Building a Green Economy through Rwanda’s Green Fund

Select This

Select solutions you want to learn more about and connect to the appropriate solution provider.

As one of the most vulnerable nations to climate change, Rwanda is acutely aware of the challenges that lie ahead. For this reason, the country established a groundbreaking investment fund to support green projects that can realize Rwanda’s vision of becoming a low-carbon and climate-resilient economy by 2050. The fund has created over 100,000 jobs and mobilized around US$100 million and is a leading example of climate financing for the achievement of the SDGs.

Affordable and Clean Energy , Decent Work and Economic Growth , Sustainable Cities and Communities , Climate Action , Life on Land

Landlocked in the heart of Africa, Rwanda looks like a tropical version of Switzerland. Conical mountains shrouded in equatorial jungles helped earn Rwanda the moniker of ‘Le Pays des Mille Collines’ (Land of a Thousand Hills). The country, left in ruins after genocide in 1994, has rapidly rebuilt. Rwandans have used development aid effectively, and have left the horrific memories of the genocide behind. However, the fertile and flourishing lands of Rwanda are at risk. The growing population – expected to double over the next 20 years – is inevitably putting pressure on the soil, rivers and forests of a mostly rural economy. Adding to that are the threats of climate change. All estimates of the impact of climate change suggest that Africa will be hit the hardest. Climate change is already intensifying droughts and crippling the continent's vulnerable agricultural sector. The reality is that without a sustainable environment, the plans of economic development in Rwanda are at risk of failing. This has encouraged the government to consider a national priority.

Rwanda has set an ambitious – and extremely necessary – vision to become a low-carbon and climate-resilient economy by 2050.  

To turn this vision into reality, the country established a groundbreaking environment and climate change investment fund. Locally known as Fonerwa, this green fund quickly became the largest of its kind in Africa.   

The fund invests in initiatives that put environment and climate change at the centre of development. Today it supports 35 projects that are helping to restore watersheds, combat erosion, connect off-grid families to clean energy, and much more.  

In 2017, the fund reached an impressive milestone: the creation of more than 100,000 jobs. The flexibility of the fund enables the provision of resources for all kinds and sizes of initiatives, and across all sectors of the society.  

From a community-based system that harvests rainwater running off rooftops, to a government-led e-waste management strategy, zero-carbon affordable housing, and a business-led 500 kW hydropower plant along the Gaseke River. 

The fund is open for applications twice a year. A committee assesses all submitted proposals through a rigorous and transparent process. Projects must show their potential to contribute to the sustainable development ambition of the country.        

The fund has mobilized around US$100 million to date. Most of this funding comes from central government revenue streams – including from environmental impact assessment, fines and fees – making the fund less volatile to external aid shocks. 

The international community and the private sector also contributes to the fund’s capitalization.  Rwanda’s green fund is a leading example of the impact that well-managed climate financing can have.  

Malawi is already following Rwanda’s footsteps, and Tanzania and Zambia have also demonstrated interest in establishing green funds in their countries inspired by this successful experience. Rwanda may have just planted the seeds for Africa to grow greener.

Rwanda

UNDP , Global Green Growth Institute , Green Climate Fund , UK DFID , Development Bank of Rwanda , GIZ

N/A

Our Partners