Implementing green development goals can be expensive. But the positive effects are priceless. Rwanda’s ambitious green development strategy, designed to reduce emissions and build climate resilience, will help the country counter the effects of climate change, build a stronger foundation for sustainable growth, and reach its commitments under the Paris Climate Agreement. The price tag? About $11 billion according to estimates from Rwanda’s government—a hefty sum that is equal to Rwanda spending 8.8 percent of its GDP annually through 2030. Clearly, the private sector and private investment have important roles to play in helping Rwanda build—and fund—climate resilience. A World Bank Group report released this week explores how Rwanda can best engage the private sector in its economy, including in sustainable agriculture and infrastructure projects, and greener energy and urban development. The Rwanda Country Climate and Development Report (CCDR) outlines how Rwanda can attract private funds into its green economy by implementing policy reforms and developing a green finance market. For potential investors, there are opportunities in Rwanda’s agriculture sector to expand access to irrigation and affordable post-harvest storage facilities, to develop climate resilient livestock and seed, and for targeted insurance products. The country’s transport sector needs investment in e-buses, while green energy projects such as solar, mini-grids, and clean cookstoves, also present opportunities. Finally, there is a market to expand production of locally made, sustainable construction materials. To attract investment into these and other sectors, the CCDR recommends that the government provide greater clarity on carbon regulations and taxation of certain sectors such as renewable energy. It also recommends that the government introduces emission standards for vehicles, supports the development of charging infrastructure for e-mobility, and develops green building codes. Rwanda will also need to develop a green finance market as part of its broader capital market development effort to help mobilize financing. The report also notes that local commercial banks will need support assessing risks associated with climate lending and lays out the benefits of improved access to blended finance—that is, the use of concessional donor funds to mitigate specific risks and mobilize additional capital. Ramping up green investment in Rwanda is urgent: the country is particularly vulnerable to climate change, which could have potentially devastating effects on its rainfed agriculture sector, its tourism sector, and its infrastructure such as roads and buildings. By strengthening resilience to climate change, Rwanda can better manage the adverse impacts of climate change. This can happen by promoting a shared partnership between the government and private sector. IFC has been working with partners in Rwanda to strengthen capital markets to increase access to funding for the private sector and support to grain farmers to boost food security. IFC, and the broader World Bank Group, is ready to continue supporting Rwanda to attract investment to support its green development. Rwanda isn’t alone in facing climate change, of course, and this CCDR, a new World Bank Group publication to help countries reduce greenhouse gas emissions, is only the first to be produced for a country in Eastern Africa.
