Hydro Power Plant in RWANDA: A financial analysis using FINPLAN

This study evaluates the financial viability of the Rukarara 10 MW Hydropower Plant in Rwanda using FINPLAN. Three scenarios were analysed to assess the impact of electricity pricing, production volume, and loan repayment terms on shareholder dividends and overall project profitability.

In Scenario 1, varying electricity prices revealed that the base price of RWF 120/KWh yielded the highest dividends and the shortest payback period for investors. In Scenario 2, increasing electricity production (by 25%, 50%, and 75%) directly improved dividends without delays in shareholder returns, with the 75% increase being the most financially beneficial. Scenario 3 showed that shorter loan repayment periods (e.g., 5 years) generated higher short-term profitability, while longer periods reduced overall returns.

The analysis concludes that the financial sustainability of the hydropower plant can be improved through strategic electricity pricing, enhanced productivity, and preference for shorter loan repayment periods. These findings provide key insights for project developers, investors, and policymakers involved in Rwanda’s renewable energy sector.