TOTAL AND RWANDA SIGN PACT ON RENEWABLE ENERGY.
The total has entered a partnership with Rwanda to make huge investments in the country’s renewable energy and electric mobility. The French Oil Giant which operates in more than 133 countries has signed agreement with the Rwandan Development Board which will see electric charging stations installed in Kigali, among other renewable initiatives.
The move emerged days after the signing of the Memorandum of Understanding between Total and Rwanda that was witnessed by President Paul Kagame and Total Energies Chairman and CEO, Patrick Pouyanné. Total’s interest in Rwanda’s renewable emerging market will attract expertise and experience that will launch Rwanda into a pathway for green revolution and make it a leader in the region in fulfilling international commitments to limit greenhouse gas emissions.
Much as Total already has transformed its new Energies division to achieve its ambition to become the responsible energy major and boasts of being the world’s second-ranked solar energy operator through its affiliate SunPower, the move is increasingly seen by environmentalists as a “greenwash” exercise after a group of civil society organizations launched a campaign to oppose the company’s investment in Uganda’s oil pipeline project which was seen by activists as abetting fossil fuels. It is unlikely Greenpeace and others will be impressed by New Energies, given that the division’s annual spending level is less than 1% of the total $30bn total investments into oil and gas.
Amid skepticism, Total’s entry into Rwanda’s renewable market is increasingly viewed by observers as a move to go “beyond petroleum” and establish an alternative energy business with many other African Countries. Paul Stevens, a fellow at the Chatham House thinktank, says that oil majors were no longer fit for purpose – hit by low crude prices, tightening climate change regulations and wrongheaded strategies. He argues that the only way forward for the companies lies in diversifying into green energy, drastically reducing their operations or consolidating through mega-mergers. “The prognosis for the IOCs [international oil companies] was already grim before governments became serious about climate change and the oil price collapsed. Their old business model is dying,” said Stevens, a visiting professor at University College London.
Rwanda’s agreement with TotalEnergies will include distributing and supplying energy products like LPG, developing power storage solutions and natural-based solutions for carbon storage, and initiating training programmes on new energies and energy transition. The oil giant will also forge partnerships with the Rwandese private sector which is expected to improve local investment in clean and renewable energy. Total President Mr Pouyane reiterated that the collaboration agreement illustrates TotalEnergy's commitment to deploying its multi-energy strategy in Africa, particularly in Rwanda, a country with promising economic prospects. It also comes at a time when Rwanda seeks to increase investment in the energy sector, including electric mobility with electric cars and motorcycles likely to dominate Kigali’s transport sector.
This development comes at a time when Rwanda Environment Management Authority in partnership with the the United Nations Development Fund (UNDP) launched a project last year that will see over 26,000 electric motorcycles on the country’s roads. More private companies have expressed interest in investing in electric mobility, including Ampersand Rwanda, which recently secured a $9 million loan facility from the US International Development Finance Corporation (DFC) to expand its operations in Rwanda and Kenya. There is also Safi Ride, an E-Mobility rideshare company that operates in Kigali.
Much as Rwanda has made huge investments in promoting electric mobility, which requires charging stations and more electricity, the country still lags in terms of putting in place infrastructure to power electric vehicles. The company will also work with the local private sector, which is expected to improve local investment in clean energy. One of the many obstacles to energy transition in Africa has been high initial capital, lack of investors, competition from fossil fuels and fewer subsidies compared to traditional energy sources. Total’s partnership with Rwanda’s private sector will help them put environmental sustainability at the heart of their business strategies. Additionally, the skills and technology transfer in critical areas such as renewable energies and energy transition will undoubtedly contribute to the development of local expertise in the energy sector. As African countries accelerate the use of renewable energy and head into transition to green energy, Rwanda seems to have taken huge steps in that regard.