Rwanda has signed a $50 million Scaling-Up Energy Renewable Program (SREP) financing agreement with World Bank in an effort to increase the country’s electricity access through off grid renewable energy.
According to Africa Business Communities’ report, Claver Gatete, Rwanda’s Minister of Finance and Economic Planning, and Yasser El Gammal, World Bank Country Manager for Rwanda signed the agreement.
It is meant to help the government of Rwanda increase electricity access through off-grid technologies and to facilitate private-sector participation in renewable off-grid electrification.
In support of the recently approved Rural Electrification Strategy, the Rwanda Renewable Energy fund Project (REFP) will catalyze private sector investments in off-grid renewable energy access by addressing main constraints that face households and private companies in the off-grid market, the report says.
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To achieve this, the project will assist the Government of Rwanda establishing a Renewable Energy Fund (REF) which will help overcome financial barriers to scaling -up the deployment of standalone home systems and renewable energy mini-grids in Rwanda.
The fund which will be hosted in Development Bank of Rwanda ( BRD will allow qualified Savings and Credit Cooperatives (SACCOs) and commercial banks to open local currency lines of credit to provide affordable loans to their customers – both households and small businesses, for solar systems purchases. It will also facilitate collaboration between Rwandan financial institutions and private sector to ensure quality provision of off-grid services and provide direct financing to qualified mini-grid developers.
“The objective is to increase electricity access in Rwanda through off-grid technologies and facilitate private-sector participation in renewable off-grid electrification,”. The Minister of Finance and Economic Planning Claver Gatete said.
“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 Yasser El-Gammal, World Bank Country Manager for Rwanda
REFP aims to provide 445,500 new off-grid connections which will give about 1.8 million people access to off-grid 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.
The project will also ensure SACCOs and commercial banks gain knowledge and experience in lending to a new sector which can then support further investments.