The financing agreement was signed by Rwanda's Finance Minister, Yusuf Murangwa, and Italy's Minister of Environment and Energy Security, Gilberto Pichetto.
The funds will be made available through the Italian Climate Fund, managed by Cassa Depositi e Prestiti (CDP) bank.
The financing is part of the Italian Mattei Plan's energy security approach towards Africa and aims to support Rwanda's National Climate Action Plan and to bolster Rwanda's climate policy agenda by enhancing its resilience and adaptive capacity to the impact of global warming.
The Ministry of Finance, however, noted that the allocated resources will be made available upon the achievement of policy and institutional reforms that will 'integrate aspects of climate change mitigation and adaptation into the policy and regulatory framework'.
The reforms, the ministry added, will be essential to achieve the national targets for carbon emission reduction.
"Rwanda has placed climate action at the core of its development agenda, as evidenced by our National Determined Contributions (NDCs). To effectively implement the mitigation and adaptation measures outlined in the NDCs, financial, capacity building and technology transfer are essential. Therefore, the agreement we have signed today will significantly contribute to this endeavour, estimated at US$ 11 billion,' Murangwa remarked.
The Italian minister, on his part, expressed confidence in the investment addressing primary drivers of climate-related hazards.
"Italy, through the Climate Fund, continues its efforts to create the best conditions for growth on the African continent. With Rwanda, we will invest in planning, which is necessary to address the major climate issues affecting that region,' the minister stated.
The financing is part of a broader partnership involving multilateral and bilateral financing institutions. These include the International Monetary Fund (IMF), which provided a $319 million Resilience and Sustainability Facility (RSF) agreement to Rwanda in 2022. Other partners include the World Bank Group, the European Union (EU), the European Investment Bank (EIB), and other European development financing institutions through the Team Europe Initiative.
Rwanda's climate action journey has been quite remarkable as it was one of the first countries to ban plastic bags in 2008 and single-use plastics in 2019. Under the country's Vision 2050, Rwanda has a bold vision to become a carbon-neutral and climate-resilient economy by the middle of the century.
The government has an ambitious target to reduce greenhouse gas emissions by 38% by 2030, equivalent to an estimated mitigation of up to 4.6 million tonnes of carbon dioxide equivalent (tCO2e).
The country's efforts to limit its contribution to climate change and adapt to the consequences of a warming planet over the next decade are estimated at US $11 billion, made up of $5.7 billion for mitigation, and $5.3 billion for adaptation.
Rwanda secures $31 million funding from ICF
The Rwandan government recently also secured $31 million (approximately RWF 40 billion) to bolster its fight against climate change.
The funding is part of a $61 million investment approved by the governing board of the Climate Investment Funds (CIF) under the Nature, People, and Climate (NPC) investment program to support climate change interventions in the Dominican Republic and Rwanda.
CIF said the funding will help address systemic challenges holding back vulnerable populations in the Kaduha-Gitwe corridor and also support the launch of the Rwanda Wildlife Conservation Bond, an innovative capital market structured bond to promote biodiversity, including endangered chimpanzees. Both projects are implemented by the World Bank and co-financing of up to $283 million is expected.
In the Kaduha-Gitwe corridor, the plan will prioritize the restoration of degraded land and the sustainable management of forests and wetlands.
Wycliffe Nyamasege
