The government and the World Bank on Friday signed a $48.94 million (about Rwf 40bn) financing agreement to increase electricity access through off-grid technologies and to facilitate private sector participation in renewable off-grid electrification.
The funds will be channeled through the Development Bank of Rwanda (BRD), which will offer qualified SACCOs and commercial banks local-currency credit lines to provide affordable loans to households and small businesses to purchase solar systems.
“The main objective is to increase access to electricity in Rwanda through off-grid technologies and facilitate private sector participation in renewable off-grid electrification,” explained Finance Minister Claver Gatete.
To achieve this, the project will assist the government to establish a renewable energy fund which will help overcome financial barriers and accelerate the adoption of standalone home systems and renewable energy of mini-grids. The Rwanda Renewable Energy Fund Project (REFP) will catalyze private sector investment in off-grid renewable energy access by addressing the main constraints that face households and private companies in the off-grid market.
“I hope that the renewable energy fund becomes a vehicle to crowd-in resources to the off-grid electricity sector, attracting financing from both private sector and development partners,” said the World Bank Country Manager for Rwanda, Yasser El-Gammal.
The REFP aims to provide 445,500 new off-grid connections which will give about 1.8 million people access to electricity. These new consumers will use electricity for the first time and move away from expensive and harmful fuels such as diesel, kerosene and dry cell batteries.