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Rwanda’s 1st green bank ups number of green banks to 35
Rwanda is planning to establish its first green bank, thus upping the number of green banks worldwide to 35.
The number of green banks worldwide rose from 12 to 35 in just two years in view of the international drive to curb climate change, the Central Bank of Rwanda said in a statement.
In press statements, Anthony Nyong, the Director of Climate Change and Green Growth department of the African Development Bank, underlined the importance of confronting climate change through developing technologies that would help attain this goal as soon as possible.
He added that the African Development Bank is cooperating with the Green Climate Fund and the alliance of green banks to explore ways of pooling up funds for confronting climate change and promote the role of the private sector in this score.
Rwanda and Climate Change
Rwanda has ambitious sustainable development goals but is vulnerable to climate change impacts, which are estimated to cost 1% of Rwanda’s annual gross domestic product. Rwandan farmers are losing on average 40% of their production due to climate change.
To address this challenge, Rwanda developed a Green Growth and Climate Resilient Strategy, a key component of which is the Environment and Climate Change Fund (FONERWA).
FONERWA aims to mobilize and manage resources to protect the environment and natural resources while helping the country adapt to climate change.
Launched in 2013 with funds from the UK Aid Department for International Development, FONERWA has provided financing for 23 climate change interventions—such as watershed protection, biogas feasibility assessment, and farmland terracing—that meet Rwanda’s sustainable development objectives and facilitate additional financial support from other donors.
In 2013, the country 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.
The fund managed to create about 138,000 green jobs, protect 19,642 hectares of land protected against soil erosion, cover 42,016 hectares of forest and agroforestry, get 61,592 households to have 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.
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