The Rwanda Development Bank (BRD) has received a Certificate of Merit at the recently held Karlsruhe Sustainable Finance Awards 2017 organised by the European Organisation for Sustainable Development (EOSD). The bank received the certificate specifically for its contribution to the ‘Bye Bye Agatadowa’ (Bye Bye Kerosene Lamps) program which seeks to promote off-grid, sustainable electrification.
The Karlsruhe Sustainable Finance Awards honour financial institutions and organizations with significant contributions to the field of sustainable finance. In a message of congratulations, Arshad Rab, the CEO of the EOSD, wrote: “Bye Bye Agatadowa, the BBA program financed by the Development Bank of Rwanda is an excellent initiative to reduce CO2 emissions, create new employment and business opportunities and provide light to millions of Rwandans. I congratulate Mr. Alex Kanyankole, CEO of the Development Bank of Rwanda, and his entire team and staff for their success in this project. It is my hope that this global recognition which they received in Karlsruhe, Germany will give them further strength for creating a prosperous and sustainable Rwanda.”
Kanyankole, expressed his delight with the recognition. “It shows that the wider stakeholders community recognises the work BRD is doing in financing sustainable energy,” he told Hope Magazine. “It gives us the impetus to do more with communities in Rwanda to provide sustainable energy with sustainable financing. The keyword is sustainable.”
The recognition comes shortly after BRD becomes the implementing agency for the Renewable Energy Fund (REF), which will make nearly $50 million available for sustainable energy projects.
The government has an ambitious target to increase electricity access to 70 percent by mid-2018. The EDPRSII aims to achieve 70% access to electricity by 2018 and 100% access by 2020. These targets are to be achieved through a combination of on-grid and off-grid connectivity. The EDPRSII sets 48% of the 2018 target to be achieved through grid extension and the remaining 22% through off-grid solutions. The current access to electricity, all combined is estimated at 34%.
The proposed SREP-funded REF project will directly support the implementation of Rural Electrification Strategy Program The REF is expected to increase off-grid energy access in Rwanda through effectively addressing consumer affordability and access to finance challenges, thus facilitating the achievement of the government’s off-grid access targets.
On the 20th June 2017, the World Bank Board of Directors approved the US$ 48.94 million Renewable Energy Fund, composed of $21.44 million as a grant and $27.5 million as a loan, and on the 7th July 2017 the agreements were signed between the WB and the GoR represented by MINECOFIN. On the same day, BRD which has been selected as the project implementing agency, signed the project agreement with the WB and will sign the subsidiary loan agreement with MINECOFIN prior to effective implementation of the REF.
The Project Development Objective (PDO) is to increase electricity access in Rwanda through off-grid technologies and facilitate private sector participation in renewable off-grid electrification. The final beneficiaries are Rwandan households and businesses, which will gain access to offgrid electricity services through solar systems or mini-grids and whose use of electricity will replace consumption of diesel, kerosene, and dry cell batteries as well as other alternative fuels.
The direct project beneficiaries include:
(a) participating SACCOs and commercial banks, which will gain knowledge and experience in lending in a new sector;
(b) mini-grid developers who will gain access to finance to build mini-grids; and
(c) private companies engaged in off-grid electrification (mini-grid developers and potentially locally registered OSCs), which will get access to financing for expanding their businesses in Rwanda as well as gain experience of working with local financial institutions.
The project will facilitate the deployment of 445,500 off-grid connections and benefit 1.8 million people, 52% of whom are women. Project Components
BRD will administer the REF. The project is structured around two components: 1) a Line of Credit and Direct Financing for Off-grid Electrification, and 2) Technical Assistance, Capacity Building, and Project Implementation Support.
The REF will provide lines of credit to local financial institutions for sub-loans to households and micro, small, and medium enterprises, as well as direct loans to private companies engaged in off-grid electrification (mini-grid developers and potentially locally registered OSCs).
The REF will use existing country systems (SACCOs) to facilitate access to finance for households and businesses, improve affordability of solar electricity services, and maximize geographic coverage.
This component will provide the necessary technical assistance and capacity building on a need basis to BRD and participating entities (SACCOs, banks, and private companies engaged in off-grid electrification) as well as provide project implementation support to BRD as a host of the REF.
Technical assistance and capacity building will include, among others:
Read this article and more in issue n° 78 of Hope Magazine.