Investors want lower interest rates under new fund for green projects

Greenpreneurs in Rwanda have welcomed a new fund dubbed “Rwanda Green Investment Facility” – that is set to finance businesses’ green projects – to lower interest rates. The fund to be run by the Rwanda Green Fund (FONERWA) and the Development Bank of Rwanda (BRD) was launched on Monday, November 7, at the 27th climate change conference (COP27) taking place in Egypt. The facility will operate under the “Green Bank” model and is seeking $100 million to start operations. “We are expecting the funding at low interests to support greenpreneurs so that they can be able to scale up their businesses,” said Faida Zoubeda Uwase, a female greenpreneur who invested in restoring degraded forests. Uwase founded Inkingi Eco Ltd, a company that distributes seedlings to communities to restore degraded forests. The firm also incentivizes communities to shift to improved cook stoves that use smokeless pellets. According to Uwase, the stoves save forests from illegal logging. So far, she has restored 286 hectares, with an additional 50 hectares of native and fruit trees in the pipeline. “The environment should be main-streamed in all sectors but it is taken as a risky business in commercial banks yet climate finance is needed so that it is accessible to SMEs and startups with green businesses. The greenpreneurs need money at very low interest which can also be paid back in a long-term period,” she said. In Rwanda, some financial institutions charge 24 percent interest rates on loans. Uwase seeks $120,000 to scale up her business. Amon Ndarifite, The recycling department manager at Electromax Industry in Huye District reiterated that the support for green projects should be in various ways. “The support was needed because green projects are in need of a bailout. The new fund should support investors in various ways such that it triggers an increase in green projects or investors with green projects,” he said. Teddy Mugabo, the CEO of Rwanda Green Fund, earlier said that the new fund’s first objective is to leverage private investments and the second objective is to provide tailored financial products to attract the private sector. She said that this will also provide grants to support early-stage businesses. “It will help to build projects which when they are ready to scale can then move to a credit facility that will be managed by the Development Bank of Rwanda (BRD) which can provide debt financing. We are looking to provide concessional and affordable financing,” she added.

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Investors want lower interest rates under new fund for green projects