Rwanda launches $100mn facility for private sector green financing

Rwanda is taking a bold step towards promoting green investments in its private sector with the launch of a ground-breaking $100 million facility known as Ireme Invest. The aim of this new initiative is to facilitate access to green finance for Rwandan businesses while also enhancing the country's overall contribution to sustainability efforts. Teddy Mugabu, the CEO of the Rwanda Green Fund, discussed the significance of this development in an interview with CNBC Africa. Mugabu emphasized the pressing need to accelerate climate action and mobilize financial resources to combat the escalating impacts of climate change. One key approach highlighted in the conversation was leveraging public finance to attract private sector investments. Mugabu stressed the importance of blending public and private funds to address the financial challenges associated with climate change. The launch of Ireme Invest marks a crucial milestone in Rwanda's green financing landscape. With a capitalization of $104 million, the facility has secured funding from strategic partners such as the European Investment Bank, the International Finance Corporation, and the Canadian International Development Agency, among others. This collaborative effort underscores the importance of partnerships in driving sustainable development initiatives. Notably, the funding for Ireme Invest includes grants aimed at de-risking investments, as well as resources for debt financing and guarantees. By offering a mix of financial instruments, the facility aims to support a diverse range of private sector players, from early-stage startups to established businesses looking to scale their operations. Mugabu highlighted the inclusive nature of Ireme Invest, noting that the facility is designed to cater to entrepreneurs across the business lifecycle. Whether it's a young startup venturing into electric mobility or an established company seeking to expand its sustainability initiatives, Ireme Invest is positioned to provide tailored financial support. The facility's dual-window approach, comprising a project operator support facility and a credit facility, ensures comprehensive assistance for businesses at various stages of development. Under the project operator support facility, grants will be available to early-stage projects, fostering the creation of bankable sustainability initiatives. On the other hand, the credit facility, managed by the Development Bank of Rwanda, will offer affordable debt financing and guarantees to facilitate the growth of enterprises. This collaborative model between the Rwanda Green Fund and the Development Bank of Rwanda underscores the government's commitment to fostering a conducive environment for green investments. By addressing the financing needs of diverse private sector players, Ireme Invest is poised to drive sustainable growth and innovation in Rwanda's economy. The facility's focus on promoting climate-friendly businesses and technologies aligns with the country's vision of becoming a leader in green finance and sustainability.