Rwanda’s “Green Investment Facility”, solely dedicated to financing private investors’ green projects is expected to be launched at the 27th UN climate conference (COP27) taking place from November 8 to November 18 in Egypt, officials have announced.
The CEO of Rwanda Green Fund, Teddy Mugabo disclosed this information in a Twitter space dialogue dubbed “Accelerating green investment and green investment opportunities”.
She said that the new financing facility for only private-sector green projects will be managed in partnership with the Development Bank of Rwanda (BRD). The facility will operate under the “Green Bank model and is seeking $100 million to start operations.
“We had to rethink about instruments we need to put in place to attract private capital. This is how the Green Investment facility came about. Its first objective is to leverage private investments and the second objective is to provide tailored financial products to attract the private sector,” she said.
She said that the fund aims to make green finance affordable.
“Green ventures are always seen as high risk. Commercial banks do not want to go that route because when we talk about green projects, there is a lot of innovation, there is a need to rethink technologies, and the moment you start thinking about these, perceptions of risk increase. So that is the role of the facility to de-risk,” she said.
Mugabo also disclosed that the financing facility has two windows.
One window which will be managed by Rwanda Green Fund (FONERWA) is the ‘project preparation facility.
“This will provide grants to support early-stage businesses. Here I mean we might have an entrepreneur who is in waste recycling who might have an idea that needs to be tested.
So through the project preparation facility, we want to support entrepreneurs by giving them business development support or they might need the grant to test their products like a proof of concept,” she explained.
She also highlighted that this window will finance feasibility studies for projects such as renewable energy projects.
“If they have to conduct feasibility studies, we will provide grants or reimbursable grants to them. We want to de-risk through grants where we can help projects move from ideation to bankability,” she said.
