The European Union (EU) announced that Rwanda will benefit from its €3.3 billion financing to clean energy projects along with five other African nations. Approximately €2b will be disbursed to five African countries, including Rwanda, Cape Verde, Cote d’Ivoire, Liberia, and Togo.
The financing is designed to develop sustainable sources of energy to maintain the country’s rapid growth whilst protecting the environment. Earlier this week, Rwanda’s President Paul Kagame signed the support agreement in New York with Jose Manuel Durao Barroso, President of the European Commission, at a side-line event of the Climate Change Summit.
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 aspects of projects, such as research and development, carbon pricing as means to raise funds to invest in low carbon energy. In the long term these African countries 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% of this capacity. President Kagame stated that, “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.”
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. Fonerwa’s strategy is to provide technical and financial support to the best public and private projects that align with Rwanda’s commitment to a green economy.
The agreement is expected to consist mainly of energy generation in 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.