NDF - Financing for climate change and development projects

Support to Green Bank Development in Rwanda

Photo: Aage Jorgensen
Photo: Green Climate Fund

NDF, African Development Bank (AfDB), UNDP and Rwanda Green Fund (FONERWA) will share the costs of the design, capacity-building, and capitalisation of Rwanda Catalytic Green Investment Bank (RCGIB)

The Nordic Development Fund (NDF) has approved a booster grant of EUR 350,000 that will contribute to the costs of establishing the RCGIB legal structure as an upgrade of the FONERWA, preparing a full funding proposal to Green Climate Fund for financing the capitalisation of the RCGIB, and defining and initiating the RCGIB staffing and recruitment process.

FONERWA is Rwanda’s own green fund and has a key role in mobilising and providing grants for projects relating to climate change. Now, the Government of Rwanda would like to see FONERWA evolve into a “Green Bank”, Rwanda Catalytic Green Investment Bank, to further strive for their ambitious green growth and national development objectives. 

Around the world, green banks have demonstrated the ability to use public capital to drive green investment. Existing green banks within the global Green Bank Network (GBN) have used approximately USD 15 billion in public capital to mobilise more than USD 50 billion in total green investment, lowering CO2 emissions, increasing climate resilience, and creating thousands of jobs to support economic growth and employment.

The RCGIB is specifically designed to support implementation of Rwanda’s Nationally Determined Contributions (NDCs), green growth objectives and national development goals, plans and targets. Moreover, the institution is dedicated to fill Rwanda’s local market gaps, attract public and private funding, and benefit from a tax incentive to achieve its mission while supporting national green growth objectives. The RCGIB will also be part of  the Kigali International Finance Centre (KIFC), and through that, will be potentially able to provide climate financing to a regional market.

To meet the Rwandan needs and opportunities, this institution will identify demands and high impact opportunities in the field of climate change and green growth, and promising innovative solutions. It will invest in solution providers and support them to establish themselves and to grow in the target markets.

This type of a unique institution with different financing instruments, exclusively targeting climate investments, does not yet exist on the continent. The RCGIB will pilot a model with broad application across Africa and elsewhere in the developing world. Through creating institutional capacity to catalyse innovative green finance, the RCGIB will improve the climate finance architecture and demonstrate a powerful new model to accelerate investment in sustainable economic development based on climate adaptation and mitigation. 

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