The World Bank has provided a credit of 50 million U.S. dollars to the Rwandan government to help the country improve access to electricity through off-grid renewable energy.
Rwanda’s Minister of Finance and Economic Panning Claver Gatete and World Bank Country Manager for Rwanda Yasser El-Gammal signed the financing agreement on Friday here.
According to the agreement, the Rwanda Renewable Energy fund Project (REFP) will help in implementation of the renewable energy program through catalyzing private sector investments in off-grid renewable energy access by addressing main challenges faced by the households and private companies in the off-grid market.
The project will also assist the government of Rwanda by 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 the country.
“Our target is to increase electricity access in Rwanda through off-grid technologies and facilitate private-sector participation in renewable off-grid electrification,” said Gatete at the signing ceremony.
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 ensure Savings and Credit Co-operatives (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.
“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 El-Gammal.