Rwanda Launches Coolease Scheme to Promote Adoption of Energy Efficient and Climate Friendly Cooling Solutions
The Coolease scheme is one of the first of its kind in Africa, and will enable suppliers and consumers of air conditioning and refrigerations products to transition to the latest technology without an upfront investment. This groundbreaking financial scheme has been developed through the Rwanda Cooling Initiative (R-COOL) and is in line with the Kigali Amendment to the Montreal Protocol, which requires all nations to phasedown refrigerants that are potent greenhouse gases.
Adopting more efficient cooling solutions saves electricity, which makes businesses more competitive, reduces strain on the electricity grid, mitigates air pollution and climate emissions, and preserves precious resources.
“With the National Cooling Strategy soon to be published, it is time to pivot from strategic planning to wide scale adoption of best practice cooling. Doing so requires us to have in place the policy instruments and financial mechanisms to enable this shift. That is why we are especially excited about today’s launch of the Coolease scheme. This innovative financial mechanism responds to the needs of both consumers and suppliers to access the kind of efficient cooling systems we need,” said Vicent Biruta, Minister of Environment.
The Coolease financial mechanism aims to overcome the challenges of the high costs and high-risk perception of energy-efficient products, competition with substandard and cheap equipment and the lack of accessible financing for the latest cooling technologies. It will also facilitate the creation of a pipeline to advance energy efficiency in Rwanda, open access to new markets for BDF and FONERWA, and attract international funding to capitalise a new Green Growth Guarantee Fund.
How Coolease Works
Coolease is provided by a financial institution to the client (typically an enterprise) through a finance leasing agreement, in which the air conditioning or refrigeration system is used as collateral. A dedicated leasing subsidiary is being set up by BDF to serve as a Special Purpose Vehicle to finance the cooling system for the client in exchange for monthly payments.
The technology provider installs the equipment and commits to providing high-quality maintenance, which is embedded into the Coolease agreement. A positive list describes which technologies are eligible for the programme, considering both their efficiency and refrigerant type. A Green Growth Guarantee Fund set up by BDF and FONERWA will cover part of the loss in case of default.
About the Rwanda Cooling Initiative
The Rwanda Cooling Initiative (R-COOL), funded by the Kigali Cooling Efficiency Program (K-CEP) and supported by the Rwanda Environment Management Authority (REMA), was launched in 2018 to showcase the benefits of a rapid and comprehensive transition to energy-efficient and climate-friendly cooling. The initiative has four main components:
The market assessment found that the current market size of refrigeration and cooling is worth approximately 35 billion Rwandan francs. The Rwanda Cooling Initiative, with Coolease as one of several financial mechanisms to be pursued, will be critical to channel such private capital towards superior cooling solutions.
About the Business Development Fund
The Business Development Fund (BDF) promotes small and medium sized enterprise development by providing financial services that enhance the lending mechanisms of financial institutions. www.bdf.rw.
About the Rwanda Green Fund
The Rwanda Green Fund is a national fund for environment and green growth in Rwanda. The fund invests in transformational projects that advance the green economy and works with partners to develop financial instruments to facilitate green business. www.fonerwa.org.
Topics
More posts
The Government of Rwanda has welcomed the outcomes of the 27th United Nations Climate Change Conference, known as COP27. At the meeting, nations…
Rwanda has on 14th November 2022 launched a new facility that will invest in climate action led by the public sector on the sidelines of COP27 in…
Rubavu, November 15th, 2022- From 14th to 15th November, The Rwanda Environment Management Authority conducted a two-day workshop to raise awareness…
Geneva, 10 November,2022 - The City Kigali received Wetland City Accreditation Award during the 14th Meeting of the Conference of the Contracting…
United Nations Climate Change Conference 27th Conference of Parties, Sharm El Sheikh, 8 November 2022
The President of the Republic of Rwanda, His Excellency Paul Kagame has on November 7, 2022 launched Ireme Invest at the United Nations Climate Change…
Rwanda will press for more ambitious climate action and share the country’s green investment opportunities at this year’s UN Climate Change Conference…
The Rwanda Environment Management Authority (REMA) and the United Nations Development Programme (UNDP) have today launched the “Landscape Approach to…
Kigali, 05th October,2022 – Development Partners, Public and Private institutions met for the Environment and Climate Change Thematic Working Group…