Enhancing livelihood opportunities in Rwandan refugee camps

Thousands of refugees in the Rwandan camps of Kigeme, Nyabiheke and Gihembe are having their livelihoods and energy access improved through the Renewable Energy for Refugees (RE4R) project. Jointly delivered by Energy 4 Impact, Practical Action, UNHCR - the UN Refugee Agency, and funded by the IKEA Foundation, RE4R supports the provision of solar-powered electricity for households, small enterprises, institutions and community facilities as well as job creation and income generation for both the displaced populations and their host communities.

The RE4R project has been running for over three years and has provided many valuable insights, particularly in demonstrating how new strategies can provide sustainable energy solutions among forcibly displaced populations.

The provision of energy in humanitarian settings, for services such as lighting homes, powering businesses, schools and health centres, is typically inefficient, unsafe and inadequate. Provision is generally limited to short-term solutions to immediate problems, largely because camps and settlements are deemed places of temporary shelter, even though many refugees end up living in them for decades. Delivering essential assistance in such a context tends to overstretch the budgets of humanitarian agencies, so gaining access to energy beyond subsistence level is often out of reach for many refugees. This short-term ad-hoc approach to energy access is detrimental to some of the poorest communities in the world: it perpetuates their reliance on aid, it hampers their attempts to achieve economic independence and undermines their ability to take control of their own lives.

The RE4R project seeks to reshape the humanitarian response by demonstrating the cost-effectiveness of market-based approaches to delivering sustainable, efficient and affordable renewable energy services to people in such settings.

Before the project started in the Rwandan refugee camps of Kigeme, Nyabiheke and Gihembe, two-thirds of homes either had no lighting at night or used only basic light sources such as candles, burning sticks and torches. Three-quarters of businesses used small-scale solar technologies to offer basic services such as phone charging, or for lighting to extend their business hours. Whilst offices and other central institutions are connected to the camp mini-grids or the national grid, buildings located further away had only basic or no access to electricity. Only 15% of enterprises had connections to the grid or mini-grids supplying power to the camp’s operations, thereby only a small minority enjoyed significantly higher levels of electricity access for their commercial activities. Moreover, the camp mini-grid networks were powered by or diesel generators, where the national grid is not available, resulting in high levels of greenhouse gas pollution.

Designed in collaboration with government, NGO and private sector partners, RE4R targets the most pressing challenges by seeking to increase overall access to renewable energy and to promote its usage amongst households and small businesses; to improve lighting in public spaces; and to reduce reliance on non-renewable energy sources.

Energy 4 Impact has applied its expertise to enhance the livelihood opportunities of people in and outside the camps by identifying the energy needs of businesses and the constraints to their growth and by assessing the existing and potential energy markets and their enabling environment.

Understanding businesses' needs

The inadequate power supply curtails business opportunities within the camps, but it is not the only barrier to their growth. Limited financing options to upgrade their equipment and the lack of technical and business knowhow means that enterprises such as tailors, phone-charging points, hairdressers, shops, restaurants, bars and farms typically remain small-scale operations.

In order to expand, generate more income and increase employment opportunities, the entrepreneurs do not only require a more powerful and stable electricity supply. They also need to be able to invest in modern, electric appliances such as sewing machines, power tools, computers and refrigerators, which tend to remain beyond their means. In addition, they need good business and financial management skills to navigate their enterprises through the challenges of their early development.

Approach to expanding productive use of energy in the camps and host communities

Energy 4 Impact seeks to establish a functional market system in which the entrepreneurs have access to skills, markets, capital, suppliers of commercial tools and equipment and can connect to sources of adequate power in order to run their businesses successfully. Through the RE4R, it seeks to build a sustaining ecosystem in which refugee businesses, suppliers, financial institutions, camps and government agencies, collaborate to improve service offering and build prospering communities.

Mahoro Uwizeye has lived in Gihembe Refugee Camp in the Northern Province of Rwanda for 20 years. Mahoro and her husband Claude run a milling business in the host community outside the camp. Their enterprise has often struggled: the rent for the premises was high, their old milling machine kept breaking down and they did not have the finance nor the technical know-how to upgrade to a new system.

Once ensconced in the camps, RE4R began to help entrepreneurs become aware of opportunities to expand and diversify their business. “We set up information kiosks showcasing how various technologies and business models can be adopted to generate income. We then work with selected businesses to build sustainable forms of livelihoods, by unlocking new market opportunities strengthening their business skills and meeting their energy and financial requirements,” says Robert Mutalindwa, Energy 4 Impact’s Business Development Coordinator.

From the assessed enterprises across the three camps and respective host communities, 150 have been selected for business training and support to access energy, finance and appliances. Continuous mentoring ensures they make the best use of energy and equipment to enhance their commercial activities. For example, Energy 4 Impact helped Mahoro and Claude enhance their business management skills, pricing, marketing, customer service and record keeping. 

The majority of the supported businesses require a power supply of more than 200 watts which can be satisfied through a mix of solar home systems and nano-grids. To keep the power generation cost of the nano grids down to affordable levels, Energy 4 Impact is clustering businesses together.

Grouped together in various locations across the camps, 38 enterprises are being supported to access power from the most appropriate or readily available sources, whether nano-grids, mini-grids, national grid or solar home systems. Energy 4 Impact then helped entrepreneurs identify local providers of appliances and facilitated their procurement process. “Once we had identified the type of appliances required by each enterprise, we linked them up to the most cost-effective suppliers and negotiated favourable warranties and after-sale care with them”, explains Robert Mutalindwa.

"In some cases, we helped groups to acquire one piece of machinery that they may not have bought individually as they would only occasionally use it; for example, one embroidery machine will serve several dress makers," he says.

Financing equipment is often a major problem. Businesses typically struggle to raise funds to purchase the appliances – and some also need working capital for buying stock or for transport – but suppliers are often reluctant to do business with refugees due to their low purchasing power and high mobility out of the camps. RE4R addresses this issue by subsidising 70% of the cost of appliance, leaving the entrepreneur to raise the remaining funds. Energy 4 Impact then helped link the entrepreneurs with financial institutions for loans. "We have managed to link up 19 entrepreneurs with a couple of financial providers that are prepared to extend their financial services to refugees, despite them being considered high-risk customers for their lack of credit history and collateral," explains Robert Mutalindwa.

So far, 48 refugees have acquired 86 appliances for businesses which include hairdressers, beauticians, butchers, cyber cafés, phone repairs, milk cooling, popcorn-making, poultry and egg incubation and refrigeration.

Entrepreneurs were also provided with mentoring and business development support throughout this process. For example, after Mahoro and Claude were given 70% grant financing to procure a new electric milling machine, Energy 4 Impact followed up the purchase with support on the operation and maintenance of the appliance. It also advised them to shift their business to a cheaper location inside the camp in an area connected to the grid. Not only did the move save commuting time, it placed their business closer to the customers since the majority are refugees within the camp.

The robust take-up of energy access is demonstrated by the fact that 38 of the recruited businesses are now connected to the national grid with the rest due to receive electricity through 18 nano-grids and 22 large SHS to fit their capacity.

Participating in the RE4R programme has enabled many businesses to flourish. Since they have been able to produce good quality maize flour at a reduced outlay of time and money, Mahoro and Claude saw their income grow from $68 to $218 per month. Energy 4 Impact also linked the couple to reputable suppliers of maize, sorghum, wheat and soya to ensure there is consistency in supply. They are now planning to start up both their own retail shop as well as a wholesale store for distributing the packaged flour to other small retail shops within the camp. Not only has Energy 4 Impact helped them assess the feasibility of expanding into the packing and distribution of maize flour, they have also introduced another revenue stream by producing Isombe sauce (made with grounded cassava leaves).

Mahoro Uwizeye’s business now employ two other people and her family of six are able to meet their basic needs such as clothing, education, health and food without relying on UNCHR monthly allowances.

Despite the turbulence created by the ongoing COVID19 pandemic, which is impacting the economy inside and outside the camps, many of the supported enterprises have been steadily earning some income, their business model remains sustainable and retains the potential of creating jobs for other refugees in future. Both the camp managers and the government remain supportive of the RE4R approach, as it leads to the better integration of refugees in the host communities.