Female borrowers in Rwanda are set to benefit from more funding in the energy sector.

This follows a recently signed $40 million (Rwf34. 3 Billion) worth energy portfolio guarantee agreements partnership between Development Bank of Rwanda (BRD) and The Swedish International Development Cooperation Agency (Sida) which has allocated more funding to women.

The guarantee programme aims at increasing access to finance for small and medium sized private actors to support the development of affordable and clean solutions in the country.

The bigger part of the fund worth to $30 Million (Rwf25.7 billion) is intend to be covering the financial institutions and facilitating increased lending by financial institutions to Micro, Small and Medium size Enterprises (MSMEs) that are in renewable energy sector in Rwanda.

While the remaining $10 million (Rwf8.5 billion) worth guarantee facility is meant to cover the mini-grids.

This will see the maximum guarantee amount per the qualifying borrower SME that is active in the renewable sector offered with $500, 000 (Rwf429 million) and $700, 000 (Rwf600 million) for female borrowers.

“Supporting increased access to finance for clean energy is a crosscutting enabler for sustainable economic development, human health, equitable growth and quality of life for poor and vulnerable communities,” said Eric Rutabana, the Chief Executive Officer of BRD.

“We see businesses and households benefiting through the programme but in terms of risk coverage we see the financial institutions,” he added, pointing out that investments in small off-grid energy solutions will help increase access to electricity countrywide. 

According to Mikael Boström, the Head of Development Cooperation at Swedish Embassy in Rwanda, the support will boost Rwanda’s efforts to achieve continued sustainable development, expansion of affordable and renewable entity solutions.

This is essential to improving environmental sustainability enhancing resilience to the environmental degradation by reducing the dependence on unsustainable and unclean energy sources according to Boström.

According to the industrial figures, investing in mini-grids costs range between Rwf858, 000 ($1000) and Rwf1.4 million ($1500) for each connected consumer, which is about 50 per cent higher than connecting consumers to the national on grid connections.

While Rwanda has ambitious target of 48 per cent off-grid and 52 on grid connections by 2024, data from the Rwanda Energy Group, a public utility company, shows that off-grid connections have only reached 11 per cent while on-grid is 32 per cent.

What are mini-grids?

Mini-grids—electrical generation systems of less than 10MW that serve customers through local distribution networks—are emerging as promising complements to the traditional central grid.

They can help countries meet electricity access targets faster and, in some cases, more cost-effectively.

By generating electricity close to where it’s needed, and with the advantage of flexibility and scale, mini-grids can become the standard choice for the millions of rural Africans who live far from the central grid and who would otherwise have to wait several years, or even decades, for an electric connection.

By 2040, an estimated 140 million rural Africans could get electricity from mini-grids, requiring more than 100,000 additional units to be built. Source: World Resources Institute.