The news came during the event “Green Banks for country-driven climate: Showcasing country ambition” which was held on the sidelines of the Cop 25 in Spain. Rwanda will set up a bank specifically dedicated to green finance, the “Rwanda Catalytic Green investment bank”. This financial institution will serve to mobilise private financing to support the implementation of green projects in the country. In addition, the green bank should also constitute a climate finance hub for other African countries. For Anthony Nyon, Director of Climate Change and Green Growth at the African Development Bank (AfDB), it is time to link actions to words on the fight against climate change. “We need to address climate change with strong actions to develop the new technologies needed to do so. Therefore, the African Development Bank, with the support of the Green Climate Fund, is working with the coalition of green banks to explore different ways of harnessing and deploying capital to support local climate action, while increasing private sector participation.”
The bank, one more tool to deal with climate change in Rwanda
Rwandan farmers are losing on average 40% of their production due to climate change. In 2013, the country of a thousand hills established the Environment and Climate Change Fund (Fonerwa) to raise and channel domestic funds and finance environmental and climate change projects in both the private and public sectors. Since its creation, the fund has had an impressive track record: 138,000 green jobs created, 19,642 hectares of land protected against soil erosion, 42,016 hectares of forest and agroforestry cover, 61,592 households with better access to clean electricity through the off-grid.
Rwanda’s decision to set up a green bank comes one month after the AfDB, in partnership with the Climate Investment Fund (CIF), commissioned a study by the Green Capital Coalition (GCC) on the creation of green banks in Africa to improve access to green finance on the continent. Rwanda has just followed the lead of South Africa, which has set up the Climate Finance Facility (CFF), a bank that also finances green projects undertaken in the country.
Luchelle Feukeng