The green bank will be created to promote green investments in Rwanda and sensitize institutions across the country to finance green projects.
Doreen Nakure, communication specialist at Rwanda Green Fund (FONERWA) told IGIHE that FONERWA will be in charge of coordinating the activities of the green bank and has already hired a team of experts to design the blueprint of the bank incorporating all the functions the bank will execute.
“We have already launched a ‘Coalition for Green Capital’ study that will determine all the major processes the bank will undergo and the initial capital to be invested.”
The Coalition for Green Capital (CGC) is a non-profit organization that aims at accelerating the growth of clean energy markets through the creation of Green Banks.
Since 2009, CGC incubates local clean energy finance organizations, often called Green Banks and structures public, private and mission-driven capital for investment through those organizations.
It has not been communicated if the Bank will be owned by the Government of Rwanda or a private institution. However, Nakure says ownership will depend on many factors but what is more probable is that the Bank will be private-owned.
The main objective of CGC is to drive greater clean energy investment and creating a 100% clean energy platform, especially in developing countries.
The prospective creation of the Green Bank was announced during the UN Climate Change Conference COP 25 that was held in Spain from the 2nd to the 13th December 2019. The conference served to build ambition ahead of 2020, the year in which countries have committed to submit new and updated national climate action plans.
The decision comes after the Development Bank of South Africa (DBSA) and the Green Climate Fund (GCF) created a Climate Finance Facility with an initial capital of $100 million.
During the COP 25 conference, Dr. Anthony Nyong, Director of the Bank’s Climate Change and Green Growth Department at AfDB mentioned that technologies play a large roll in emission reduction for mitigating climate change.
“As a measure to reduce air pollution and tackle climate change, AfDB partners with various financial institutions to identify ways in which the effects of climate change can be reduced.”
The Government of Rwanda created FONERWA, an engine for green growth in Rwanda to support Rwanda’s commitment to building a strong green economy. Since its creation in 2013, 138,0000 green jobs have been created.
In 2017, 21,847 Hectares of land had been secured against erosion and 12,998 Hectares of watersheds and water bodies were restored. In addition, 41,116 hectares were prepared for Agroforestry while 65,430 families were connected to off-grid clean energy.
At the time, FONERWA had invested $100 million to support green institutions.
Rwamagana Power Plant which produced 8.5 megawatts is a great example of projects funded by FONERWA.
Vision 2050 anticipates that Rwanda will be a developed climate-resilient, low-carbon economy by 2050.