European Investment Bank and Bank of Kigali Unveil EUR 100 Million Climate Finance Initiative for Rwandan Farmers

Strategic Insights -

The European Investment Bank (EIB) and Bank of Kigali have joined forces to develop a new EUR 100 million climate finance initiative aimed at supporting smallholder farmers and agribusinesses in Rwanda. The scheme, expected to be launched early next year, will provide dedicated, long-term loans to facilitate access to finance for private sector agriculture investment, helping the sector build resilience against climate change.

Key Takeaways:

  • The EUR 100 million climate finance initiative will provide dedicated, long-term loans to smallholder farmers and agribusinesses in Rwanda, helping the sector build resilience against climate change.
  • The scheme will target businesses owned and managed by women, as well as employing and serving women, with at least 30% of the total financing dedicated to female entrepreneurs or businesses.
  • The initiative aims to tackle the long-standing credit constraints holding back private sector agriculture investment by facilitating access to finance and will be implemented in close collaboration with the European Union.
  • The climate finance scheme will support investment to enhance agricultural productivity, enabling smallholders to invest in modern farming technologies and techniques, increasing crop yields and adapting to changing climate conditions.
  • The initiative will benefit the economy of Rwanda, which has experienced a temperature increase of 1.4 centigrade since 1970, higher than the global average, and is projected to experience an increase in more intense rainfalls.
  • Rwanda's agriculture sector contributes to over 60% of total employment, but access to finance is constrained due to factors such as lack of collateral, credit history, and limited access to capital markets.
  • The initiative will also help to improve access to finance for businesses owned by women, with a significant gender gap in access to agricultural loans remaining in Rwanda.

Statistics:

  • EUR 100 million in new climate investment is expected to be unlock by the initiative for smallholder farmers and agribusinesses.
  • At least 30% of the total financing under the new scheme will be dedicated for female entrepreneurs or businesses where a majority of employees are women.
  • Rwanda has experienced a temperature increase of 1.4 centigrade since 1970, higher than the global average.
  • Most parts of Rwanda are projected to experience an increase in more intense rainfalls, which will increase the intensity and frequency of floods and landslides.
  • Rwanda's agriculture sector contributes to over 60% of total employment.
  • 71% of all women in employment in Rwanda work in agriculture.

Sources:

  • Dr. Diane Karusisi, CEO, Bank of Kigali
  • Thomas Ostros, Vice President of the European Investment Bank
  • Jutta Urpilainen, European Commissioner for International Partnerships
  • Teddy Mugabo, CEO Rwanda Green Fund
  • Bank of Kigali Plc
  • European Investment Bank (EIB)
  • EIB Global
  • European Union