Rwanda Green Fund – FONERWA | Rwanda

2018 Lighthouse Activity

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.

Helping the planet

Investments that have clearly demonstrated climate mitigation include the E-waste Management Project and the Integrated Land, Water Resources and Clean Energy Management for Poverty Reduction Project.

In the first six months of operation, the E-waste Management Project processed more than 120 tonnes of materials and prevented 279 tonnes of CO2 equivalent emissions. The plant has now been operational for almost one year, and significantly increased the volume of e-waste dismantled and recycled.

The Integrated Land, Water Resources and Clean Energy Management for Poverty Reduction Project is supporting the sustainable management and conservation of natural resources by protecting 1,400 hectares of watersheds, 50 kilometers of ravines and rivers, supporting two green model villages, enabling 1,200 households to access clean energy, distributing 1,000 improved stoves and 260 biogas digesters, controlling water hyacinth on 23 hectares and creating 2,850 green jobs.

In total, the Fund investments have reduced the equivalent of more than 18,500 tons of CO2 emissions.

Helping people

The Fund is investing just under USD 40 million in 35 projects that have created more than 137,500 green jobs, provided 57,500 households with improved access to off-grid clean energy, and protected 19,500 hectares of land against soil erosion, added 39,500 hectares of forest and agroforestry and protected 21,000 hectares of watersheds and water bodies. These investments have supported 104,000 people to cope with climate change.

Spillover effect

Due to the Fund's success over the last five years, many governments have sent delegations to Rwanda to learn from the Fund, including Benin, Kenya and Zimbabwe.

To support the replication of the Fund's success, the Fund, together with the United Nations Development Programme, and with support from the Republic of Korea, launched a web-based Centre of Excellence to share knowledge relevant to the promotion and achievement of locally-developed solutions to global environmental challenges.

The Rwanda Green Fund aims to be a dynamic, independent resource facility providing targeted financial and technical support to catalyse climate resilient development at scale, contributing to Rwanda’s vision of becoming a low-carbon and climate resilient economy by 2050.