President Paul Kagame has launched Rwanda’s green investment facility worth $104 million (approx. Rwf109 billion) in its first capitalization to drive private sector ventures in climate-resilient projects.
The facility dubbed "Ireme Invest” was launched on the margin of the ongoing 27th UN climate conference (COP27) taking place from November 8 to 18 in Egypt.
At Rwanda's pavilion at the conference, the country is showcasing its green investment opportunities, and bilateral meetings and partner visits are taking place to, among other things, accelerate the mobilization of capital for sustainable projects.
Kagame noted that whether negotiations at COP27 are big or small, there are still many tools available to get things done on the ground.
"Ireme Invest embodies Rwanda’s commitment to achieving tangible results toward a green economy through public-private partnerships in key areas,” he said.
Climate adaptation requires big changes in how we produce and consume energy, he cited, "How we move around, all that depends on climate adaptation and change. What we eat, and how it’s grown. All that comes together.”
"In short, the entire economy is affected, which means the private sector has a tremendous role to play.”
The raised capital exceeds the $100 million initially expected for this facility to start operations.
Rwanda being a climate-vulnerable country has gathered adaptability efforts for preventive and responsive mechanisms to climate issues.
Recently, Teddy Mugabo, CEO of Rwanda Green Fund said this facility will allow de-risk green projects to get the necessary financing.
"Green ventures are always seen as high risk. Commercial banks do not want to go that route because when we talk about green projects, there is a lot of innovation, there is a need to rethink technologies, and the moment you start thinking about these, perceptions of risk increase. So that is the role of the facility to de-risk.”
The facility is expected to spur the country’s ability to meet the growing opportunities for climate finance in the private sector and is put in place by the Rwanda Green Fund (FONERWA) in collaboration with the Rwanda Development Bank (BRD).
It will use a blended finance approach such as debt, credit enhancements such as sub-debt, tenor extension, and collateral support to commercially viable projects in the green sector.
Key partners for the first capitalization include France, Sweden, the United Kingdom, the European Investment Bank, and Green Climate Partnership Fund.