The Kigali International Financial Centre (KIFC) launched its sustainable finance roadmap recently - a move intended to elevate Rwanda’s sustainable green investments. The roadmap was developed following a partnership with the United Nations Development Programme (UNDP) and the government. According to KIFC, the (2022-2029) roadmap aims at unlocking green finance and promoting Rwanda as a financial center, particularly in two key facets, of ‘scaling sustainable finance’ and ‘making finance sustainable.’ “Better Environmental, Social and Governance scores translate into lower cost of capital. ESG improvements lead to higher company value. The future of finance is only sustainable.” Nick Barigye, CEO Rwanda Finance Limited told a packed audience in Kigali’s Marriott Hotel. Barigye said that there are key strategic objectives under the sustainable finance roadmap among which include, requiring KIFC to have financial instruments that will support its ambition of becoming a sustainable finance hub; to develop the necessary financial sector infrastructure to support sustainable finance instruments as well as cultivating the first-class human capital needed to build and underpin this sustainable finance infrastructure. “So, to be able to attract investments you need to have the infrastructure in place, you need to have the skills, and then you need to attract the capital,” he added. Under the development, KIFC seeks to attract sustainable venture capital, build a sustainable stock market, transition to sustainable lending as well as develop sustainable debt capital markets. Equally important is the need to expand the sustainable insurance sector, enhancing Rwanda’s financial sector environmental, social and governance risk management, improving Rwanda’s corporate ESG disclosure and reporting as well as capacity building in sustainable finance. With growing competition for international capital across the world, it is clear that global capital is increasingly being allocated toward sustainable financial strategies. Currently, very few Rwandan companies would qualify for investment under any of these strategies, let alone the challenges presented by the relatively small size and low liquidity of the Rwanda Stock Exchange. However, Barigye said that Rwanda already has good leadership and a political will to make this happen but every investment decision made in projects, should consider important issues to do with environmental, social, and governance. Barigye showed that sustainability in financing has largely been female dominated, citing that the new roadmap refocuses on the vice.= For instance, available data shows that 84 percent of funding for African startups (close to $9.8billion since 2019) has gone to male-founded businesses and only one percent is allocated to female-founded businesses, which equates to around $146 million. “The roadmap is also timely in that it is addressing the concerns of millions of Youth on the continent whose overarching concern is access to sustainable finance, particularly as small youth-led businesses,” UNDP Deputy Resident Representative, Varsha Redkar Palepu Palepu said. Participants agreed on collaboration and coordination in implementing the roadmap (especially capacity building and policy needs) but specifically in the green growth agenda, the Global Green Growth Institute (GGGI) called for concerted efforts to raise the $ 11 billion needed by 2030 to implement the green growth agenda. Investors like Dalberg Advisors represented by CJ Fonzi revealed that they are already in the country to invest in carbon credits, an initiative that will contribute to the green growth agenda and create incomes. Experts weigh in “We are all talking about climate change and the green transition, all of these big moves that we need to make need to be financed,” Rolande Pryce, the World Bank Group Country Manager told The New Times in an exclusive interview. The financial sector, she added, has a leading role in terms of mobilizing resources, and in terms of awareness. “The financial sector can be catalytic, as well as essentially facilitating the change by providing the resources but also by incentivizing the change.” “This sets a framework for KIFC and all the commercial financiers and all private sector actors who are looking for the funds.” Pryce shared similar sentiments with Robin Bairstow, CEO of I&M Bank, and also doubles as the chairman of Rwanda’s Banking Association. “It is a fantastic initiative, it has the right intentions in terms of bringing public-private partnerships together with the developmental organizations, bringing us all together and focusing on one goal, which is sustainability, being mindful about the environment, and working towards the goals that have been,” Bairstow said. He added, “We have already made access to green funding, we have green funds available at concessional pricing, we have selection criteria, what people need to understand is that green funding goes much further than renewable energies.” According to him, there are currently a tremendous amount of projects that qualify for green funding and the funds are available. “We are also working with the bankers association to ensure that our bankers are all skilled in sustainable finance.”
