National Biogas Programme!Analysing the case of Nepal and Rwanda""

January, 2014" "

Bermúdez-Forn, Esteban " "4218493"

Boonman, Daniel" " " "1375776"

Gámez Reyna, Oscar Alejandro "4252357"

Jarabo Diaz-Cadiel, Oscar " "4255542"

 "

i

Table&of&Contents&

1! INTRODUCTION*...............................................................................................................................*1!1.1! RESEARCH!QUESTIONS!..................................................................................................................................!2!1.1.1! Main'question'..........................................................................................................................................'2!1.1.2! Sub1questions:'.........................................................................................................................................'2!

2! COUNTRY*ANALYSIS:*NEPAL*.......................................................................................................*3!2.1! COUNTRY!OVERVIEW!.....................................................................................................................................!3!2.1.1! Environmental'overview'....................................................................................................................'5!2.1.2! History'of'biogas'production'in'Nepal'..........................................................................................'6!

2.2! ECONOMICAL!OVERVIEW!...............................................................................................................................!8!2.3! LEGAL!OVERVIEW!...........................................................................................................................................!9!2.4! TECHNOLOGICAL!OVERVIEW!.....................................................................................................................!10!

3! COUNTRY*ANALYSIS:*RWANDA*...............................................................................................*11!3.1! COUNTRY!OVERVIEW!..................................................................................................................................!11!3.1.1! Environmental'overview'..................................................................................................................'12!3.1.2! History'of'biogas'production'in'Rwanda'...................................................................................'13!

3.2! ECONOMICAL!OVERVIEW!............................................................................................................................!15!3.3! LEGAL!OVERVIEW!........................................................................................................................................!15!3.4! TECHNOLOGICAL!OVERVIEW!.....................................................................................................................!16!3.5! CIVIL!WAR!IMPACTS!ON!RWANDA’S!CONTEXT!......................................................................................!16!

4! DISCUSSION*....................................................................................................................................*17!4.1! COMPARISON!BASED!ON!J.!SACHS’!“POVERTY!TRAPS”!..........................................................................!18!4.2! PHYSICAL!GEOGRAPHY!...............................................................................................................................!18!4.3! FISCAL!TRAP!.................................................................................................................................................!20!4.4! GOVERNANCE!FAILURES!.............................................................................................................................!21!4.5! CULTURAL!BARRIERS!..................................................................................................................................!22!4.6! GEOPOLITICS!................................................................................................................................................!23!4.7! LACK!OF!INNOVATION!.................................................................................................................................!24!4.8! THE!DEMOGRAPHIC!TRAP!..........................................................................................................................!25!

5! CONCLUSION*..................................................................................................................................*27!6! BIBLIOGRAPHY*.............................................................................................................................*29!APPENDIX*..............................................................................................................................................*34!

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1 Introduction&

The aim of the current project is to analyse the development of domestic biogas programmes in Nepal and Rwanda and compare them. SNV Netherlands Development Organization has promoted biogas implementation programs worldwide, with successful and less successful results. Nepal was the first country to have a domestic biogas programme implemented in 1989, SNV’s biogas activities have since been expanded all over Asia and to Africa. Meanwhile, Rwanda was the first country to explore the technology in the latter continent in 2005.

In Figure 1, a historical comparison of the stages of development of the biogas programmes in Rwanda and Nepal is exposed. It is notorious that Nepal has a considerably longer track of record in the deployment of biogas technology, whereas Rwanda is in the early stages of development. Hence, when comparing both, it is compulsory to keep in mind this deployment mismatch.

Figure 1. Historical development of national biogas programmes in Nepal and Rwanda

Small biogas plants (also known as biodigesters) can be fed by a combination of organic waste, most often cattle manure and water in order to produce biogas. The produced biogas can offer a cleaner energy substitute for cooking and lighting than the traditional techniques and the resulting bio-slurry could be applied as an organic fertilizer (SNV, 2007). Biodigesters offer co-benefits to its users such as improved health and sanitation, reduction in fuel wood consumption, and reduced drudgery (specially for women and children who are in charge of fuel wood collection). (Bond & Templeton, 2011).

In this report, the effectiveness of the biogas programmes will be compared by defining criteria in technological, economic and social aspects of the implementation. These success criteria will be based on literature provided during the course Technology and Global Development, and available data. The objective is to determine the contribution of the biogas programmes in each country to avoid the poverty traps described by Jeffrey Sachs in his books ‘The End Poverty’ and ‘Common Wealth: Economics for a Crowded Planet’.

1980 1990 2000 2010 2020

pre 1 52 3 4

pre 1

NEPAL

RWANDA

2

6

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1.1 Research&questions&

1.1.1 Main'question'Does the Biogas Programmes (in Rwanda and Nepal) lead to the development of the country?

1.1.2 Sub1questions:'In order to answer the main question, a set of 3 sub-questions have been formulated with the aim to address specific topics about biogas development in Nepal and Rwanda:

Sub-question 1:

Which factors hinder or boost the development of the National Biogas Programme in Rwanda and Nepal?

Sub-question 2:

Has the National Biogas Programme in each country accomplished its expectations? Why?

Sub-question 3:

How do the programmes contribute to escaping the poverty trap?

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2 Country&analysis:&Nepal&

2.1 Country&overview&The Federal Democratic Republic of Nepal is a landlocked country located in South Asia. It has a population of 27.4 million inhabitants (World DataBank, 2013) and an area of 147,181 square kilometres. The country limits with China in the North and with India in the South. The country is divided in 75 districts, characterized for its mountainous landscape, as well as its fertile flat lands – Terai - in the southern region.

Nepal ranks as number 157th in the Human Development Index (HDI). The life expectancy of 69.1 years (UNDP, 2013) and a literacy rate of 48.59% (World DataBank, 2013). The country has a GDP per capita of 399.7 constant 2005 USD and an annual inflation of 5.93% (World DataBank, 2013).

From 1911 to 2013, the country’s total population grew from an estimated 5.6 million to nearly 27.4 million inhabitants. In this way, population size, density, and growth rates tend to be the highest in districts near the border with India and in districts surrounding Kathmandu. In 2011, 83 percent of the population lived in rural areas and 17 percent in urban areas, with an estimated rate of urbanization of 3.62 percent (CIA, 2013). The rural dominance in the country implies mass poverty, as 38% of the population has an income of $1.25 a day, with an average per capita income of $750 (Nepal, 2012).

The total primary energy consumption in Nepal is 9.6 Mtoe (million tonne oil equivalent) or 0.34 toe per capita, which represents one of the lowest in the world. In this way, the energy resources in Nepal are often divided in three categories: renewable, commercial and traditional. Due to the lack of sufficient commercial resources, including fossil fuels such as oil and coal and hydroelectricity, the country has a heavy reliance on traditional energy. The latter is comprised by traditional biomass resources (firewood, animal dung and agricultural residues), contributing with 87% of the total energy consumption, as can be observed in Figure 2. (Khatiwada, Seabra, Silveira, & Walter, 2012). Even though the use of renewable energy technologies (RET), mainly solar energy, biogas and micro-hydroelectricity) has been increased nearly by three-fold in the last decade, its share in the primary energy mix is still negligible, with less than 1% (Katuwal H. , 2009).

Figure 2. Primary energy consumption of Nepal (Khatiwada, Seabra, Silveira, & Walter, 2012)

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In terms of sector wise consumption, the residential sector consumes 89% of the primary energy, followed by the transport (5.2%) and industrial sectors (3.3%). These numbers provide an insight of the low level of industrial activities in the country. In fact, as the major energy-consuming sector, the residential sector meets its energy demands through traditional sources, with the fuel wood having the largest contribution (78%), as mentioned by (Nepal, 2012).

Access to power, as well as having a reliable power grid, are one of the most important challenges for the development of Nepal, as only 43.8% of the population had access to electricity in Nepal in 2010, despite of the 83,000 MW of hydropower potential the country possesses (The World Bank, 2013). This situation is given by the fact that hydropower plants have a long incubation period, including comprehensive planning, large investments and thus, large impact on the national budget. Also, in Nepal, most hydropower plants are of the run-of-the-river type, meaning that they depend strongly on seasonal river flows, not being able to provide electricity in their full capacity during the dry season. In addition, the mountainous topography of the country represents also an important bottleneck to harness the hydroelectric potential due to its lack of infrastructure. (Khatiwada, Seabra, Silveira, & Walter, 2012)

These high infrastructure costs for hydroelectricity, the increasing fossil fuel prices that have a major impact in the expenditures of the country to import these fuels, as well as the increasing global environmental demands, imply the exploration of sustainable and affordable energy sources, to aid in the development of the country.

Considering that the residential sector has the highest level of energy demands, and the main economic activities in the country, biogas presents itself as a very promising technology among other RETs to reach development. As it was previously mentioned, more than 80% of the Nepalese population lives in rural areas, reason for which agriculture represents the primary source of livelihood for most of these people. Due to the fact that agriculture in Nepal is characterized mainly by crop production, and is supported by livestock breeding, which is a common activity in the rural households, it is able to provide the input necessary for the biogas technology (Katuwal H. , 2009).

This technology acquires a higher legitimacy level among the society in Nepal, as it contributes to the solution of several environmental, social and economic issues. First, the dependence on firewood as major source of energy has resulted in the deterioration of forests and various problems associated with it, such as deforestation and soil degradation, which can be prevented with this technology. (Katuwal H. , 2009). Likewise, the usage of biogas to replace fuel wood for cooking and lighting in Nepal, contributes to a reduction of GHG emissions, being this one of the most remarkable successes of the usage of the technology in Nepal, according to (Pokharel, 2006), as 5 tCO2 can be reduced yearly with each biogas digester.

Plus, biogas is able to contribute in the reduction of several health problems such as eye infection and respiratory diseases by preventing the use of fuel wood inside the households for cooking purposes. More time required for firewood collection is another problem associated with the use of firewood that may be alleviated with the use of biogas at a household level, having a greater impact on women and children that can use the spared time for educational purposes. (Gautam, Baral, & Herat, 2009). Furthermore, the utilization of the digested bio-slurry, a by-product of the biogas, can serve as a better fertilizer than manure, leading to more productivity of the land. Finally, employment generation during the process of construction of biogas digesters, and other related activities, is another benefit of biogas in Nepal (Katuwal H. , 2009).

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2.1.1 Environmental'overview'Nepal is a landlocked country, which extends from the highest point in the world to the Terai plains. In this way, a wide diversity in landscape, altitude, topography and temperature is present in the country, which results in several land use patterns.

Lying within a subtropical monsoon climate zone, Nepal has climatic and rainfall conditions that tend to vary with elevation, ranging from subtropical summers and mild winters in the Terai plains to cool summers and severe winters in the northern mountain areas (CIA, 2013). Temperatures are inversely proportional to altitude, so that a rise of 100m implies a drop of 0.5°C in the mean annual temperature; likewise, an increment in latitude represents a decrease of 1°C of temperature (Pariyar, 2008). Hence, temperatures range from 5° C to 47° C in the Tarai Region, from 0° to 28° C in the Hill Region, and from -26° C to 16° C in the Himalayas (FRD, 2005).

The landscape of Nepal is divided into three agro-ecological zones that run laterally across the country: Mountain, Hills and Terai. This broad division is based on the altitude, crop and livestock production systems. Livestock are raised from the plains of the Terai to the rain shadow areas of the Himalayas, and there is a strong integration of crops with livestock, forestry and marketing in all agro-ecological regions. (Pariyar, 2008).

In the high hills or mountains in the high Himalayan region (more than 2500m of altitude), which covers nearly 35% of the total area of the country, the climate varies from warm temperate to alpine. Furthermore, intense geological activity is registered with more than 50 earthquakes from 1870 to 1996 (FRD, 2005). In this area, livestock production is based mainly on crops and grazing. Plant growth is limited by low temperatures and a short growing season. Livestock provide milk and fibre, and their dung is a major source of fuel (Pariyar, 2008).

The mid hills, which lie between 500 and 2,500m of altitude, cover approximately 42 percent of the total area, consisting of mountains, hills, flatlands, and valleys (FRD, 2005). In this area, livestock becomes secondary to crops. As the climate varies from subtropical to warm-temperate, the major cereals are paddy, wheat, maize and finger millet. Cattle, buffalo and goats are the main grazing livestock. In fact, livestock rearing is sedentary and animals make daily grazing forays and return every evening (Pariyar, 2008).

Finally, the Terai region, or flat river plain, (with altitude below 500m) covers 23% of Nepal’s area, being the main agricultural region, as well as the most densely populated sector (FRD, 2005). Even though the importance of chemical fertilizers for the intensive cropping is continuously increasing, manure remains as the main source of nutrient replenishment and maintenance of soil fertility. In many areas where massive deforestation has reduced the supply of firewood, dung is an important fuel. Thereby, the predominant system of livestock rearing is sedentary; nevertheless, there is less land for grazing and forest than in the hills (Pariyar, 2008).

Regarding its natural resources, Nepal can be considered as having an insufficient base for economic needs, although its scenic beauty is seen as one of the most important commercial resources. This can be attributed to the fact that fuel resources are especially scarce, as the demand of petroleum products and coal is met solely by imports (Pokharel, 2006). Therefore, renewable resources, such as biomass and hydropower become the most economically important resources; the former consisting mainly of fuel wood, agriculture residue and animal dung, whereas the latter is underutilized (Dhakal & Raut, 2010). In fact, the area of forest is 5.5 million ha or 37.4% of the total land. Forestland is almost evenly distributed between the High hills (34%), Middle hills (33%) and the Terai (34%) (Pariyar, 2008), which makes 51.5% of the forests inaccessible (Pokharel, 2006).

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Nepal suffers from several environmental problems. Firstly, agricultural runoff, human and animal wastes, as well as discharge of industrial effluents, represent prominent sources of water pollution. Furthermore, vehicular and industrial emissions are the major contributors to air pollution in urban areas (CIA, 2013). Nonetheless, deforestation and land degradation have a major impact on the population and may have critical consequences for the economic growth and individuals’ livelihoods. Land degradation is a problem attributed to population growth, improper use of agro-chemicals, and intensive use of landholdings that are too small to provide households with sufficient food (FRD, 2005). Forest loss contributes to reduced carbon dioxide sequestration, loss of biodiversity, soil erosion, and stagnant agricultural output. (Pokharel, 2006) mentions several causes of deforestation, including population growth, high fuel wood consumption and timber requirements, infrastructure projects, and conversion of forests into grazing- and cropland. Finally, fuel wood burning is a significant source of indoor air pollution and respiratory problems (FRD, 2005).

Estimates from (FAO, 2010) suggest that the rate of forest depletion between 1978 and 1994 was of 1.7% per annum. Therefore, several policies were implemented to address this problem, as is the case of the Community Forestry (CF) policy, which hands all accessible national forests to local people for their management and use, producing a change in the annual rate of forest cover to 0.06% by 2001 (FAO, 2010). However, no newer forest inventory has been performed to weight the current impact of the policy.

2.1.2 History'of'biogas'production'in'Nepal'In 1955, the first biogas plant was installed in Godavani School, followed by few experimental plants in various parts of the country. During the Energy Crisis in the Seventies, the Agricultural Development Bank of Nepal (ADBN) deployed 290 biogas plants with an interest-free loan scheme. In 1977, the Gobar Gas Company (GGC) was established as a subsidiary of ADBN and the Fuel Corporation of Nepal. The GGC organization was created with the aim to promote biogas in Nepal. (Silwal, 1999)

By 1990, the development of the biogas sub-sector in Nepal was scarce and the subsidies that were offered were not sustained regularly, therefore disturbing its market formation. After 1990, the transition from an absolute monarchy to democracy occurred and the government increased its support to the biogas sub-sector. In this same year, the government of Nepal, trough ADBN, asked for support to SNV Netherlands Development Organization. SNV performed a 1-year study about the status of biogas in Nepal, which increased the dynamism of the sub-sector. An important fact about this study is that it identified a technical potential to deploy 1.5 million biogas plants from the cattle and buffalos manure and it recommended to increase support to private sector through a consistent subsidy scheme. (Silwal, 1999)

In 1992, the Biogas Support Programme (BSP) was established. During the first stage of the programme, between 1992 and 1994, 6,824 biodigesters were installed (Katuwal & Bohara, 2009). During the first phase, the external funding was provided by the Directorate General for International Cooperation (DGIS) of the Netherlands through SNV-Nepal (BSP-Nepal, 2012).

During the second phase of the Biogas Support Programme, between 1994 and March 1997, 13,375 biodigesters were installed (Katuwal & Bohara, 2009). In 1997, the Alternative Energy Promotion Centre (AEPC) was established. The AEPC has the mission to increase access to renewable energies as well as creating capacities to support its implementation (AEPC, 2013). In the third stage of the BSP, between March 1997 and June 2003, 91,196 biodigesters were installed. During this stage, funding was provided by the Government of Nepal through AEPC and the Kreditanstalt für Wiederaufbau (KfW) of Germany (BSP-Nepal, 2012). By 1999, 60,321 biodigesters were installed in

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64 districts and 50 companies were engaged in the installation of biogas plants across the country (Silwal, 1999). In Figure 3, the annual cumulative biogas plant installations until 1999 is presented, an exponential growth can be seen.

Figure 3. Annual biogas plant installation in Nepal (Silwal, 1999)

In 2003, the Biogas Sector Partnership – Nepal (BSP-Nepal) was created. BSP-Nepal was in charge of the implementation of the fourth phase of the Biogas Support Programme; in the fourth stage, between June 2003 and June 2009, 63,196 biodigesters were installed. During this phase, trade of carbon credits was introduced.

By 2010, the biogas technology reached the 75 districts that conform Nepal and 2,769 (out of 2,915) Village Development Committees (VDC) installed biogas plants. According to Gurung and Oh, more than 93% of the biogas plants are still operational and 63 to 69% of the biodigesters that were built at the moment had a toilet connection (Gurung & Oh, 2013).

Between January 2011 and July 2012 an interim phase was conducted, in which AEPC was the executing agency and BSP-Nepal and Nepal Biogas Promotion Association (NBPA) were the implementing agencies (BSP-Nepal, 2012).

In Figure 4, the number of biogas plants installed (per year) is presented. According to the latest report of BSP-Nepal, 268,399 biogas plants have been installed so far (BSP-Nepal, 2013). In addition, 107 private companies related to the biogas sub-sector have been created (Katuwal & Bohara, 2009). Current developments since July 2012 have been developed under the direction of the National Rural and Renewable Energy Programme (NRREP) (AEPC, 2013).

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Figure 4. Number of biogas plants installed (per year) in Nepal (AEPC, 2013)

2.2 Economical&overview&

In Figure 5, the total cost of biogas plants depending on their size (in cubic meters) and location is presented. It can be confirmed that size and total costs are proportional and have a nearly linear relationship. Meanwhile, the remoteness of the location significantly affects the total cost, especially in very remote areas (depicted as “V/Remote”).

Figure 5. Total cost of Nepalese biogas plants based on size and location (BSP-Nepal, 2011)

The role of subsidies within the dissemination of biogas plants in Nepal is explained in Appendix 1. It is important to note that based on the regulations that have been set to receive such subsidies, authorities have been able to focus the deployment of the biogas technology on small bio digesters for household users. In addition, it has been offer an additional stimulus for remote locations through subsidies by offering a higher compensation based on the remoteness of the location. Nevertheless, due to the mountainous landscape of Nepal, investment costs (as shown in Figure 5) and availability of construction materials is an issue that cannot be alleviated solely by subsidies. In section 2.4, technological alternatives to reduce the investment cost of the biogas plants are presented.

In the last years, BSP-Nepal has transitioned into carbon crediting in order to complement its funding. To date, BSP-Nepal has registered four CDM projects and one Programmatic CDM project.

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500.0

1,000.0

1,500.0

2,000.0

2 4 6 8

Tota

l cos

t (E

U)

Size (m3)

Terai

Hill

Remote

V/Remote

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The latter establishes the technical and economic framework to deploy 20,000 small biogas plants that could access to carbon crediting.

2.3 Legal&overview&The Government of Nepal (GoN) has been a promoter of the biogas technology since 1975. In fact, the provision of low interest rates loans and subsidies for biogas systems is indicative of the government’s support to promote this technology. Furthermore, the GoN set a target in its 7th Five-Year Plan (1984-1989), for the installation of biogas plants. In fact, in 1984, the government introduced a subsidy representing 25% of the capital costs, and 50% of the interest payment to achieve impulse the technology (Katuwal H. , 2009). However, as mentioned by (Pokharel, 2006), these subsidies were not consistent, resulting in a low scale biogas plants installation. It was until 1992, once the significance of the technology was acknowledged, that the Biogas Support Programme (BSP) was implemented aided by the Netherlands government, leading to flat rate subsidies. Now, the GoN bears an increased share of the financial participation in the project. (BSP, 2010)

During the 8th Five-Year Plan (1992-97) a governmental institutional framework was defined to support Nepal’s alternative and decentralised energy resources. As a result, the Alternative Energy Promotion Centre (AEPC) was established under the Ministry of Environment, Science and Technology (MoEST) in 1996, with a main focus on the rural sectors. (Pokharel, 2006) Nowadays, it works under the Ministry of Environment (MoE) supervise the Biogas Sector Partnership Nepal (BSP-N), being the main executing institution, and having the control of the subsidy distribution (BSP, 2010). In addition, this institution has the task of providing policy feedback to GoN based on its experience and observations of the programme. Likewise, it aims to promote the development of appropriate rural energy technologies, and to establish strong partnership between industries, NGOs, governmental organisations, cooperatives, banks and donors; to conduct R&D on Renewable energy technologies and to ensure the proper functioning of alternative energy programmes.

Biogas Sector Partnership Nepal (BSP-Nepal) is the main implementing agency of the BSP. It was established as an NGO in 2003 to assume implementation duties of the programme, which was previously managed directly by the Netherlands Development Organization (SNV). It serves as a provider of technical support to biogas companies and users, and manages the subsidies programme to advice users about the acquisition of biogas plants. (BSP, 2010)

Regarding the international institutions of the programme, it is important to mention the Netherlands Development Organisation (SNV), which launched the Biogas Support Programme (BSP) in 1992 with the financial support of the Directorate General for International Cooperation of the Netherlands (DGIS) and operated as the implementing organisation until 2003. Currently, SNV mainly provides technical assistance to the programme and channel DGIS fund. Also, the DGIS started funding the project from the beginning, financially supporting the project management efforts and subsidies until the end of the fourth phase of the project. Also, the Kreditanstalt für Wiederaufbau of Germany (KfW) has been funding the BSP since the third phase, which started in 1997, providing back-up subsidies for the biogas plants. (BSP, 2010)

Additionally, the Nepal Biogas Promotion Association (NBPA) also works as an implementing agency, by promoting the technology within the private sector. The latter, composed of all the Biogas Companies in the country, is in charge of installing and maintaining the biogas digesters. Finally,

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banks and Microfinance Institutions (MFIs) provide loans and other financial aids to households and companies.

Considering the need for the BSP to have a positive impact on the environment, and to become a sustainable project, the World Bank signed an agreement in 2004 under the Community Development Carbon Fund (CDCF) to purchase 1 million tons of CO2 from the programme, taking advantage of the carbon trading system (Pokharel, 2006). In this way, the BSP Nepal is considered to be the first project of the country under the Clean Development Mechanism. (BSP-Nepal, 2012). In Appendix 2, the institutional setup of the Biogas Support Programme during the interim phase is presented.

2.4 Technological&overview&Biogas deployment in Nepal was characterised by the enforcement of certain practices and regulations that were uncommon in other that were undergoing the same process. For example, in order to have access to the subsidies provided by the Biogas Support Programme, installers could only use the fixed-dome GGC-2047 design for the bio digesters.

In Appendix 3, the current layout of the GGC-2047 design is presented. It has an input for the manure and possible connections to toilets, which enables the possibility to feed the bio digester with human waste. The biogas plant’s size ranges between 2, 4, 6 and 8 cubic meters (BSP-Nepal, 2013). By using human excrete, the water and manure requirements from the bio digester are reduced, which makes it more suitable for users who own a small amount of cows, for example. The GGC-2047 has a biogas outlet on top of the plant and a bio-sludge outlet that can be directed to a faucet were it could be stored.

By promoting the use of one predominant design, authorities were able to enforce strict standardisation methodologies for the materials and construction. As well as quality control practices after the installation of the biogas plants. At the beginning, criticism arose against a single-design approach, because other bio digester models promised lower investment costs or solved technological challenges that the GGC-2047 could not solve. (Silwal, 1999)

Currently, other models are available in Nepal under the BSP. For example, the ‘bag digester’ solves the high transportation costs of materials in the GGC-2047 by using a plastic bag instead of cement, stone and sand. This design is especially suitable for households situated in mountainous and remote areas. The implementation of this technology has been supported by the GIZ from Germany. (NBPA, Bag digester in Nepal, 2013)

The ‘CCEP biogas plant’ is especially addressed for household’s kitchen waste instead of animal’s dung. It employs a PVC container and it can be built a centralized factory and transported to the locations where it will be used. The latter simplifies quality control logistics. The CCEP biogas plant is still under research and development by the NBPA, if results are promising, the design will be included under the Biogas Support Programme. (NBPA, CCE-Plant in Nepal, 2013)

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3 Country&analysis:&Rwanda&

3.1 Country&overview&The Republic of Rwanda is a landlocked country. It is located in East Africa and has a population of 11.5 million inhabitants (World Databank, 2013), with the vast majority consisting of Hutu and the largest minority group consisting of Tutsi.

The adjacent countries are Uganda, Congo, Burundi and Tanzania which makes the country entirely landlocked. As a consequence, Rwanda has no (large) operational harbours. The temperature is globally the same throughout the year and the country is situated between mountains and the desert. The capital is Kigali and is located in the centre of the country. The country was first colonized by Germany and, after the First World War, Belgium took over the control until 1962. While Belgium was the leading power in Rwanda, the population was separated into the Hutu and Tutsi, leading to post-colonial conflicts between those groups (see population and recent conflicts).

Rwanda ranks as number 167th in the Human Development Index (HDI), with a life expectancy of 71.1 years (World Databank, 2013) and a literacy rate of 48.59% (World DataBank, 2013). The country has a GDP per capita of 619.93 constant 2005 USD and an annual inflation of 6.3% (World Databank, 2013).

The Hutu controlled the majority of Rwanda after a small war against the Belgium colonizers. Then, the Hutu killed large numbers of Tutsi to gain even more control when Belgium decolonized the country. The clashes between the Hutu and the Tutsi began again in 1990 until approximately 1994, killing large numbers of people on either side (H.M. Hintjes , 2001)

Although the war is over, it has had a large impact on various factors in Rwanda. One of those factors is the income: it is estimated that the GDP would be 25% to 30% higher if the war would not have occurred (Lopez, 2005). In addition, the education level is relatively low, being at some extent, another cause of the war (Verpoorten & Berlage, 2007).

Subsistence agriculture and energy usage

A large part of the population of Rwanda has subsistence agriculture, being also used to collecting firewood, due to their need of energy for cooking and other purposes (T. J. Hammons et al., 2000). The electrification rate in Rwanda, accounting for 6% (ESMAP, 2013), is far below the electrification rate in Sub-Saharan Africa, which accounts for 30.5% (59.9% in urban areas and 14.2% in rural areas) (IEA, 2011). The lack of electricity access, is substituted by the use of other sources, mainly firewood and charcoal but also petroleum products, as shown in

Figure 6. Furthermore, around 91% of the energy demand in Rwanda comes from the residential sector (RNRA, 2012). Therefore, is safe to make the simplification that most of the energy consumed in the country is used for cooking.

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Figure 6. Energy balance of Rwanda ( MININFRA, 2009)

The legitimacy of domestic biogas has the potential to increase due to the benefits it can bring to its users. For example, scarcity of wood in Rwanda due to deforestation incurs in long times to gather firewood for domestic usage. Biogas can drastically decrease the amount of firewood needed and therefore reduce the amount of time spent on firewood gathering (Bond & Templeton, 2011). In addition, the Government of Rwanda banned cutting wood without official permission from sector authorities in order to fight against deforestation (Munyehirwe, 2008). The latter, could put some pressure on the transition to cleaner energy sources for residential applications. For more details about the potential for biogas can be seen in Appendix 4.

Nevertheless, social acceptance of bio digesters has to overcome the use of firewood as the main energy source for cooking. It is important to keep in mind that around 95% of the rural households still uses firewood for cooking (Munyehirwe, 2008). However, a change in the attitude and behaviour (which is cutting wood from the forest) is difficult (G. Dekelver et al., 2005). Furthermore, as it will be explained in section 3.4, the high cost of concrete affects the construction of the biogas plants and forces to use other materials like burnt bricks, which are not widely available in Rwanda. Also, knowledge dissemination about biogas usage was spread through the Internet and the radio; nevertheless, a vast majority of the target group had no access to any of these media. (C. van Zuijlen, 2011)

3.1.1 Environmental'overview'Energy Crisis

In order to understand the biogas programme and its history, it is important to explore some of the reasons to launch of the programme. First, as it was explained above, Rwanda’s population is using wood as a major source of energy (95% of the rural population) and 40% of the foreign exchange is recycled to import petroleum related products (RNRA, 2012).

3%! 11%!

6%!

23%!57%!

Electricity!Petroleum!Agricultural waste !Charcoal!Wood !

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Furthermore, Rwanda has many opportunities to satisfy the demand of Energy, including a large potential for hydro power, solar energy and methane gas. However, this potential has not been properly exploited to date. Due to Rwanda’s landlocked condition – the fuels are transported across land –, Rwanda faces one of the highest energy prices in Africa – 22 eurocent/kWh – (Landi, Sovacool, & B.K. Eidsness, 2013). Vision 2020 is a policy created by Rwanda’s government to obtain sustainable economic transformation and growth maintained by a sustainable energy supply. Within the goals of Vision 2020, the reduction of wood consumption from 94% to 50% is considered. However, the current reality is other. Rwanda is importing 50% from the Democratic Republic of Congo due to the inability to supply sufficient energy to meet the demand (RNRA, 2012) (See Appendix 5 to explore Rwanda’s energy production system).

Deforestation:

Around 20 % of Rwanda’s surface is forest. From 1960 to 2007, Rwanda has lost about 64% of its forest, representing about 1.3% loss per year (UNEP, 2009). Deforestation is caused mainly due to the increase of population, the domestic use of wood, agriculture activities and road construction (RNRA, 2012). Moreover, deforestation is causing soil degradation and an increase of floods.

Climate:

As it was mentioned above, deforestation is causing regular floods, but also landslide and erosion. However, due to climate shocks, Rwanda is also regularly suffering droughts. Poor and agriculture are the most affected by these climate-shocks (RNRA, 2012). Record of the past 30 years has demonstrated that Rwanda is suffering some anomalies in its climate, with an increase of extreme conditions like more intensive rainfalls in a shorter period. As a consequence of the rainfall decrease, agriculture is being affected (RNRA, 2012).

3.1.2 History'of'biogas'production'in'Rwanda'

In October 2005, the Ministry of Infrastructure of the Republic of Rwanda (MININFRA) and the Netherlands Development Organization (SNV) signed a Memorandum of Understanding (MoU). The Implementation Plan (IP) claims to build a biogas sector at the same time that improve families’ quality of life (SNV, 2007). According to the SNV, the ultimate objective of the programme can be summarized as follows:

• To develop, strengthen and facilitate a commercially viable and market oriented Rwandan biogas sector;

• To increase the number of family sized, quality biogas plants with 15,000 in the country by the end of 2010;

• To ensure the continued operation of all plants installed under the programme; • To maximise the benefits of the operated plants, in particular the optimum use of effluent

The project was estimated to be US$ 14,943,630, where MININFRA was responsible to finance 25% as an investment subsidies and a US$ 4,788,730 from Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ). SNV would contribute with a subsidy of US$ 740,000.

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The Rwanda’s National Domestic Biogas Programme (NDBP) commenced in 2007. The operational and financial feasibility study of the project was entrusted to the SNV. For the feasibility study, the SNV addressed the different solutions for domestic use that could have an impact in the deforestation issue. To tackle this, SNV investigated the availability of skilled workers, building materials, considering also the household finance. (SNV, 2007).

The conclusion was that labour and the construction materials where accessible in rural areas. The labour would be trained to become masons and supervisors. The biogas plant of 6 m3 would cost US$ 859 from which the MININFRA’s subsidy (US$ 300) should be discounted. Another US$ 200 would be discounted from the willing of collaborating from farmers and unskilled labour. This resulted in a total investment of US$ 359 that should be assumed by farmers. SNV assumed the importance of the (micro) finance institutions to offer adopters biogas credit (SNV, 2007) - For more information about the funding evolution of Rwanda’s biogas programme consult Appendix 6.

However, according to Landi et al. (2013) (Landi, Sovacool, & B.K. Eidsness, 2013), to the date, the amount of biodigesters that have been installed are well below the initial goals set by the MININFRA in the Implementation Plan in 2005. By 2010, only 2,600 biodigesters were constructed from the 15,000 that were initially planned, even considering the high involvement from Rwanda’s government (C. van Zuijlen, 2011). The latter can be confirmed in Figure 7:

Figure 7. Deployment of biodigesters in Rwanda (F. ter Heegde et al., 2010)

The requirements for being qualified for the subsidy are strict. Some of the requirements to be fulfilled by the household, in order to obtain the subsidy, are as follows (Landi, Sovacool, & B.K. Eidsness, 2013):

• Only one plant per household for domestic use • Only for plant design approved which fulfil programme’s technical requirements • The famer lives in the farm and owns it, and at least has minimum amount of animals to

feed the biodigester • Availability of water, the biodigester should be placed in less than 20 m from the kitchen and

the cattle shed

101! 120! 213!

627! 670!

1,731!

1,200!

2,261!

0!

500!

1,000!

1,500!

2,000!

2,500!

2007! 2008! 2009! 2010! 2011! Total!

Built digesters!Forecast production!

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3.2 Economical&overview&

The major financial issue to solve is caused by the fact that the programme does not produce direct revenues to the funding parties. Therefore, the availability of credit is limited. This, in combination with the reduced capacity of Rwandese families to assume the investment creates a complex environment for the programme. Rwandese find easier to continue using the ‘free’ natural resources (wood, etc.) rather than invest in a technology that is expensive to their pockets (Landi, Sovacool, & B.K. Eidsness, 2013).

Furthermore, apart from the risk that financial companies assume at providing the credits for a technology with no direct returns, Rwanda’s financial sector is immature and lack of expertise about sustainable projects.

As it was mentioned previously, in the feasibility study, carbon credits were explored or suggested as a possibility to provide cash to farmers. The idea was to adhere to some of the Kyoto protocol’s financing scheme. However, the process is deadlocked.

The revenues accomplished from the beginning of the programme to 2011 have grown considerably, from $133,800 in 2007 to $1.2 million in 2011. The programme has also created jobs and opportunities for entrepreneurs. A total of 53 biogas companies were active in 2011. Another important contribution of the programme is the creation of skilled personnel such as masons or supervisors (Landi, Sovacool, & B.K. Eidsness, 2013).

Lastly, to promote the construction of biogas digesters, construction companies can now get up to 30 dollars for the construction of such a digester.

3.3 Legal&overview&The National Domestic Biogas Programme Office is the main institution controlling the biogas programme of Rwanda. The Rwandan Ministry of Infrastructure (MININFRA) controls this institution in itself. These organisations are supported by the SNV, which mainly gives technical support and assistance. However, as of 2011, the Energy Water and Sanitation Agency (EWSA) has taken over the main execution tasks and the MINIFRA only subsidizes the project (Michel, 2011).

The national policies in Rwanda are largely in favour of the biogas programme. This is due to the fact that the national policy of Rwanda is towards the promotion of sustainable programmes. Also, it should be noted that the government of Rwanda wants to limit the deforestation and banned cutting wood without permission, creating a large potential demand for biogas, since this could be a great alternative.

Also, the zero-grazing law (a law that limits the grazing in the forest) and the one-cow per family law (a law that limits the amount of allowed cows for a family to one) contributes towards the integration of biogas, since following these laws makes it easier to collect the dung needed for the biogas digester.

However, the large influence of the government into the programme made the programme inflexible. Also, recent laws banned the usage of bricks in biogas digesters. Thus, concrete have to be used again, raising the price of the digesters (refer to section 3.2). Also, the government was too optimistic

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about the biogas integration; the actual numbers of digesters built are lower than the predicted numbers.

Due to the fact that Rwanda was the first country of the SNV programme in Africa, it was hard to address cultural differences between African and Asian countries, where the SNV programme was already deployed. This lead to some cultural and adaptation issues regarding some specific legalisations, such as corruption (C. van Zuijlen, 2011).

3.4 Technological&overview&In Rwanda, the fixed-dome biodigester is used. It has large similarities with the biogas digesters which are used in Nepal, except for the fact that in the digesters in Rwanda, mainly burnt bricks are used instead of concrete, due to the fact that the price for concrete is high in Africa (C. van Zuijlen, 2011).

The most common size of a digester is about 6m3. This can lead to a constant output which is enough to cook 3 hours a day or provide light for 9 hours a day (C. van Zuijlen, 2011). Different to Nepal, other technological topologies for the biodigester have not been explored.

3.5 Civil&War&impacts&on&Rwanda’s&context&

The Rwanda’s civil war and genocide have caused a number of catastrophic consequences that continue to be present. They have hampered the development of the country and have influenced the NDBP. These could be summarised as follow:

• The low electricity usage in Rwanda can be subscripted to the fact that many farmers live in remote areas, also large parts of the electricity infrastructure were destroyed during the civil war in Rwanda (Verpoorten & Berlage, 2007).

• During the genocide, many household and farmers left their field unattended. As a consequence, one of the most important contributions to Rwanda’s economy was inefficient and some of the infrastructures were completely lost. The agricultural sector recovered its level of 1990 only in 2002 (Verpoorten & Berlage, 2007).

• One of the causes for the lack of knowledge and skilled labour could be as a direct result of the genocide, where “educated or politically active Hutu” were targeted by the Rwandan Patriotic Army (Verwimp P. , 2003).

• After the 1992 fighting, around 1 million people were pushed to move from the North to the South. This event also contributed to the deforestation during the years of the genocide, where refugees took down trees to use the wood (Kanyamibwa, 1998). Another consequence of the war, on the deforestation is the suspension of National Parks protection. This has resulted in soil degradation and an increase of floods.

• The economy of the households also resulted heavily affected by the genocide. As it was explained before, due to the conflict, many farmers left their crops unattended (Verpoorten & Berlage, 2007). Consequently, agricultural production was affected and its infrastructures deteriorated. This could have leaded to a reduction, if not a completed loss, of savings. Therefore, the possibility to lend money between family members or friends was vanished.

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4 Discussion&

It is evident that the level of deployment of domestic biogas in Nepal is considerably more advanced than in Rwanda. Nevertheless, it is important to remember the number of years each country has spent in the development of their respective biogas programmes. Figure 8 presents the cumulative domestic biogas plants constructed in Nepal and Rwanda by the end of each stage of the respective biogas programmes. It is notorious that Nepal has the longest track of record as well as significantly higher number of biogas plants installed, even in the first stages of deployment.

Figure 8. Cumulative domestic biogas plants installed in Nepal and Rwanda

Before the launch of the Biogas Support Programme (BSP) in Nepal, opposite to what happened with the National Domestic Biogas Programme (NDBP) in Rwanda, there was a growing market for domestic biogas plants. In Nepal, the BSP was created as a necessity to steer the biogas sub-sector, whereas in Rwanda the potential market was overlooked (as it will be explained in section 4.1). In the early stages Nepal also faced significant challenges to reduce the capital cost of the biogas plants in order to be able to make the technology more available for the poorest users and the users located in the most remote areas (Silwal, 1999). Likewise, Rwanda is facing a similar challenge in the deployment of their NDBP and has not been able to solve the high capital costs yet. In Nepal, it took several stages of the BSP to steer technological innovation and look into other technological alternatives that were not viable at the beginning of the programme (refer to section 2.4).

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Many other African countries that are part of the African Biogas Partnership Programme (ABPP) also face a barrier because of high capital costs. Though, they have leapfrogged to other small biodigester topologies that can reduce transportation costs or benefit from economies of scale (Castro, 2013). Sadly, Rwanda is not an active member of the ABPP and has not followed the learnt lessons shared by the rest of the members of the ABPP.

In the next section a thorough comparison between the biogas programmes in Nepal and Rwanda is presented based on J. Sachs’ poverty traps.

4.1 Comparison&based&on&J.&Sachs’&“poverty&traps”&

In order to compare the biogas programmes in between Nepal and Rwanda. The main indicators that will be considered are based on J. Sachs’ “poverty traps” presented in his book, The End of Poverty (2005). These poverty traps give an indication why the poorest countries are trapped inside their poverty (Sachs, 2005). Therefore, it is relevant to understand the relationship between the biogas programmes in each country and understand whether they have contributed to reduce the burden of such trap or not.

4.2 Physical&geography&The physical landscape of Rwanda is very favourable for large-scale food production, since the majority of the ground is humid enough and has a lot of minerals needed for food production, being also an ideal environment for the operation of biogas digesters. As (Sachs J. , 2008) mentions, geography represents an important factor to model the economic development of a country. For Rwanda, a possible downside, especially for foreign trade concerns, is that Rwanda has no direct access to a sea, thus lacking possible harbour locations, limiting in this way the development of Rwanda due to the increased costs incurred by the terrestrial transportation of goods. This could explain the high cost of materials for the bio digester construction, impacting on the farmer’s ability to afford the initial investment cost.

Another downside is that Rwanda has an ideal climate for various diseases, with one of the most dangerous being Malaria. This is a major concern in the development of Rwanda, as the costs of health care raise, not allowing the country to generate the necessary savings to invest in the biogas technology. In addition, as (Sachs J. , 2008) mentions, regions that are prone to disease are less likely to attract foreign investment, aggravating the poverty trap.

Furthermore, the use of wood is impacting in the ecosystem by eroding the lands, hampering its use for agriculture. Moreover, deforestation and climate change cause not only landslide and erosion, but also regular floods. Likewise, Rwanda is regularly suffering droughts, so that agricultural practices become the most affected by these climate-shocks (RNRA, 2012). The repeated setbacks that these natural hazards imply, hamper the success of the NDBP, so that the benefits that it could bring regarding the reduction of deforestation become minimal, causing the duration of this poverty trap to be extended (Sachs J. , 2008).

For the case of Nepal, just as Rwanda, it is a landlocked country with a large percentage of its territory corresponding to mountainous landscape, has as a consequence that it has to face high transport costs due to the lack of infrastructure of the country, which includes 59km of railroad network and 10844 km of roadways (CIA, 2013), with only 43% of the population having access to paved roads (The World Bank, 2014). Furthermore, the scarcity of fossil fuel resources has pushed the country to import most of its oil to satisfy its energy needs, as it was mentioned previously. In

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this way, although there is no direct evidence that the Biogas Support Programme has contributed to the improvement of the infrastructure of Nepal by increasing the transport network. Also, there is also no evidence that the programme improved number of connections of households to the electrical grid in Nepal. It does, however, offer solutions to break the poverty trap.

Firstly, the introduction of differential subsidies to promote the construction of bio digesters in the different regions of Nepal, already takes into account the difficulties encountered due to the poor infrastructure to transport construction materials to the mountain and hill districts. Also, it offers an alternative bio digester technology (e.g. the ‘bag digester’) to be applicable in the latter districts due to its low transportation costs. In addition, the introduction of biogas plants in the residential sector, which has the highest energy demand, alleviates the urgency of connecting the households into the electricity network. In the future, it could also lead to the reduction of oil imports to meet the energy needs of the country, contributing to increased savings, which are acknowledged by (Sachs J. , 2008) to be an important factor to overcome the poverty trap.

Also, as fuel wood represents the largest share in the primary energy consumption, it poses a threat to the ecosystem by means of deforestation and erosion of the land, finally impacting the agricultural activities, from which Nepal’s economy is most dependent. Nevertheless, the installation of a bio digester implies a reduction in the fuel wood consumption at the household level, from approximately 6632kg/year to 3120kg/year in average (Latipur, 2011), not only taking care of the agricultural productivity, but also saving time that the population spends collecting wood, so that it can be used in other activities to escape the poverty trap.

It is possible to observe several similarities between Nepal and Rwanda, regarding the geographical obstacles these countries must face to reach development. Firstly, both countries are landlocked, already being set at disadvantage in comparison with other countries that have access to the seas and to the main trade routes.

Also, the deforestation is and was an important environmental issue, which directly affects the agricultural productivity of both countries by eroding the lands and making them more vulnerable to natural hazards. In this way, the strategy for the introduction of the respective biogas national programmes in both countries has played a major role in the challenge that escaping the poverty trap represents.

In Nepal, the geographical difficulties are considered with the introduction of differential subsidies depending on the geographical region in which the users are located (e.g. in the Terai or Mountains), while in Rwanda, it has not been able to incentivize users that live in areas prone to droughts.

As a result, the poverty trap aggravates in Rwanda, because no plan of action is set against deforestation and malaria, whereas in Nepal, a solution has already started to materialize for deforestation, leading to improved agricultural productivity in the future. For this case however, it should be noted that Nepal is further in the development of the biogas programme, so it can be unfair to compare this directly.

Thus, the Rwandese government should establish differentiated funds to aid users with the initial investment, according to the threats that environment poses for them, thus as Nepal did. This could be integrated in one of the next steps in Rwanda, to aid in further development of the biogas programme. Furthermore, a comprehensive solution that includes health care and/or prevention against malaria could serve as an incentive, especially for Rwanda, to break the poverty trap and put themselves in the way to development.

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4.3 Fiscal&trap&Rwanda is a landlocked country. As a result, Rwanda does not count with ports to bring raw materials. This in combination to the lack of railways – 0 Km constructed (NationMaster, 2008)- and few connections to neighbour countries by road, increased the price of materials –like concrete- for the biogas programme. In addition, Rwanda’s government support to the biogas programme is high, but a lack of investments in other infrastructures creates barriers for the development of the biogas programme. In section 3.1, it was explored that Rwanda has potential for energy production, but scarce of infrastructures.

One of the reasons for this could be the taxation. The social contribution percentage of revenue in Rwanda is 1.73% (NationMaster, 2008). This leads to a reduction on the government capacity to collect money in order to invest on infrastructures. Also, agricultural infrastructures and savings were reduced by the effects of the civil war between the Tutsi and Hutu, which lead to a decrease in the ability to invest by themselves in the biogas programme. Savings and investments are important to mobilize new technologies in order to obtain economic development (Sachs J. , 2008). Additionally, after the civil war, the national debt of Rwanda peaked with 119.5% of the GPD by December 1995 (Trading Economics, 2013). In December 2008, the debt plummeted to a minimum of 21.4% of the GDP. The present government debt is 25.1 (Trading Economics, 2013).

In the case of Nepal, the Biogas Support Programme (BSP) has had a significant dependence on subsidies since its creation (as explained in Appendix 1). These subsidies have helped the biogas users to overcome the initial investment costs. In addition, the access to such subsidies has been dependent on the fulfilment of strict quality control practices with regard to materials, technology and operation. Hence, contributing to steer biogas technology based on the goals of BSP over the last 20 years. Even though, there has been a decreasing trend over the last 10 years, Nepalese government’s debt to GDP recorded 32.5% (of the GDP) in the fiscal year of 2011–2012 (Trading Economics, 2013). Consequently, the heavy dependence of the BSP on government subsidies has forced its promoters to find alternative ways to fund the economic incentives it offers.

During the fourth stage of the BSP (between June 2003 and June 2009) the trade of carbon credits was introduced through the Clean Development Mechanism (CDM). To date, four CDM projects have been registered by BSP-Nepal with a total greenhouse emission reduction of 207,000 tCO2e per year. In 2010, a programmatic CDM project for the construction of 20,000 small biogas plants was successfully registered by BSP-Nepal, being amongst the few countries that have successfully implemented such type of projects. (UNEP Risø, 2014)

In the end, both biogas programs were principally supported by subsidies to overcome the initial investment cost. However, in Rwanda’s case, the war depleted the family’s savings and agricultural resources, impacting in the farmers’ ability to assume any investment by their own. This could have been one of the most important factors to influence the biogas diffusion, even in the early stages of the biogas programme. Therefore, solutions to overcome this problem could benefit Rwanda, in order to aid the development of its early stages of the programme. This could be done by financing the construction of the bio digester by obtaining carbon credits for families that are not able to afford the rest of the investment cost, similar to what happened in the later (4th) development stage in Nepal.

For both countries, a possible solution to develop the programme could be the investment on R&D programs to build bio digesters with local materials, instead of imported materials, as both countries

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are landlocked. Nevertheless, investment from external institutions is crucial to support R&D centres, this holds for Rwanda as well as Nepal.

Lastly, Rwanda’s government should continuously invests on infrastructures to connect with adjacent countries to reduce the cost of importing/exporting materials as it has poor connections with adjacent countries, unlike Nepal.

4.4 Governance&failures&The National Domestic Biogas Programme Office is the main institution controlling the biogas programme of Rwanda. The Rwandan Ministry of Infrastructure (MININFRA) controls this institution in itself. These organisations are supported by the SNV, which mainly provides technical support and assistance. However, as of 2011, the Energy Water and Sanitation Agency (EWSA) has taken over the main execution tasks and the MINIFRA only subsidizes the project (Michel, 2011).

The national policies in Rwanda are largely in favour of the biogas programme. This is due to the fact that the national policy of Rwanda is favourable towards the promotion of sustainable programmes. Also, it should be noted that the government of Rwanda wants to limit the deforestation and ban cutting wood (without permission), creating a large potential demand for biogas, since this could be a great alternative.

Also, Rwanda is doing relatively well in comparison with other African countries in terms of corruption. But still, the corruption is, compared to the rest of the world, relatively high, which could also limit the development of Rwanda and can put constraints on the biogas programme (ACRC, 2008).

The internal stability of Rwanda is favourable, the tensions between Hutu and Tutsi are reduced. This reduction of tensions is favourable for the development and investment in technologies, as the biodigesters.

In the case of Nepal, the government acts as a primary promoter of biogas, forming an important part of the Renewable Energy Sector Support Programme Nepal (RESS) (De Castro, 2005), and actively supporting the BSP since its creation. This constant support of the programme by the government has conducted to an environment where private investments in the technology are common, as well as to entrepreneurial activities. Furthermore, the introduction of programmes such as the Community Forestry (CF) to prevent deforestation, show consistency in the aim of reaching sustainability by the government, and at the same time can lead to further adaptation of biogas technologies to reduce its fuel needs, from the wood.

In this way, Nepal policies seem to be oriented to overcome two important obstacles that are mentioned by (Sachs J. , 2008) to accelerate economic growth and take advantage of the available knowledge across the globe: the inclusion of public and private capital and the adaptation to local ecology.

Even though the programme has been operating successfully in terms of installed capacity, it faces the threat of political instability. This has its origin in the civil war in the country that occurred between 1996 and 2006 between Maoist extremists and government forces, and continues due to the inability of the political forces to draft a new constitution, so that even though a Peace Agreement exists since 2006, still an interim constitution is valid, and security in certain districts is still an issue.

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However, as the BSP aims to include all sectors of the society, while addressing the disparities in economic opportunities, the threat is lowered (De Castro, 2005), so that Nepal might be able to escape the poverty trap by supporting this type of programmes.

Regarding to the internal stability, the tensions in Rwanda have been reduced, which could favour the futures success of the biogas program. In contrast, the tension in Nepal has grown with the civil war. However, the stability of the program is guaranteed due to the Peace Agreement and the inclusion of all population sectors in the program.

Both governments emphasized the creation of policies to promote the biogas program in order to obtain some of the benefits such as reducing deforestation. Furthermore, both governments highly supported the diffusion of the program by subsidizing thereof. However, the result on the development of a private sector that could positively impact the economy has been different in both countries. While a private sector around the biogas program in Nepal has been successful, the result on Rwanda has not been as good as desired. This however, could also be the case since the development of the programme in Nepal is more mature. However, if one compares the early stages of the programme between Rwanda and Nepal, one could see that it can partially be attributed to adjacent factors such as the farmer’s (in)ability to afford initial investment, which reduced the demand for biogas digesters in the case of Rwanda. As a consequence of a lack of demand, the development of a private sector could have been hampered.

4.5 Cultural&barriers&Certainly, this is an important trap in the case of Rwanda. The civil war was cultural in nature. The clashes between the Hutu and the Tutsi began again in 1990 until approximately 1994, killing large numbers of people on either side (H.M. Hintjes , 2001). Although the war is over, it has had a large contribution to various factors in Rwanda. For example, the education level is relatively low and this is partly also the cause of the war (Verpoorten & Berlage, 2007). Regarding the impact on the biogas programme, the genocide could have brought as a result the lack of knowledge and skilled labour, since “educated or politically active” Hutu were targeted by the Rwandan Patriotic Army (Verwimp P. , 2003). This could be seen as a type of “ethnic cleansing” (Sachs J. , 2008). However, the stability has been increased and has contributed to the creation of jobs, opportunities for entrepreneurs and skilled labour.

Agriculture productivity is very important to climb the development ladder (Sachs J. , 2008). Although Rwanda has optimal conditions for production, unsustainable agricultural practices make Rwanda be dependent of food imports and international aids to feed the population (Landi, Sovacool, & B.K. Eidsness, 2013). One of the positive impacts for the biogas program could have been the increase in the agricultural productivity by the production of by-products such as compost. However, as it was seen in section 5.5, due to the war, many agricultural infrastructures and lands were unattended, having an impact on the productivity. At the same time, due to the early stage of the program, it has not had an important impact on time that woman and children could expend on other activities such as education or agriculture productivity.

As far as Nepal is concerned, Nepal has also suffered a civil war. Nonetheless, agreements to guarantee the peace and to not affect the diffusion of the technology has been implemented. As a consequence of this and due to the larger time the program has been active, the results to escape from this poverty trap are different. First, part of the positive adoption of small biogas plants in

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Nepal has relied on the fact that agriculture is a significant economic activity in Nepal and the inclusion of a biogas plant within small farms can actually improve the productivity of the crops as well as the quality of life of its users.

Moreover, according to the last Annual Biogas User’s Survey 2009/2010, only 2.22% of the respondents were not satisfied with the installation of their biogas plant. The main reason for satisfaction amongst the remaining 97.04% of the surveyed respondents relied on the fact that since the installation of the biodigesters they enjoyed of time saving in cooking and a smokeless cooking environment. In addition, 91.85% of the surveyed respondents confirmed that they use the slurry from their biodigester to make compost in their farms. With regard to increase in the crop productivity, 37.66% of the respondents in Terai and 58.72% of Mountainous region respondents confirmed a productivity increase above 10%. (AEPC, 2011). A possible explanation for the acceptance of the technology could be that the program has been active sufficient time to observe the benefits.

To conclude, both countries has been throughout a civil war. Peace agreements on Nepal has been obtained to guarantee stability and this contributed to the creation of an industry around biogas technology. In contrast, although the biogas program has contributed to the creation of companies and skilled labour in both countries, Rwandan biogas program has slightly impacted on its economy. The civil war have had a negative impact on the skilled labour and educated people. Therefore, there is still needed an education of the population for increasing company’s absorptive capacity to increase knowledge absorption about the technology. Company’s absorptive capacity is dependent on employees’ ability to understand and apply the knowledge. Without educated population, Rwandese entrepreneurs’ possibility to expand their business is reduced. In contrast, Nepal biogas program has been running long sufficient to increase knowledge about the technology and create an economic activity.

4.6 Geopolitics&As it was mentioned before, Rwanda is a landlocked by Burundi, Uganda, Tanzania and the Democratic republic of Congo. Rwanda has disputed sections of territory with Burundi, near various rivers. In addition, the relation with the Democratic republic of Congo was under tension, since Rwanda invaded East Congo in the 1996, impacting in the relation between the two countries. The relation of Rwanda and Tanzania is also under tension. Since Rwanda is a landlocked country and problematic relations with the neighbouring countries, commercial trades are limited. As a result, the biogas programme and economic development of the country have been affected. An enhanced trading with adjacent countries could reduce the construction materials for the biodigerter, which heavy reliance on imported materials.

Additionally, the African Biogas Partnership Programme (ABPP) is present in all the countries next to Rwanda (except Burundi). The ABPP has done a remarkable labour to create knowledge networks and share experience among its members. An adherence to the ABPP entails the possibility to access to carbon credits for the biogas plants under Rwanda’s national biogas programme (UNEP Risø, 2014). Unfortunately, even though Rwanda was an initial member of the ABPP, its role is not as active as the rest of the countries within this regional programme.

Burundi is an unstable countries. It suffered a civil war (between Hutu and Tutsi ) which lasted until 2005 (USIOP, 2004). Instability in adjacent countries could have a severe impact on the present and future stability of Rwanda, and can even drag Rwanda into another (civil) war. All in all, the geopolitics are unfavourable for Rwanda and the biogas programme.

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Similarly to Rwanda, Nepal is also located (by China and India). Both limiting countries are leaders in the domestic biogas industry: China accounts for 41.68 million domestic biogas users (Cheng, Li, Mang, & Huba, 2013), meanwhile India accounts for 4 million users (Bond, T; Templeton, M.R., 2011). Nepal has also been suffering conflicts with its adjacent countries. Conflicts with China are referred to Tibet’s territory and control as well as political differences. Another conflict reason that affects the political and economic relationships is the disparity in scale between Nepal and both limiting countries (U.S. Library of Congress, n.d.).

Despite the political tensions, China has provided assistance to Nepal under a Bilateral Agreement of Economic and Technical Cooperation since 1956 as well as an Inter-Governmental Economic and Trade Committee in 1982. The trade between both countries has grown considerably in the last years, but presents a significant imbalance between imports and exports. Nevertheless, China is considered as a “top most investor” in Nepal (Nepal's Ministry of Foreign Affairs, 2012). Similarly, despite the conflicts with India, both (India and Nepal) share an open border. In addition, India has assisted with infrastructure and human resources in Nepal and is considered to be the largest trading partner of Nepal. Since the Nepal is a landlocked country, India represents the closest mean for Nepalese exports to reach harbours (Nepal's Ministry of Foreign Affairs, 2013).

Hence, technological spillovers with the aforementioned countries with regard to domestic biogas could occur. However, no sufficient evidences were found aside from the similarities in the technological topologies used in Nepal, which are considered to be created in China and widely adopted by India.

Geopolitics becomes more critical in both countries due to the fact that they are both landlocked. Specifically for Rwanda, the instability in its neighbouring countries aggravates the environment for trade and possesses a latent menace for conflicts. Rwanda's National Domestic Biogas Programme has not been able to overcome the biodigester's high initial costs, caused by high prices on imported materials which is partly caused by the lack of relevant trade agreements with its neighbouring countries. In addition, the exclusion of Rwanda from the African Biogas Partnership Programme (ABPP) blocks the exchanges in technical assistance. In contrast, the large experience with the technology in Nepal, the location-based subsidies and trading agreements with India and China have contributed to overcome the price of the construction materials, improving imports-exports trade. Nevertheless, as it was established before, no conclusive evidences were found during our research regarding to relevant technological sharing schemes with adjacent countries in neither cases. In spite of that, Nepal has conducted its own innovation programmes to steer biogas technology.

4.7 Lack&of&innovation&fact that the majority of the farmers are poor and find the technology expensive created a lack of demand for biodigester. As a consequence, and in spite of Rwanda’s government effort to create a biogas private sector, innovators lack of the needed motivation to innovate around a barely demanded technology. Therefore, the Rwandan biogas program has merely achieved the creation of few jobs and opportunities. This could have had a negative impact on the development of private capital and a financial entities which are needed for the economic development (Sachs, 2008). As a result, Rwanda has not been able to create endogenous growth.

As far as Nepal is concerned, the Biogas Support Programme has a strong commitment to steer entrepreneurship in Nepal. It has incurred in the creation of 107 private companies related to the biogas sub-sector since the creation of the programme (Katuwal & Bohara, 2009) and one of the most successful deployment of small biogas plants in the world. In addition, the country started

25

receiving both, technical and economic support from international organizations, such as SNV, DGIS, GIZ and KfW. This importation of technical know-how as well as the reception of capital from external agents, can be recognized as the first step to break the poverty trap related to the lack of innovation in the country (Sachs J. , 2008).

In fact, the intervention of these external institutions, aided by the subsidies created, developed an ecosystem around the technology composed by new private companies, new public institutions, and even financial institutions (providing micro-credits). Consequently, research and development efforts were also promoted, thus resulting in the creation of different biodigester concepts, without importing external technical knowledge. Additionally, the establishment of new institutions and the promotion of entrepreneurial activities is a signal of the investments done due to an increase in savings, which are generated by the installation of a large number of biogas plants, and the new funds coming from the carbon trading market. According to (Sachs, 2005), the new market created around the installation and maintenance of biogas plants, represents an incentive for innovation, in a way that this cycle can be translated into sustained growth (Sachs J. , 2008).

Both countries have imported the technology and the knowledge from organizations such as SNV or GIZ. However, this have leaded to different outcomes. In Nepal, a private sector was created, including financial institutions. In contrast, the scarcity of demand - caused by the Rwandese’s inability to afford the investment cost - obstructed the development of financial institutions that could provide micro-credits. In addition, knowledgeable workers are still limited and education levels low - in part due to the civil war – hampering the absorption of knowledge from these institutions. This is aggravated by the fact that knowledge is path-dependent and relies on prior knowledge for its absorption (Cohen & Levinthal, 1990). Without knowledge about the technology, Rwandan entrepreneurs’ capacity to innovate is limited. In contrast, Nepal biogas program has been running sufficiently, including a prior attempt, to improve knowledge absorption and technology's knowhow. This had increased innovation by the development of new generations of biodigesters in what can be qualified as an era of ferment (Tushman & Rosenkopf, 1992). Furthermore, the Nepali extensive experience in running the program contributed to obtain feedback from the users, and understand particularities of the local environment – adaption to the local ecology (Sachs J. , 2008). Therefore, exploration of possible technological improvements could be researched, leading to different biodigesters models to serve different environments.

4.8 The&demographic&trap&

The majority of the population, about 82%, lives in rural areas (Nation Master, 2014). The vast majority of the biogas digesters are also placed in rural areas. The population growth is more than 7% annually which is, according to Sachs, one of the main reasons for the demographic trap. Since families have to raise a great deal of children, education and health are a second priority in their investment. This could lead to high fertility rates for the next uneducated generation. As a consequence, the biogas programme might be lacking of future innovations, since an uneducated population would be hampered to innovate. Moreover, since the size of the population will grow dramatically, the stresses on farm sizes and environmental resources could be enormous, impacting on the biogas programme.

The literacy rate of women is currently 82%, in comparison with males (thus, lacking behind). According to Sachs, a possible way to battle overpopulation is to educate women. Educated women could join the working force more easily and the ‘cost’ of staying at home, to raise children, will increase and fertility rate diminish. Biogas innovations could be positivity affected since there will be more educated people.

26

Similarly to Rwanda, 83% of Nepal’s population is concentrated in rural areas, trapped under severe poverty. Therefore, the installation of biogas plants is also targeted to rural areas, considering that the residential sector is the most energy demanding. This technology is able to contribute to escaping the poverty trap, since can aid in the reduction of workload and women empowerment (Katuwal & Bohara, 2009). Before the installation, women spent most of their time doing household activities related, such as firewood collection, livestock caring, and dung preparation for cooking. After the installation of biogas digesters, they have been able to save time and spend it in activities such as education and social activities. In fact, 35% of women with a biogas plant in their households spent their time in this kind of activities, whereas 28% of them used their time in income generating activities, both leading to community development (Katuwal & Bohara, 2009).

The increase in the educational level, as well as the empowerment level that women acquire, causes in the long run a decrease of the fertility rates of the country, in agreement with (Sachs, 2005). In fact, the Total Fertility Rate (TFR) of the country has decreased from 4.68 to 2.36 in the period of 1992 to 2013, leading to a population growth rate of 1.81% (CIA, 2013). However, even if the BSP contributes to the decrease of the TFR, a deeper demographic analysis must be done to determine with accuracy the extent of the programme’s impact in it; nonetheless, such an analysis is out of the scope of this document.

The benefit of the biogas technology could be the same for both countries. It becomes clear that the feedback this trap gives to the national biogas programmes of the two countries depends on the effectiveness of the programme itself. Thereby, due to the longevity and the relatively fast diffusion of the programme, Nepal has started to observe success regarding to time reduction for women and children from activities such as firewood collection, which reflects on the additional time that these social groups can dedicate to activities such as education or even social events. On the other hand, Rwanda, with only a small fraction of the planned biodigesters, and far behind in biogas technological progress, cannot observe these type of benefits that are brought by the programme. The longevity of the Nepali program allow to see the future benefits that Rwanda could obtain. Hence, more attention must be put to the proper diffusion of the programme, with the required awareness campaigns, funding and trainings, so that this trap could be overcome. In addition, the governments should try to increase their funding towards education, having a focus on sustainable development

27

5 Conclusion&

After conducting an analysis of the development status of Rwanda and Nepal, it has been possible to assess the extent to which the first stages of deployment of Rwanda’s National Domestic Biogas Programme and the Biogas Support Programme in Nepal, have contributed to the development of their respective countries. In this way, it is possible to finally respond to the research questions stated at the beginning of the document.

Sub-question 1: Which factors hinder or boost the development of the National Biogas Programme in Rwanda and Nepal?

Firstly, it was possible to observe that both countries have a population that lives mostly in the rural environment, so that the energy needs of the countries are precisely related to the residential sector. This represents an important opportunity for the development of the National Biogas programmes, as the technology is able to act directly on benefit of the population. Furthermore, the predominance of agricultural activities in Nepal and Rwanda, is able to provide the required input for the technology to work properly. Subsequently, as both countries perform similar economic activities and have similar needs regarding energy for their every-day living, they also share similar environmental threats, as is the case of deforestation, which has moved the governments of both countries to implement policies to solve these issues, supporting the biogas programmes as a consequence. Finally, the social and health benefits that the programme can bring to the users of the technology, especially women and children in the households, represent an important driver for the implementation of the programme.

Nevertheless, the development of the programmes faces several barriers that may prevent its proper deployment in the studied countries. Firstly, the lack of awareness that prevails in both countries regarding the biogas technology, which is aggravated by the existing literacy rates. Next, the geography of both territories implies an important challenge that needs to be taken into account, if the programmes are to succeed. Also, it was possible to see that the low incomes that the population perceives in both countries, is one of the most important limiting factors, that may hamper the expansion of the programmes. However, it was possible to see that Rwanda still faces the consequences that the civil war left, as well as the social tension that still exists among the population, being an important menace for the programme.

Sub-question 2: Has the National Biogas Programme in each country accomplished its expectations? Why?

The Rwandan biogas program continues growing. However, the initial estimations to implement 15000 biodigester have not been achieved. To the date, only about 2600 have been constructed. In addition, although companies and skilled labour have been created around the program, a private sector has not yet been developed. One possible factor could have been the scarcity of demand of biodigesters, which is a result of the farmer’s inability to afford the initial cost. This inability could be a consequence of 1) the farmer’s savings were destroyed by the effects of the war; 2) farmers are not able to save money due to low productivity of agriculture; 3) the price of materials are too expensive. On the other hand, Nepal saw an important level of diffusion of the technology already in the first two stages of the programme, which motivated the development of further stages. The difference can be attributed to the more structured political and financial instruments, with which the programme is supported, including more consisted and differentiated subsidies that already take into account the social and physical context of the inhabitants of the country. This governmental support

28

in Nepal, that doesn’t have the same impact in Rwanda due to corruption issues, was able to also overcome the tensions that existed in the country in times of a civil war, as it promoted social inclusion and promised sustainable development.

Sub-question 3: How do the programmes contribute to escaping the poverty trap?

The potential contribution from the programmes towards the development of their respective countries of implementation is very similar, however, the results look very different, just by looking at the first two stages of development.

In Rwanda, as no substantial incentive is being offered to fight the lack of demand from the population, an interest has barely been created to develop entrepreneurial activities or micro-finance institutions around the technology, thus no market is being formed. In Nepal, the subsidies scheme has helped create a demand, so that governmental and private institutions were created in the first two phases to promote the technology and do research around it, opening the path to new stages of the programme, with more ambitious objectives, already providing a path out of the fiscal and lack of innovation traps, contrary to the case in Rwanda. Also, this scheme, although it did not help creating more infrastructure in Nepal, provides a stimulus to break the geographical trap, and as the programme moves forward, and savings start being generated, such an infrastructural problem can start being solved to supply a potential future demand of a market in the mountainous region of Nepal. Such a solution is still missing in Rwanda to face the geographical challenges that include the natural hazards of the country.

Moreover, the successful introduction of the programme in Nepal, has helped reducing the working hours that women and children of the households used to collect firewood and dung, which in turn provides them with more time to spend in other productive activities, such as education, and simultaneously may lead to gender equality. Furthermore, as the extent of the programme is national, it alleviates problems that are related to social and geographical divisions that may evolve into different crisis, such as war. Finally, the installation of biodigesters leads to the reduction of environmental and health problems, that can result in enhanced productivity, especially in agriculture, thus presenting a possible way out of poverty.

The mentioned chain effect of benefits in Nepal, which is due to the external aid provided, cannot be observed in Rwanda. It is precisely the lack of stimuli to create a demand, by trying to overcome the financial and cultural barriers of the country, the main impediment for the Rwandese Biogas Programme to flourish, so that no significant steps have been given to escape the poverty trap.

Main Question: Does the Biogas Programmes (in Rwanda and Nepal) lead to the development of the country?

Therefore, in regard to the main research question, it is possible to say that, even though both national biogas programmes can serve as a mean to escape the poverty trap, the better planning of Nepal’s national programme with respect to its own national context, can place it as a milestone to development. However, the development of the country will depend on how the technologies are managed and on how the savings generated are invested in favour of the country. On the other hand, Rwanda seems to be condemned to be trapped by poverty until it receives the appropriate external help that shows a way to boost its own productivity, leading to investments in strategic areas and finally to development.

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Appendix&

Appendix 1. The role of subsidies in Nepal

Subsidies have played a significant role in the deployment of domestic biogas in Nepal. According to Silwal, since 1982, different organisations have offered subsidies for biogas plants in the country, all of which with the purpose to upscale the dissemination of the technology. The percentage of the subsidies that were provided was changed over the years and its distribution as well. For example, in 1991, the Government of Nepal provided a 30% higher subsidy to the users in the hills than the users in Terai (fertile grasslands of Nepal). And in 1995, an additional subsidy was provided for users in hilly districts that were not connected to the road (42% higher than Terai). (Silwal, 1999)

Over the years, the amounts of subsidies provided to users have varied, but it is clear that it is proportional to the size of the biogas plant and the remoteness of the location where it will be installed. Nevertheless, the size of the biogas plant has a cap, given the fact that the aim is to incentivise the use of small biogas plants. And the remoteness of the location is justified by the fact that investment costs increase abruptly with this parameter.

The Figure below shows the dependence of biogas plant total cost with the remoteness of its location. Even though, differentiated subsidies are given to the users with the aim to promote their use in remote areas, it is still needed to reduce the overall price in order to make them more attractive for users in remote areas.

Total cost of 4m3 biogas plants considering subsidies (BSP-Nepal, 2011)

0

500

1,000

1,500

Terai Hill Remote V/Remote

Subsidies (EU)

Cost to owner (EU)

35

Appendix 2. Institutional setup of BSP-Nepal (BSP-Nepal, 2013)

Appendix 3. Schematic of GGC – 2047 biodigester (BSP-Nepal, 2013)

36

Appendix 4: Rwanda’s biogas potential

The potential for biogas is high, mainly due to following reasons:

• The government banned the use of firewood, in order to combat pollution and ecological problems, such as deforestation.

• Collecting the wood, as stated before, contributes to a high workload. Using biogas this workload would be reduced significantly.

• Since the wood was gathered for free on a large scale, the wood became increasingly scarce due to deforestation and it became increasingly difficult to collect sufficient amounts of wood.

• Using the wood leads to unhealthy situations in house (due to smog). • Using biogas instead of wood, one could easily convert the energy into electricity. • Having a larger scale biogas sector, one could create employment (also in rural areas).

Thus, the potential is the largest for rural areas, since they have access to bio waste and are mainly not connected to the energy grid. Thus, the potential for biogas users is about 110,000 households. (C. van Zuijlen, 2011).

Appendix 5: Rwanda’s energy production system

Rwanda’s energy produc t ion sy s t em

Potential Natural

Resources

Rwanda Energy production system is composed by power, hydrocarbon and renewable. However, Rwanda is not provided of the skilled workforce, infrastructure and knowledge to exploit its resources and the opportunities they could produce (RNRA, 2012). Biomass stands out over the rest of energy resources. It meets about 95% of energy needs in rural areas.

However, there is still an acceleration of deforestation that combined to the corrosion of the current system of distribution and generation create a difficult challenge to obtain a sustainable development (RNRA, 2012).

Figure 9. Energy Demand in Rwanda (RNRA, 2012)

Lack of Knowledge and

Skilled Workforce

Deterioration of Generation & Distribution

Systems

91%!

4%!2%!3%!Energy demand by

sector

Households Transport

Public Services Industry

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Appendix 6: Funding evolution Rwanda’s biogas programme from 2007 to 2011:

Funding d i s t r ibut ion Snapshot (2007)

35% Subsidized by

GIZ & MININFRA

The estimated cost in 2007 for a 6 m3 biogas plant was $859. $300 are subsidized by GIZ and MININFRA, representing a 26% and 9% of the total amount respectively. The rest $559 was planned to be paid by farmers. Furthermore, materials collection and transportation was assumed to be done by farmers, which would supposed a $200 reduction.

Therefore, the total remaining amount ($359 or 41.8 %) would be afforded by farmers. In feasibility study, it was assumed that many farmers could afford this amount and claimed the (micro) financial institute’s involvement.

Moreover, companies participating in the programme will need funds in order to obtain materials, etc. In addition, the study propose the possibility to adhere to Carbon credits.

Information extracted from (SNV, 2007)

23.28% saved in

transportation and collection by

farmers

41.85% assumed by

farmers

Funding d i s t r ibut ion Snapshot (2011)

35% Subsidized by MININFRA

The estimations in the feasibility study were wrong and factors such as the price of the cement contributed to increase the price to reach $1155. In 2011, the panorama also changed by the finalization of the collaboration contract between GIZ and the MININFRA, leaving MININFRA to assume 100% of the subsidy.

Nevertheless, due to the fact that farmers were unable to afford the rest of the investment ($855), the BPR signed a “6.5 year, 4 million agreement to provide a 3-year micro financing scheme” (Landi, Sovacool, & B.K. Eidsness, 2013) with the AEF1 and the FMO 2 to provide funding to the households that meet the conditions.

Information extracted from (SNV, 2007)

65% assumed by

farmers

1 Dutch government’s Access to Energy Fund. 2 The Netherlands Development Finance Company.

65%!

9%!

26%!

%*share*of*the*cost**

Farmers! MININFRA! GIZ!

65%!

35%!

%*share*of*the*cost**

Farmers! MININFRA!

38

Agricu l ture share :

90% population

participate in agriculture

The economy of Rwanda is principally based on agriculture. It is estimated that around 90% of the population is involved in agriculture practices in some way, which also represents about 37% of Rwanda’s GDP (Landi, Sovacool, & B.K. Eidsness, 2013). Moreover, exportations of crops or products related to agriculture - mainly coffee and tea - represent around 85% of the total exportations.

This exportations are characterized by a low price, that in combination with unsustainable agricultural practices make Rwanda be dependent of food imports and international aids to feed the population while Rwanda has optimal conditions for production (Landi, Sovacool, & B.K. Eidsness, 2013).

Dependency on International aids & food

imports while

having ideal conditions for

farming

35% of GDP

85% of total

exportation