Highlighting the country’s initiatives, challenges, and innovative solutions for building green cities Michelle DeFreese explores the path to sustainable transportation in Rwanda.
The transport sector plays a crucial role in building and shaping green cities. It serves as a vital component in efficient mobility systems that are essential for various purposes, such as commuting to work, facilitating last-mile connectivity, and connecting goods to the market. The significance of transport lies in its ability either to positively or negatively impact the lives of residents in any city.
Cities equipped with well-designed transport infrastructure can offer their residents to travel seamlessly. These cities prioritise and promote means of sustainable mobility including walking, cycling, e-mobility, and public transport. In contrast, in cities that lack diverse transportation options, you can see the result in terms of congestion, air pollution, unequal access to opportunities, and a lack of affordable transport options.
Addressing Air Pollution and Attracting Private Investment
In Rwanda the transport sector finds itself at the centre of a critical challenge: It is the number one contributor to air pollution in urban centres. Motorcycle taxis dominate the space, providing a convenient and low-cost means of transport. However, improved public transport systems could more effectively and efficiently fulfil the needs of residents by providing a low-cost, low-carbon mode of travel able to transport high volumes of people.
Recognising the urgent need for change, the Government of Rwanda has implemented a comprehensive package of incentives aimed at attracting private investment to spur the country’s transition to e-mobility. As a result, several companies have established operations in Rwanda, fostering the growth and replication of various e-mobility business models that are attractive to start-ups and end-users alike.
Measures to Support Low-Carbon Cities in Rwanda
However, there have been challenges. The implementation of incentives such as the industrial electricity tariff for charging and the issue of importation of electric vehicle parts, especially batteries have faced hurdles.
For these reasons, GGGI has been supporting a Government of Rwanda initiative to introduce electric buses in the City of Kigali. The electric buses aim to fulfil increasing demand on the current public transport system but also to take full advantage of the Rwandan grid, which is supplied predominantly by hydropower.
In addition to the public transport initiatives, GGGI is also implementing a project on Strengthening, Prioritizing, and Investing in Non-Motorized Transport Infrastructure. This project aims to increase commitments and domestic funding towards active transport. The emphasis on walking and cycling is driven by the benefits to health, well-being, air quality, and affordability. When cities invest in NMT infrastructure – walkways and protected, continuous bicycle lanes – they invest in the social, environmental, and economic characteristics that build the foundation for green cities.
Driving Energy Independence: Transitioning to Electric Vehicles for Sustainable Transport
The perception of low-carbon cities is often one of expensive interventions with limited local impact. However, the more that cities can disinvest from carbon-intensive means of transport, the more energy independent from fluctuations in price and changes in availability that are driven by external factors, they become. Transitioning to electric vehicle types for motorcycles could result in an estimated savings of 22M USD in fuel imports per year. Especially, considering Rwanda is a landlocked country with no fossil fuel deposits, having a transport sector focused on walking, cycling, and electric mobility equates to more efficiency, independence, and affordability for end users.
Thus, investing in low-carbon cities and transport not only reduces emissions but also facilitates lower levels of air pollution, a decreased reliance on fossil fuels, and serves as a buffer against supply instability of imported fuels (in the case of Rwanda), increasing the country’s independence.
Challenges and Solutions: Implementing Low-Carbon Measures in Rwanda’s Transport Sector
Implementing low-carbon measures in Rwanda’s transport sector has faced challenges, primarily related to the costs of charging infrastructure, electric vehicles, and batteries. These challenges become more prominent when implementing and e-mobility projects involving new technologies and larger vehicles such as buses. To address this, GGGI initiated a project to mobilize climate finance in the form of Internationally Transferred Mitigation Outcomes (ITMOs) between the Government of South Korea and the Government of Rwanda. The project aims to establish an agreement between the two nations to facilitate the acquisition of electric buses in exchange for ITMOs due to the lower emissions resulting from the e-mobility transition.
To overcome the financial viability gap various models are being introduced. , an electric bus company operating in Kenya. BasiGo plans to launch in Kigali in September 2023 by using a “pay-as-you-drive” model to offset the higher capital expenditure (CAPEX) required for electric buses by distributing the repayments over time. Similarly, MOVE a ride-hailing service by Volkswagen has reduced the financial affordability gap of electric cars but recuperates the investment over time through smaller payments supplied by a large customer base. For trucks, OX Delivers employs a similar pay-as-you-go financial model, reducing the financial risk of introducing electric trucks through the payments from their main clients, small-scale agricultural producers and traders. These examples demonstrate overcoming the challenge of higher CAPEX while reaping the benefits of lower operating expenses (OPEX) of different electric vehicle types.
Overcoming Obstacles: Rwanda’s E-Mobility Incentives
Despite these obstacles, the incentives implemented in Rwanda have successfully carved out fiscal and non-fiscal considerations that greatly benefit e-mobility companies. This has resulted in a graduate shift, mostly in motorcycles in the City of Kigali, with the market also witnessing the entry of electric cars, trucks, and tractors. These developments reflect Rwanda’s commitment to building green cities and reducing emissions through the promotion of sustainable transportation alternatives.
While access to finance continues to be a challenge, the combination of government incentives, opportunities such as climate finance, and innovative business models are being employed to overcome the financial viability gap. This concerted effort has led to an accelerating transition to e-mobility across different vehicle types, and the trend is expected to continue as new technologies become more affordable and accessible. This comprehensive approach not only addresses the financial challenges but also ensures a sustainable and efficient transition to low-carbon transportation in Rwanda.