The newly launched Rwandan government green investment facility will boost green financing by unlocking new spending for the country’s response to climate change, according to private investors.
Dubbed Ireme Invest, the investment facility with 104 million U.S. dollars in initial capitalization was launched earlier this week by President Paul Kagame on the sidelines of the ongoing United Nations climate change conference (COP27) in Sharm El-Sheikh, Egypt.
The government’s initiative was launched through the Rwanda Green Fund and the Development Bank of Rwanda with support from a range of other development partners.
“As players in the e-mobility sector, it is a capital-intensive business. It requires investment and we hope the Ireme Invest facility offers us an opportunity for scalability,” Donald Kabanda, the Chief Executive of Rwanda Electric Motors Ltd, told Xinhua.
“We are enthusiastic to get more funding to contribute toward the targets of cutting carbon emission through e-transport. The company is ready to scale up, we have trained human resource and it is well positioned based on our business model to tap into the new investment facility once it becomes operational,” he said.
The company helps commercial motorcycle operators who wish to retrofit their bikes to environmentally friendly ones.
Emmanuel Hakizimana, an official at Ampersand, Africa’s electric motorcycles company working in Rwanda to assemble electric motorcycles, also said the facility will enhance the private sector’s contribution to the country’s response to climate change.
“The facility will ease access to needed green investment funds. Putting more e-motorcycles on the road or setting more battery swap stations all require money yet for startups in green business without collateral, it is not easy to acquire loans from banks,” Hakizimana said.
Ireme Invest is poised to offer a range of financial instruments tailored to meet the needs of Rwanda’s private sector.
Information from the Rwanda Green Fund shows that the facility has several financing instruments and two windows that will work in an integrated approach.
A project preparation facility at the Rwanda Green Fund will offer grants to cover early-stage project activities to move projects from feasibility to bankability while a credit facility embedded within the Development Bank of Rwanda will offer credit guarantees and concessional loans.
Rwanda has set an ambitious climate action agenda that the government hopes will build the country’s resilience and foster green growth.
To hit the goals, the country needs investments worth 11 billion U.S. dollars, according to the Ministry of Finance.
Teddy Mugabo, the Chief Executive Officer of Rwanda Green Fund, said achieving Rwanda’s ambitious climate action goals requires significant financial resources and collective stakeholders’ engagement.
“We are delighted to bring together public and private funding to boost the country’s efforts to address climate change. Ireme Invest will be a one-stop center for private sector-led green investments that will spur innovative green climate solutions,” she said.
According to officials, the facility will strengthen the country’s ownership of climate finance and build the green finance capacity of local banks through innovation, risk mitigation, and deal arrangements.
Kampeta Sayinzoga, the Chief Executive Officer of the Development Bank of Rwanda, described the Ireme facility as a truly unique green financing initiative that positions the private sector in the driver’s seat of Rwanda’s green growth while unlocking sustainable finance for the country’s banking sector.
“Climate change is a global crisis and everyone needs to play their role. That’s why we are delighted to work with a range of partners who have supported this impactful initiative,” she said.
The facility was designed to support Rwanda to achieve its climate and development goals as well as create green jobs through investments in sustainable agriculture, renewable energy and e-mobility.
Private sector companies operating in Rwanda will have the opportunity to partner with Ireme Invest from early 2023.
Investing in such sectors is hoped to drive Rwanda’s green growth and recovery through the creation of a more resilient and sustainable society.
Rwanda’s launch of Ireme Invest will foster private sector-led green growth and increase access to green finance in the country, said Ahunna Eziakonwa, Director of UNDP’s Regional Bureau for Africa.
Rwanda has cut 126,000 tonnes of carbon emissions over the last nine years owing to climate resilience investments.