Rwanda has secured $310 million (approximately Rwf318 billion) loan from the International Monetary Fund (IMF)’s Resilience and Sustainability Facility (RSF) to tackle climate change.

The development was announced on October 7, by IMF’s Mission chief Haimanot Teferra, as she concluded her week-long working visit to Rwanda

According to the IMF, the loan will be accompanied by a new policy coordination instrument aimed at supporting the government to build on the progress in macroeconomic, fiscal, and financial reforms to deliver more inclusive, resilient, and sustainable growth.

"The RSF-supported reforms will help authorities to advance measures to integrate climate-related considerations in the design of macroeconomic policies and frameworks, enhance climate-related risk management for financial institutions, and strengthen the disaster risk reduction and management framework,” said Teferra.

While Rwanda has a well-advanced climate strategy, she indicated that it needs to further strengthen its institutions to deliver and monitor the ambitious climate objectives and to mobilize additional resources.

"Lower availability of concessional resources and increased needs for social protection will put pressure on the fiscal balance and limit policy space to confront development needs and address climate change,” said Teferra.

Rwanda has a climate action plan that will cost US$11 billion (about Rwf11.2 trillion) through 2030. The cost for mitigation measures is estimated at around US$5.7 billion while over US$5.3 billion will go to adaptation priorities.

According to the Minister of Finance and Economic Planning Uzziel Ndagijimana, some resources for Rwanda climate action plan have already been mobilized and so far, the remaining gap stands at about US$7 billion of the needed amount.

"This IMF support is a catalytic fund which is expected to trigger more financing from other institutions including the private sector. We are working well with our development partners in this area but also on private financing such as green bonds,” said the Minister.

Economy to grow by 6.8 per cent

In a related development, the IMF also announced that it estimates Rwanda’s economic growth to stand at 6.8 per cent in 2022 which is higher than was the Ministry has projected.

The Ministry has projected a 6 per cent growth after revising it downwards from the initial 7.2 per cent due to global shocks like the Russia-Ukraine war impacts, among others.