Rwanda Green Fund – FONERWA | Rwanda

The Rwanda Green Fund (FONERWA) is investing in public and private projects that drive transformative change. It is one of the first national environment and climate change investment funds in Africa.

The Fund invests in sustainable wealth creation and poverty reduction by providing strategic financing that accelerates Rwanda’s commitment to building a strong climate resilient and green economy. Funding proposals are approved based on careful evaluation to ensure their return on investment contributes to Rwanda’s climate resilience.

Key facts

  • The Rwanda Green Fund has committed investments of just under USD 40 million to 35 projects;
  • The Fund has created more than 137,500 green jobs, provided more than 57,500 households with improved access to off-grid clean energy and protected 19,500 hectares of land against soil erosion;
  • Investments have supported 104,000 people to cope with the effects of climate change and planted 39,500 hectares of forest;
  • Investments have reduced the equivalent of 18,500 tonnes of carbon dioxide emissions;
  • In total, the Fund has raised approximately USD 130 million for strategic climate resilience investments in Rwanda.

The problem

Rwanda is highly vulnerable to climate change and relies heavily on rain-fed agriculture and hydropower. Rwanda has experienced a temperature increase of 1.4°C since 1970, higher than the global average, and can expect an increase in temperature of up to 2.5°C by the 2050s. This effects not only Rwanda’s environment, but also impacts its population as rain-fed agriculture remains the main source of livelihood for the majority of people and contributes to a third of the country’s GDP.

The solution

The Rwanda Green Fund facilitates direct access to international climate finance and streamlines and rationalizes external aid and domestic finance.

Financing from the Fund can be accessed by Rwanda’s government ministries and agencies, districts, and civil society organizations, including academic institutions and the private sector. The Fund has several investment products, including grants, innovation investments, and credit lines.

Innovation investments are performance-based investments for research and development, proof-of-concept and demonstration. Private sector companies can apply for up to USD 300,000 and must provide 25% match funding. The Fund provides Rwanda’s cheapest money with a credit line that provides financing at 11.45%, well below market rates of approximately 18%. Developed with Rwanda’s Development Bank, private sector companies must provide 30% match funding. The minimum loan amount is USD 70,000.