhaps 20% in terms of energy efficiency. A modern efficient kiln, which could utilize gases and liquids formed during the charcoal production process, could theoretically increase overall energy efficiency to about 80%. However, an imported steel kiln might not be appropriate in the Rwandese context, and in any case it would be difficult to transport and use the by- products of charcoal production. A simpler, less expensive improved kiln  - 16 - can provide 40% energy efficiency. A masonry kiln should be tested as should other models made of local materials.l/ Before a project to improve charcoal production techniques could be successful, it would be necessary to provide an incentive to producers to conserve firewood. This could be done by licensing each producer to exploit only a specific forest area so that his total production each season would be more a function of the efficiency with which he used the wood in a given area than his speed of operation. 2.13 The typical cooking method with firewood consists of an open fire surrounded by three rocks, a very energy inefficient method. Enclosing the fire, regulating airflow into the stove and adding a chim- ney could increase efficiency by a factor of two. Various stove models have been developed which are low in cost and utilize available local materials. A large clay mass stove, known as the Lorena, is the most sophisticated, yet can still be built (by an artisan) for around $10. It is built of a clay sand mixture and has dampers to control airflow. The chimney can be made of bamboo, bricks, metal, etc. The simplest improved cookstove is little more than a wall of clay to enclose the fire and focus heat onto the cooking pot, with a small opening for a chimney. 2.14 The problems involved in an improved cookstove project are socio-economic and organizational as well as technical. Good extension work is crucial for the success of a stove dissemination project. Stove work elsewhere, e.g., Senegal and Upper Volta, has indicated that a new cookstove can be accepted and used if there is intensive field work to develop a model suitable for local conditions, heighten public interest and resolve day-to-day problems with stove use. Experience indicates that the best approach is to begin with a household sample survey evaluating cooking practices. This information can be utilized in conjunction with technical designs of improved cookstoves to develop a model suitable for field-testing. Annex I outlines a pilot project designed to test the potential of the stove improvement approach. Almost daily interaction for several weeks with the households testing the stoves is required to detect problems early and make appropriate design modifications. A large-scale stove dissemination project would require well-trained extension workers to carry out this type of follow-up. 2.15 It is likely to be easier to introduce an improved and more convenient charcoal stove in Kigali, especially if the price is modest (the cost of the average charcoal stove is currently about 150 RwF), and it can be clearly demonstrated that the stoves use less charcoal. In Kigali, charcoal is burned in a small round grill somewhat like a large tin can. Heat is lost by conduction through the thin metal sides. The charcoal grill could be improved simply and at very low cost. One way would be to make a double-walled stove and fill the space between the 1/ A kiln along these lines has been developed by Jos Mabonga Mwisaka (Uganda).  - 17 walls with an insulating layer of clay, sand or pebbles. Again, the stove should be designed in Kigali and field-tested in households before any attempt is made to introduce it on a large-scale. It might then be possible to introduce it through local stove makers and sellers, with a smaller group of extension workers who will identify and help resolve problems with the new stoves. Peat Supply 2.16 The most frequently considered substitute for fuelwood is peat. Its burning characteristics are similar to those of firewood which make it a likely energy source for rural institutions and industries, and possibly households. Estimates of Rwanda's peat reserves made in the 1960's have been shown to be excessively optimistic. Surveys to deter- mine the exact extent of exploitable peat reserves are still in pro- gress. At present, two bogs are under small scale production. 2.17 While not as slow a process as those which generate coal and oil deposits, the development of peat bogs (about 1 meter of thickness in 3000 years) is so slow that it is not in any practical sense "renewable". Peat is found in Rwanda in high-altitude, heavy rainfall areas where the cold climate holds down the rate of decomposition of plant material and water-logged conditions establish the necessary anaerobic environment. 2.18 An accurate evaluation of Rwanda's peat reserves has not yet been completed. In 1966 a botanist, Paul Deuse, made very high estimates of peat resources for several bogs based largely on surface indications, but more detailed surveys and core drillings have since shown that some areas which appear to be large peat bogs are in reality essentially papyrus mats floating on water and covered with only a thin layer of peat. The peat in other bogs has been found to have an ash content in excess of 30%, considered too high to be usable. 2.19 Although Rwanda's peat reserves appear to be less than pre- viously expected, there are two bogs currently in commercial production and others which might also be exploited. Another is in small-scale production on a pilot basis. Total reserves of these two bogs may reach 400,000 tons of dry peat.1/ 2.20 East of Ruhengeri in the Rugezi Basin there are peat reserves of potentially good quality. There is a concern that extraction of peat 1/ Peat is conventionally measured by weight adjusted to a 35% moisture content basis. On this basis, its calorific value per unit weights is 25-30X of that of oil, so a ton of peat at 35% moisture has about the calorific value of two barrels of oil.  - 18 - from those bogs could adversely affect Lakes Bulera and Ruhondo where the Ntaruka and Mukungwa power plants are located. A hydrological survey of this area is required to resolve this question. 2.21 Peat deposits are also found in the southwestern part of the country near Cyangugu. The Gishoma bog was used during the colonial period and probably still contains good useable peat. There are also two other potentially useable bogs in this area. Nyanza bog south of Gitarama also appears to contain exploitable reserves. In most of these cases as well, hydrologic studies are needed to evaluate the role of these bogs in water storage, flood control, etc., before they are either brought into production or ruled out as future energy sources. Draining these bogs and keeping water away from them to permit production of the peat would reduce their capacity to store water and may in some cases lead to flood damage. 2.22 Most of these bogs are drainable bogs, and the production techniques that would be used to exploit them relatively simple. The most extensive reserves of peat, however, are found in the Akanyaru River Basin in south central Rwanda. These bogs are characterized as "drowned valley" or nondrainable bogs and may contain millions of tons of peat. They are under water most of the year and present complex production problems. One such bog, Busoro, about 80 km south of Kigali, is now under small-scale production. During the rainy season, the Busoro bog is covered with 1 m of water and inaccessible. In the dry season, although the surface is dry, the water level is only about .3 m below the surface. This peat cannot be extracted by hand below 1 m deep due to flooding. Deuse estimated two million tons of dry peat in this bog, with an ash content of five to 25%. Production in 1980 was 150 tons at a production cost of about 1,050 RwF/ton. Estimated production for 1981 is 500 tons, and for 1982, 1,000 tons. A semi-automatic macerating machine will be tested at this bog in 1981. 2.23 Prospecting for peat downstream from the Akanyari Basin in the southeastern part of the country will be completed in 1981. If signif- icant reserves are found in areas which could be flooded after construc- tion of the Rusumo Falls dam, and if they can be economically exploited and marketed, serious consideration should be given to starting produc- tion in the near future. Demand 2.24 Peat offers a potentially attractive alternative to firewood for institutions, small industries or even household use, given the relative similarity of burning characteristics of the two fuels. At present the principal consumer of peat is OPYRRWA, the pyrethrum flower processing plant near Ruhengheri. The peat for this factory is taken from the Kiguhu bog. Two tons of dry peat are required to dry one ton of flowers, and about 1,000 tons of flowers are dried per year. A 1979 study compared the costs of using electricity, fuel oil, pyrethrum wastes and peat to raise the steam needed to refine pyrethrum extract from the dried flowers. The total annual budget for a production of 3,000 tons/year was  - 19 - 22.3 million RwF for electricity, 24.7 million for fuel oil, 11.2 for peat and 4.9 for pyrethrum wastes. A new boiler has been proposed which will use either peat or pyrethrum wastes to extend the use of those cheaper substitutes. A cement plant of 10,000 Tpa capacity near Ruhengheri uses peat from Cyabaralika as a principal fuel source. 2.25 During the colonial period a bog near Cyangugu was used for a cement plant in Zaire. Exploitation of that bog ceased when the plant closed in the early 1960s. A potential cyanamide plant could also use peat from the same bog, which is of generally good quality. A projected 6,500 T/year of calcium carbide (CaC2) would require 3,168 T of peat. 2.26 Other potential markets might be found, depending on factors such as the cost and location of production, reliability of supply, and delivered peat quality. Large institutions such as the army, hospitals and schools could in principle partially substitute peat for firewood for cooking in some areas. However, at the present time there is no bog close enough to Kigali to supply the capital with peat at a competitive price. Institutions in the Ruhengheri area could be peat users if production at Kiguhu or Cyabaralika were increased. Households in urban areas which purchase fuel are potential peat consumers, while rural households which gather all of their fuel are not likely to switch to any type of marketed fuel. 2.27 Institutions and External Assistance Exploration and development of peat in Rwanda is under the jurisdiction of the Ministry of Natural Resources, which has a geological engineer working essentially full-time on peat. Several external agencies are interested in helping with technical and financial assistance in this field, however, and as long as this assistance is forthcoming and the scope for future peat development in Rwanda remains uncertain, this arrangement seems adequate. The Irish Government is currently providing the bulk of external assistance for peat prospecting and experimental extraction (at Busoro). Some of the approximately US$380,00 i/ of assistance being provided will be used for a pilot test of briquetting of papyrus stalks for fuel during the dry season of 1981. The papyrus will be compressed and air-dried to 25% moisture. An assessment will be made of the cost of cutting, processing and transport- ing of briquettes to potential markets. UNIDO was providing technical assistance for peat development in Rwanda, but that ended in 1980. The French government will finance a feasibility study for a cyanamide plant near Cyangugu. One component will be an assessment of the possibilities of coking peat to use as fuel. Finally, the Belgian government is financing a project to use the Cyabaralika peat for a cement plant. 1/ At an exchange rate of 1 Irish pound = IJS$2.07. .  - 20 - 2.28 Recommendations The mission recommends that, (a) the Department of Waters and Forestry finish developing a forestry sector policy. A general work plan for the elaboration of a forestry policy and for forestry sector development has been drawn up for consideration; (b) the detailed analysis of current forestry resources and fuelwood consumption patterns be continued. A survey should be carried out of institutions, and industries using firewood or charcoal. All data should be presented on a regional basis to be able to determine where projects of various types would be most useful; (c) charcoal production methods should be improved and incentives offered to charcoal producers to conserve wood. Charcoal permits issued for a specific area of forest should be considered as a means to encourage producers to seek ways to produce more charcoal from a smaller amount of wood. Kilns developed elsewhere, for example masonry models, should be tested; (d) improved firewood and charcoal cookstoves should be developed. The model or models should be chosen only after preparatory field work has indicated what characteristics will suit local conditions. Stove dissemination extension work should be allocated the greater part of the project resources. (See Annex 1 for detailed terms of reference for a rural cookstove project); (e) a hydrological survey be conducted to determine more precisely the effects of extracting the apparently good quality Rugezi peatl/. A similar survey of the potential effects of exploiting the Nyungwe Forest bog is also required; (f) if prospecting in the southeast reveals exploitable peat, consideration should be given to starting production in the near future, as the dam which may eventually be constructed at Rusumo Falls would flood the bogs there; (g) large scale production of Akanyaru Basin peat should await the opportunity to compare Rwanda's experience with the 1/ A hydrological survey has also been recommended for Nyamuswaga bog in northern Burundi. It is suggested that one individual or a team might carry out the survey in both countries on the same trip to reduce costs.  - 21 - result of the IDA-financed study of alternative extraction and processing procedures, which is being carried out in conjunction with the Burundi nickel project credit; (h) if the pilot test of papyrus briquetting indicates that this procedure could provide a usable fuel at an acceptable cost, further testing and a market analysis should be carried out.  - 22 - III. OIL Overview 3.01 The petroleum sector in Rwanda is modest in scope. There is no domestic oil production or refining activity, and the country has no apparent petroleum exploration potential. Supply is entirely in the form of imported products, and demand is low, about 50,000 tons per year.or 1100 barrels per dayl/. The major issues in the sector are related to the exceptionally high cost of imported oil and the vulnerability of the supply routes to interruption. They include: (a) reducing insofar as possible the prices paid for imports, (b) preparing for possible interruptions in supply, and (c) making more efficient use of oil and exploiting opportunities for substituting lower cost forms of energy for oil. Demand and Supply 3.02 Even relative to other countries at similar per capita income levels, per capita consumption of oil products is low in Rwanda, about 13 liters per year. In rural areas, goods are customarily transported by headload. There is very little use of either motor vehicles or draft animals. Kerosene consumption is primarily for lighting and its use is very limited since most rural people cannot afford it. The low level of demand has moderated the effect of recent oil price increases on the national economy. Petroleum products in 1980 accounted for about 10% of total imports, above the average for the 1970-72 period but still a much lower figure than those of many other countries. 3.03 About half of total petroleum consumption is in the form of gasoline, and gasoline and diesel together constitute over 70% of total demand. Most of the remainder is kerosene. Largely as a result of the high cost of transportation, heavy fuel oils are little used and almost all the gasoline used is premium grade. 3.04 The unit cost of oil to Rwanda is particularly high. Product imports cost between $90 and $100 per barrel including freight but exclusive of taxes, or about twice what many other countries have to pay. The premium price paid by Rwanda reflects its geographic position, 1/ To put these figures in perspective: the largest supertankers afloat carry in excess of 500,000 tons of crude on each voyage and the Mombasa oil refinery, a modest one by world standards, is designed to process 95,000 barrels per day of crude oil.  23 - primarily through the high cost of the tranportation routes it requires but also through the disadvantage it puts the country in bargaining with a limited number of potential suppliers. 3.05 As a practical matter, there is at present only one surface route by which petroleum products can be imported. It runs from the Mombasa refinery by pipeline to Nairobi, where oil is loaded into tank trucks for a 1250 km journey to Kigali via Uganda. Costs along this transportation route are high, about 17qUS/liter or $27 per barrel, and dependence on it makes Rwanda vulnerable to interruptions in supply due to problems with transport links in other countries. In addition to the cost of transportation itself, Kenya charges a premium price for exported oil products. Gasoline and diesel fuel purchased at spot market prices in the Persian/Arabian Gulf and shipped to Mombasa would cost about 9