Rwanda’s efforts to promote use of environmentally-friendly appliances and systems have received a major boost from a new fund which seeks to ease access to such products.
A new guarantee facility, dubbed ‘Coolease’, has been rolled out and will help businesses, institutions, and members of the public alike to access eco-friendly systems, which are generally expensive.
The financial scheme is managed under the Business Development Fund (BDF), which says it has hitherto mobilised some US$4 million in initial funding.
The development is seen as a major boost to the Rwanda Cooling Initiative, an effort by the Government to scale up adoption of energy saving and climate-friendly air conditioners and refrigerators.
The fund was launched Tuesday with officials expressing optimism it will help accelerate transition to an environmentally-friendly culture particularly by facilitating suppliers and consumers of air conditioning and refrigeration products without making full up-front payment.
The same product will serve as collateral.
Rwanda Cooling Initiative is in line with the Kigali Amendment to the Montreal Protocol that requires all signatory nations to phase down cooling systems that release greenhouse gases.
Under the new facility a person or institution will be able to secure a loan from a commercial bank to buy eco-friendly air conditioners or refrigerators with BDF’s fund serving as guarantor.
To mitigate risks and boost confidence of commercial banks, BDF and Rwanda Green Fund (Fonerwa) have agreed to set up a leasing subsidiary which will serve as a special purpose vehicle to finance acquisition of such cooling systems. The beneficiary will be required to make monthly deposits with their respective bank.
Officials said they are yet to set the interest rate but added it will be lower than the current market rate. The scheme is expected to be up and running before the year ends.
Speaking at the launch in Kigali, the Minister for Environment, Dr Vincent Biruta, said the new scheme will help scale up the adoption of environmentally friendly cooling systems, since affordability has been the main challenge.
“We believe that people will now find it easier to access new environment-friendly cooling system since the major problem has been the cost,” he said.
Innocent Bulindi, chief executive of Business Development Fund, said the new scheme will not only benefit the public but also big institutions.
“Under Rwanda Cooling Initiative, hotels and other big businesses are required to switch to new cooling systems, which is energy saving and climate-friendly,” he said.
Bulindi said the new financial scheme will become operational in the last quarter of the year adding that they are still mobilising more resources.
Coletha Ruhamya, director-general, Rwanda Environmental Management Authority (REMA), welcomed the initiative saying it will help rid the country of appliances and systems that produce greenhouse gasses.
UN Environment and Basel Agency for Sustainable Energy are also backing the new scheme.