RWANDA – The European Investment Bank (EIB) and the Bank of Kigali have announced a groundbreaking sustainable agriculture financing initiative, marking the largest-ever EIB support for private sector investment in Rwanda.
The new scheme, the first climate resilience business finance initiative in the country, is anticipated to generate €100 million in new climate investment, benefiting smallholder farmers, agribusinesses, and women-led enterprises.
The initiative, set to be launched early next year, aims to address longstanding credit constraints that have hindered private sector agriculture investment in Rwanda.
By facilitating access to dedicated, long-term loans, the partnership between the EIB and the Bank of Kigali seeks to provide financial support to farmers, agribusiness companies, and agricultural cooperatives.
Rwanda Green Fund CEO Teddy Mugabo expressed pleasure at the additional climate finance partnerships, emphasizing their alignment with Rwanda’s ambitious climate action plan to reduce carbon emissions by 38% by 2030.
He lauded Bank of Kigali’s role in incorporating green financing, paving the way for other commercial banks in Rwanda.
The initiative has been developed in collaboration with the European Union, which supports agriculture programs in Rwanda, including value chain development in horticulture and aquaculture.
Bank of Kigali CEO Dr. Diane Karusisi highlighted the role of finance in building resilience against climate change impacts, stating that the comprehensive private sector financing scheme would accelerate climate change adaptation, foster sustainable development, and enhance economic opportunities, particularly for women.
Rwanda has experienced a temperature increase of 1.4°C since 1970, exceeding the global average. The climate finance scheme aims to support investments that enhance agricultural productivity, allowing smallholders to adopt modern farming technologies and techniques.
This, in turn, is expected to increase crop yields and help farmers adapt to changing climate conditions, ultimately contributing to a more stable and secure food supply.
Recognizing the gender gap in access to agricultural loans in Rwanda, the new initiative includes dedicated financing for businesses owned and managed by women.
In a bid to address the significant disparity, at least 30% of the total financing under the scheme will be allocated for female entrepreneurs or businesses where the majority of employees are women.
The initiative aligns with the Global Gateway partnership and underscores the commitment of the European Investment Bank and the Bank of Kigali to supporting sustainable agriculture, climate resilience, and economic empowerment in Rwanda.
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