Prime Energy, a local hydropower company, has announced the issuance of the first-ever Green Bond in Rwanda worth Rwf9.5 billion, following approval from the Capital Market Authority (CMA).

The 7-year tenor bond offer will be open to the public on March 18 and close on April 5, after which it will be listed and traded on the Rwanda Stock Exchange on April 26, according to an official statement.

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A green bond is a debt instrument used to mobilise resources and whose proceeds are exclusively used to finance projects that have a positive environmental impact, such as renewable energy and green buildings.

For this specific bond supported by the International Finance Corporation (IFC), the proceeds are expected to be invested in a new renewable energy project and finance the maintenance of existing hydropower plants across the country.

Sandy Rusera, the CEO of Prime Energy said this move allows the company with alternative options of financing through capital markets and accelerates their footprints in providing clean power in Rwanda.

"We’re excited to use this type of instrument to increase our hydropower capacity and explore new opportunities to bring sustainable energy to more communities.”

Prime Energy operates four hydropower plants located in the Western, Southern and Northern Provinces of Rwanda with 25-year concession agreements with the Government and Power Purchase Agreements (PPAs) with Energy Utility Corporation Limited (EUCL).

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Eric Bundugu, Executive Director of CMA noted that the green bond marks another milestone on the diversification of asset classes while deepening further the Rwandan capital market.

"This landmark achievement reflects a significant step forward in ensuring our domestic capital market continues to support Rwanda’s commitment towards sustainable finance development.”

Rwanda continues to galvanize efforts in dealing with climate change impacts through mitigation and adaptation challenges, but most importantly calling for the private sector contributions.

The green bond is yet another impetus in sustainable finance, in addition to the Rwf30 billion Sustainability Linked Bond that was issued by the Development Bank of Rwanda (BRD) in 2023, as well as the Ireme Invest facility aimed at providing green finance to the private sector.

The Green Bond is expected to not only provide an opportunity for investors to align with Environmental, Sustainability, and Governance (ESG) principles, but also inspire other companies in the market to tap into alternative and innovative financing.