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Rwandan banks collaborate with European programmes to increase renewable energy investments

30 August 2021 | GET.invest and the GIZ Financial Systems Development Cluster have joined hands with financiers in Rwanda to increase investments in decentralised renewable energy projects. The collaboration is part of GET.invest’s mission to strengthen renewable energy markets. Both programmes, GET.invest and GIZ Financial Systems Development Cluster, are implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

Although investments in renewable energy in Rwanda have increased over the past years, this has mostly been done with international capital and foreign currency. Local currency financing is one of the missing links to scale up investment flows into renewables. The newly launched collaboration between banks and programmes aims to support financial institutions in Rwanda in developing and offering finance products to increase the share of financing for renewables. In a first round, the Bank of Africa Rwanda and Cogebanque will be provided with tailor-made training and coaching to expand their scope for action in this area.

Statement from Cogebanque
“Among the key challenges for companies involved in renewable energy in Rwanda is lack of financial support (Mainly financial advisory services, training and products tailored to this sector) and market insights. This partnership will allow us to offer specific financial services to the sector players/ stakeholders in the country. We are happy to partner with this important facilitator to support Cogebanque to increase its outreach to SME customers involved in the renewable energy projects.”

Statement from Bank of Africa Rwanda
“Rwanda is blessed with renewable energy resources, but there is still untapped potential especially in micro hydropower. To address the low rural electricity access level and the relatively high cost of existing generation alternatives, the government has embarked upon a sizeable micro hydro development programme to provide power to rural villages and towns. This initiative aims at strengthening the national energy security, safeguarding the environment, and preserving the other energy sources. At Bank of Africa, we have a mission of partnering with the Government in its development agenda and we see renewable energy as a viable and profitable investment opportunity. It is in order that the Bank capitalises on available capacity building programmes that will vest the Bank’s business teams with required technical knowledge in driving investment in renewable energy to ensure processes’ efficiency, effective risk mitigation and ensure that it is profitable.”

The focus of the tailored activities is now being determined and may include advisory on due diligence processes and developing specific financial products for renewable energy projects and companies. In parallel, a virtual event series will be organised in collaboration with the Rwanda Bankers’ Association (RBA) in the remainder of this year, focusing on providing a better understanding of potential clients in the renewable energy sector and facilitating dialogue of financiers and companies and projects from the renewable energy sector.

Statement from the Chief Executive Officer of the Rwanda Bankers’ Association (RBA)
“Rwanda Bankers’ Association welcomes the entrance of GET.invest and the GIZ Financial Systems Development Cluster into the Rwandan finance ecosystem to create avenues of access to affordable financing for mobilisation of private sector investments in renewable energy projects. As an association, we are supportive to initiatives that continue to improve access to affordable finance for Rwandans to further unlock economic potential. We look forward to the impact of the project.”

The project, similar to work conducted by GET.invest and the GIZ Financial Systems Cluster in Mozambique, was kicked-off in June 2021 with a roundtable organised in collaboration with the Rwanda Bankers’ Association, attended by over 40 participants from 17 banks. It is foreseen to run until the end of 2021, with a potential for extension.

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