This partnership will encourage local currency financing for renewable energy with the Financial Systems Development Cluster of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
The East African country has an electricity access rate of 65.4%, of which 47.6% of households are connected to the national grid and 17.8% have access to electricity through off-grid systems (mainly solar), according to Rwanda Energy Group (REG). The Rwandan government aims to achieve universal access to electricity by 2024.
To keep up with the growth trajectory, investment in renewable energy has increased tenfold in Rwanda in recent times. It is of note that these investments have been made more with international capital and foreign currency. “Local currency financing is one of the missing links to increase investment flows into renewable energy,” notes GET.invest.
The newly launched collaboration between banks and programs will support financial institutions in Rwanda. It will see to the development and provision of financial products to increase the share of financing for renewables. In a first-round, the Bank of Africa Rwanda and Cogebanque will get access to tailor-made training and coaching to help expand their scope for action in this area.
“This partnership will enable us to offer specific financial services to actors and stakeholders in the renewable energy sector in Rwanda. We are pleased to partner with this important facilitator to help Cogebanque increase its outreach to small and medium enterprises (SMEs) involved in renewable energy projects,” says the bank led by Guillaume Ngamije Habarugira.
Having kicked off in June 2021, with an event organized in collaboration with the Rwanda Bankers’ Association, the project will run until the end of 2021.
Already, the two programs have started working with Bank of Africa Rwanda (BOA Rwanda), the subsidiary of the pan-African Bank of Africa (BOA) group based in Bamako, Mali. GIZ is also working with the Compagnie Générale de la Banque (Cogebanque), a financial institution based in Rwanda.
The German development agency’s program was set up by the German Federal Ministry for Economic Cooperation and Development (BMZ) with the aim of encouraging financial sector reforms. The EU launched GET.invest to support private sector investment in renewable energy.
Both programs are led by GIZ. The German financial institution is involving Rwandan banks in these programs to increase investment in decentralized renewable energy in Rwandan francs.