The fund which is managed by the World Bank is expected to facilitate the electrification of about 445,000 households in the next seven years.
This will increase electricity access in the country by about 19 percent. The current energy access rate stands at about 40 percent.
The funds will also be used to avail credit facilities to mini-grids and developers in the sector.
The intervention comes barely a month after local players in the renewable energy sector under their umbrella body, Energy Private Developers, had come out seeking to finance to help meet
national targets.
The chief investment officer at BRD, Dr. Livingstone Byamungu, said the main aim of the fund is to increase affordability and reduce access to fiscal challenges.
“The target beneficiaries are businesses and households with an objective to replace the use of diesel, kerosene, and dry cell batteries,” he said.
Tier 1 off-grid solutions that provide a basic service level such as radio, lighting and cell phone charging will also be supported by the fund.
The energy division manager at the Ministry of Infrastructure, Robert Nyamvumba, said the fund will go a long way in increasing the role of the off-grid solution in national electricity roll-out.
Off-grid solutions are meant particularly target rural areas that have the least access to energy and according to the current strategy, off-grid solutions are meant to account for about 48 percent of national energy provision while on-grid solutions account for the rest 52 percent.
In a bid to continuously improve Rwanda’s investment climate access to electricity remains a priority.
Yasser El Gammal, Country Manager of the World Bank said the intervention is meant to boost rural electrification efforts to expand off-grid connections to benefit about 1.8 million citizens.
“It is expected to increase demand by providing finances to small businesses and households through financial institutions near them. This also gives an opportunity to assist the private sector and providers of mini-grids to further boost capacity, thus impacting both the demand and supply side,” Gammal said.
The intervention targets rural areas which have very low energy access rates.
Dr. Ivan Twagirashema, Chairperson of Energy Private Developers, in a recent interview said there are over 100 private sector players in the local renewable energy sector with limited impact largely due to financing challenges.
There are three major operators in the solar sector which have so far about 11 percent of national penetration, BBoxx, Mobisol, and Ignite power.
The government intends to extend electricity to the entire country by 2024.
