The project, which will be operated by Hakan Mining and Generation Industry and Trade Inc., is expected to produce 100 megawatts (MW) annually once it is running at full capacity.

"The implementation of the peat-to-power plant will result in about a 90 percent increase of the current total power generation in the country," Emma Isumbingabo, Rwanda's minister of state for energy and water, said.

The plant is expected to reach full capacity around 3-5 years after it goes online. Construction is due to begin in 12-15 months.

The landlocked country estimates it has reserves of 155 million tons of dry peat, some three quarters of which is found near the Akanyaru and Nyabarongo rivers and the Rwabusoro plains.

That would be enough, the authorities say, to generate 450 megawatts of energy for 25 years.