Prime Energy receives approval to issue the first-ever green bond in Rwanda

RWANDA – Prime Energy Plc, an independent hydropower producer, has received approval from the Capital Market Authority (CMA) to issue Rwanda’s inaugural green bond.

This milestone marks a significant step forward in sustainable finance within the East African region.

The green bond, with a seven-year tenor and valued at Rwf9.5 billion (US$7.4 million), is supported by the International Finance Corporation (IFC) and will be listed and traded on the Rwanda Stock Exchange (RSE). Trading commenced on March 18th and will conclude on April 5th, 2024.

Green bonds are instrumental in mobilizing finance for projects with positive environmental impacts, such as renewable energy and green infrastructure.

Prime Energy intends to utilize the funds raised to finance the 10MW run-of-river Rukarara VI Project and to maintain its existing plants across Rwanda.

Sandy Rusera, CEO of Prime Energy, emphasized the significance of this move, stating that it provides the company with alternative financing options through capital markets and facilitates the expansion of clean power provision in Rwanda.

“We’re excited to use this type of instrument to increase our hydropower capacity and explore new opportunities to bring sustainable energy to more communities,” said Rusera.

Prime Energy currently operates four hydro-power plants across Rwanda under 25-year concession agreements with the government and power purchase agreements (PPAs) with Energy Utility Corporation Limited (EUCL).

This initiative comes on the heels of another significant development in Rwanda’s financial landscape, with the Rwanda Stock Exchange welcoming a Rwf30 billion (US$ 23.23m) Sustainability-Linked Bond (SLB) rolled out by the Development Bank of Rwanda (BRD) in October 2023.

This bond aims to attract investments to support sustainable development projects, SME financing, and affordable housing mortgages.

The issuance of Prime Energy’s green bond underscores Rwanda’s commitment to promoting environmentally responsible investment and advancing its renewable energy goals.

It sets a precedent for future green financing initiatives in the region, reinforcing Rwanda’s position as a leader in sustainable development efforts.

In a separate development, Norwegian Investment Fund for Developing Countries (Norfund) recently announced the sale of its assets in two operational solar photovoltaic power plants in Rwanda and Mozambique.

In Rwanda, NORFUND played a pivotal role in establishing the country’s inaugural photovoltaic solar power plant in the Rubona district.

Operating since 2015 and connected to the Rwanda Energy Group (REG) grid, this plant boasts an impressive 8.5 MWp capacity.

NORFUND’s ownership stake in this infrastructure, locked in for an additional 16 years, has been transferred to US-based Fortis Green Fund I, Rwanda Holdings, and Axian Energy of Madagascar.

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