The Rwanda Green Fund (FONERWA) is working with the Rwanda Development Bank (BRD) to set up a facility to spur the country’s ability to meet the growing opportunities for climate finance in the private sector.
The facility dubbed Rwanda Green Investment Facility (RGIF) is being modelled on the "green bank” idea.
Jeanne d’Arc Mujawamariya, the Minister for Environment, disclosed the development at a sideline event of the ongoing 26th UN climate conference in Scotland where she shares Rwanda’s experience in catalysing climate finance.
"The facility will use a blended finance approach to leverage private investment and we are seeking to capitalise this facility with $100 million dollars,” Mujamawariya told participants during a dialogue on leadership on green climate funding.
The blended finance approach includes debt, credit enhancements such as sub-debt, tenor extension and collateral support to commercially viable projects in the green sector.
The move, Mujawamariya said, is part of green growth and climate-resilient strategy.
Rwanda being a climate-vulnerable country, she said, adaptation is a priority adding, however, that all countries must play their part.
"That is why Rwanda has set the target of reducing emissions by 38 per cent by 2030 and becoming a carbon-neutral economy by 2050. To put these plans into practice, the government established the Rwanda Green Fund, which catalyses investments for climate action,” she said.
The fund has so far raised 217 million dollars, including some from the Green Climate Fund (GCF) and has big plans for the future.
"As we seek finance for our goals, we are working with various partners, including the Green Climate Fund, to create new investment mechanisms that leverage public finance to attract private investment. One exciting example is the Rwanda Green Investment Facility,” she noted.
To be considered next year
The facility will be considered by the Green Climate Fund (GCF) board in February 2022, she added.
"In line with these efforts, the Development Bank of Rwanda is currently pursuing GCF accreditation, which will give the country access to private financial instruments. We look forward to our continued collaboration for increased direct access to finance,” Mujawamariya said, adding that Rwanda seeks to become one of the world’s best destinations for green investment.
The GCF has supported Rwanda through multiple readiness programmes, including project preparation facilities.
"We are also now implementing a ground-breaking project known as Green Gicumbi, which is worth 32 million dollars and the results to date are impressive,” she said.
She said that to achieve Rwanda’s ambitious climate plan, Rwanda continues to value GCF funding as a reliable partner in this journey - through expedited technical support in proposal designs, disbursements and accompanying monitoring and evaluation.
"Rwanda has exciting plans to diversify our climate finance tools and facilitate greater private investment in climate action,” she said.