The European Union will finance Rwanda’s
On September 23, Rwanda’s President Paul Kagame signed the support agreement in New York with Jose Manuel Durao Barroso, President of the European Commission, at the sideline of the Climate Change Summit.
The EU announced that Rwanda will benefit from its €3.3 billion ($4b) financing to clean energy projects along with five other African nations.
About €2b will be disbursed to five African countries, including Rwanda, Cabo Verde, Cote d’Ivoire, Liberia, and Togo.
Barroso said the EU will extend financial and technical support to countries that have demonstrated commitment to address energy issues through sustainable energy investments.
The fund will cater for various projects such as research and development, carbon pricing as means to raise funds to invest in low carbon energy. Africa will benefit by selling carbon credits to larger emitters.
To date, Africa is only using 12% of the world’s hydropower potential and is currently exploiting less than 10%. Rwanda plans to increase domestic production.
President Kagame said Rwanda wants to produce and consume more, not less. “But we want to do so sustainably and affordably. Ultimately, it is about faster progress for our people,” he added.
The country has already established a $75m fund (FONERWA) to run environment and climate change projects. The EU says supporting energy production projects opens up opportunities for the private sector to invest in sustainable energy.
Energy generation is expected to consist mainly of peat (255MW), methane (75MW), hydro (140MW) and solar (18.5 MW). Today, Rwanda generates 115MW from hydro power (53%), thermal (46%) and a small percentage from methane and solar.
Meanwhile, the EU delegation in Rwanda said a technical team is scheduled meet to work out what portion of the €2b will be allocated to Rwanda. The climate summit, hosted by UN Secretary General Ban Ki-moon, was attended by 100 heads of state and over 800 business, finance and civil society leaders.
Ideas discussed during the summit will produce a draft declaration agreement expected to be signed in Paris next year by countries conforming to it.