ECONOMY-RWANDA: Banking on Gas

By IPS Correspondents Reprint | | Print |

Jean Baptiste Kayigamba

KIGALI, May 4 1998 (IPS) - Rwanda’s government is looking towards the abundant natural gas in Lake Kivu, which it shares with the Democratic Republic of Congo (DRC) to spur efforts to revive its economy.

A Cairo-based transnational has expressed interest in a multi- million-dollar project to tap Lake Kivu’s methane, one of the priority areas listed by the Kigali government, which recently adopted a policy aimed at attracting foreign investments.

South to South International Co., said to own about 61 companies all over the world, is reportedly finalising plans for investing in the gas project, ‘The New Times’, a private weekly, disclosed last week.

The Egyptian transnational, which reportedly has an annual turnover of about four billion U.S. dollars, “is carrying out feasability studies for a number of projects for investment in Rwanda, but the topmost one is the exploitation of the said natural gas,” the paper reported, quoting South to South president, Sherif A. E. Kheralby.

The Egyptian businessman visited Rwanda a few weeks ago, meeting with the Minister of Finance and Economic Planning and other senior government officials. His company has also shown an interest in other sectors such as tourism, banking, and agro- industry and intends to buy some hotels that the Rwandan government wants to privatise.

South to South is no stranger to the region. It is said to own a number of companies in neighbouring Uganda, where it runs a bank — Cairo International Bank — in the capital, Kampala.

Rwandan economic experts estimate that the methane deposits, which lie in the deep waters of Lake Kivu, amount to 70 billion cubic meters, representing 55 million tons of petroleum energy.

Geologists believe that the gas, which is of biological origin, has a regeneration capacity of 250 million cubic meters every year, and is thus a potentially good source of renewable energy.

“Methane gas exploitation represents for Rwanda one of the priority investment areas,” a senior government official told IPS.

A joint assessment carried out by the World Bank and the Rwandan government showed that if Rwanda exploited 100 million cubic meters of gas annually, it could earn 56 million U.S. dollars a year from it and cut its fuel-import bill by 30 million U.S. dollars.

The experts who carried out the assessment said they believed that Lake Kivu’s methane gas could help solve the energy-related problems of the countries of the sub-region.

Thus far, the gas has been used experimentally. The Rwanda Brewery and Lemonade Company, BRALIRWA — whose factory is located on the shores of Lake Kivu — has used it to heat its beer vats. Kivu’s methane has also been tested on a vehicle as a substitute for petroleum fuel.

Plans to exploit the gas date back decades ago when several studies were carried out jointly by officials of the Rwandan and then Zairean governments.

However, the idea failed to get off the ground, not least because the regime of late Zairean dictator Mobutu Sese Seko had little interest in regional economic cooperation.