Citizens and small businesses from different parts of the country working with community Savings and Credit Cooperatives (SACCOs) will soon be able to access affordable finance to purchase solar energy equipment.
This follows agreements entered between Rwanda Development Bank (BRD) and different SACCOs clinched at the bank’s headquarters in Kigali yesterday.
During the event, the bank signed a subsidiary financing agreement with eight heads of SACCOs, which will see their clients access affordable finance to acquire off-grid energy equipment.
According to Eric Rutabana, the chief executive officer of BRD, the agreement is part of the Rwanda Renewable Energy Fund, worth $48.94 million, aimed at supporting extension of off-grid energy solutions to different parts of the country.
“This is a government and World Bank project rolled out through Rwanda Development Bank. The project is facilitating financial institutions to avail affordable finance to their clients to enable them get access to energy,” he said.
Rutabana told the media yesterday that the agreement entered between the bank and the SACCOs will see the eight SACCOs get up to $25,000 funding (Rwf21.2 million) during the first phase, and that those that will better utilise the financing stand a chance to get another.
“We are giving them $25,000, which, if put to good use, can easily attract another round of finance from the Fund. We will be signing another agreement with 22 other SACCOs in the coming days,” he said.
The loan given to the SACCOs will carry an interest of 5 per cent, but bank officials did not specify within which period it is expected to be paid back. They also highlighted that SACCOs would set their own interest when lending to their clients.
Those that inked deals with BRD include Girubukire SACCO Buyoga, Imbarutso SACCO Musenyi, Rebakure SACCO Rusarabuye, Terimbere SACCO Bwira, Rebakure SACCO Coko, COOPEC Ubumwe Nyakariro, Isunge SACCO Ngarama, and Uruyange SACCO Rukoma.
All are from the districts of Rulindo, Bugesera, Burera, Ngororero, Gakenke, Rwamagana, Gatsibo and Kamonyi.
Isidore Karasi, the president of Girubukire SACCO Buyoga in Rulindo District, told The New Times that they are hopeful that the money will help some of their clients, especially those living in areas with no electricity.
“We are happy to partner with BRD to acquire affordable finance, and we think it will help the people who we work with in our sector, mostly those who don’t have access to energy,” he said, adding that it is a small amount of money which could be spent in a short time.
In general, the Renewable Energy Fund targets to benefit up to 445,000 households (1.8 million people) in the next seven years, helping the Government to achieve its targets of providing access to the entire population by 2024.
The agreements with SACCOs come few days after BRD signed another agreement with commercial banks, including Bank of Kigali, KCB Bank Rwanda, Access Bank and I&M Bank.
The multimillion dollar funding agreement seeks to enable SACCOs, commercial and micro-finance institutions finance off-grid energy, which, according to the current national strategy, is meant to account for about 48 per cent of national energy provision.
Rutabana said the project ultimately targets rural areas that have very low energy access rates.
Some districts like Nyaruguru, Nyamagabe, Gakenke, Gisagara, and Gicumbi have less than 10 per cent energy access. Officials said they would benefit from the initiative.
At the moment, about 42 per cent of Rwanda’s population has access to power, both on-grid and off-grid solutions.