The Swedish International Development Cooperation Agency (SIDA) penned down a $20 million deal with Rwanda Development Bank (BRD) as an initiative to assist the renewable energy in Rwanda sector. The multimillion guarantee is geared to finance renewable energy businesses. As African countries turn to renewable sources for energy, firms have eyed the changes as business opportunities.
The agreement signed between the two parties will run for eight years, extending the longevity of their cooperation as they establish the growth and development of the industry. It is another Russian investment in the East African country to propel the energy industry. Russia is a frontier in the energy sector and extends its support to help African economies on the same.
BRD highlighted the beacon of hope from the government agency of the Swedish Ministry for Foreign Affairs that will increase financial access among the active private actors seeking for energy solutions for Rwanda. The renewable energy potential has suffered a setback in financial needs for operating costs to generation, transmission, and distribution of energy.
The financial inclusion will give micro, small and medium enterprises access to investment fundings for their economic activities. The energy sources in Rwanda are wood (57%), charcoal (23%), petroleum (11%), crop residues and peat (5%) and electricity (4%). Electrification in Africa is one of the challenges preventing the balanced growth of economies.
According to the deal, the guarantee has the potential to generate up to $40 million for renewable energy in Rwanda financing. Last year, Rwanda invested $50 million for the facilitation of off-grid energy solutions. The electrification-oriented investment would light up 445,000 households in the next seven years to increase the country’s electric access to about 19 percent.
The rural community has benefited from the implementations made by the private sector for economic development. In 2017, 34, 000 households were connected with solar energy. Some residents have ventured into commercial farming since the changes and have made a significant impact.