RWANDA, CONGO SOLICIT FUNDING FOR JOINT ENERGY

UNCLAS SECTION 01 OF 02 KIGALI 000536

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL EFIN EAID ENRG RW CG
SUBJECT: RWANDA, CONGO SOLICIT FUNDING FOR JOINT ENERGY
PROJECT

REF: A. KINSHASA 796

B. KINSHASA 741

C. KIGALI 513

KIGALI 00000536 001.2 OF 002



1. (U) SUMMARY: The energy ministers from Rwanda and the
Democratic Republic of the Congo (DRC) met in Rwanda on
August 17 to review and solicit donor support for a potential
joint Rwandan-Congolese energy project. This project is a
tangible outcome of the groundbreaking August 6 Kagame-Kabila
meeting. Though mostly in the idea stage, with crucial
details yet to be settled, the project is an important
confidence-building measure that supports the growing
rapprochement between Rwanda and the DRC. END SUMMARY.


2. (U) Under the auspices of the Economic Community of Great
Lakes Countries (CEPGL),energy ministers Albert Butare of
Rwanda and Laurent Muzangisa of the DRC met on August 17 in
Gisenyi, Rwanda to present the rough outlines of and elicit
donor support for a joint Congolese-Rwandan project to
exploit methane gas in Lake Kivu, which the two countries
share. The Burundian energy minister and the CEPGL acting
executive secretary also participated in the session;
polcouns and several other Kigali-based diplomats,
international financial institution representatives,
technical experts and public utility officials from all three
countries attended as observers. Rwandan print, radio and
television media covered the event.


3. (U) During opening comments, Butare and Muzangisa
emphasized that they had convened this meeting at the
direction of their heads of state, who met on August 6 (Refs
A and B). Next, participants reviewed the status of existing
and planned jointly-run hydroelectric facilities on the
Rusizi River (Rusizi II, III and IV),listened to a
presentation on regional power transmission and responded to
questions. Of note, both Butare and Muzangisa declared that
if any of the three countries' national utilities failed to
pay for the electricity it received, then SINELAC, the joint
utility that managed the Rusizi power plants, would "cut them
off." Butare specified that the three governments had agreed
that national utilities would receive formal notification of
this by the end of August, and if any was in non-payment
status by September 10, "they will get cut off."


4. (U) Participants next reviewed ideas and recommendations
on joint Congolese-Rwandan management of Lake Kivu's methane
in general, as presented by consultant Philip Morkel of
Methane Hydrates Limited, a South Africa-based firm. Butare
said the final document produced by Morkel and the "group of
experts" was authoritative and the Rwandan government viewed
its guidelines as "the bible." Morkel and Muzangisa
acknowledged, however, that the study had yet to be
translated into French so the Congolese government could
examine it easily. The grand finale was an overview of the
estimated 200MW joint Congolese-Rwandan Lake Kivu project, to
be implemented in increments of 50MW, which would cost
$400-$450 million and rely on what they called proven
technology. The two countries planned to hire within the
next several weeks a consultant to conduct a feasibility
study, and aimed to launch a formal request for proposals o/a
July 2010.


5. (U) Responding to a question from the Burundian minister,
Butare and Muzangisa assured that Burundi would be included
in the Lake Kivu project, albeit as an eventual consumer
rather than a direct participant. Answering the CEPGL acting
Qrather than a direct participant. Answering the CEPGL acting
Executive Secretary's question about CEPGL involvement,
Butare clarified that the CEPGL's role would remain confined
to "follow-up" and "situational awareness;" however, there
was no need to create an new CEPGL "Department of Gas" to
oversee or regulate the project. Turning to the question of
who would pay for the Lake Kivu feasibility study and the
formation of a bilateral regulatory authority, Butare said
Rwanda and the DRC hoped to attract support from donors as
well as the private sector. Muzangisa commented that the DRC
was not concerned about Rwanda's own recently-launched,
private-sector initiative to exploit Lake Kivu's methane gas
(Ref C). As for the question of financing, he said, "this is
why we invited donors" to attend the day's session.


6. (SBU) COMMENT: Much flesh needs to be put on the bones of
this prospective joint Congolese-Rwandan venture, and it may
not be easy to attract public or private-sector funding.
However, World Bank President Zoellick, who recently visited

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the pilot methane gas generation site now opening in Lake
Kivu, spoke highly of the potential impact of a joint
project. DRC energy minister Muzangisa made a final, salient
point: this project would help address the growing energy
"deficit" facing each of the three CEPGL countries. And, in
the short run, this energy-sharing initiative is most useful
as a confidence-building measure. It underscores the growing
rapprochement between Rwanda and the DRC. Rwandan officials
have echoed these sentiments. END COMMENT.
SYMINGTON