By Collins Mwai
Rwanda’s energy ambition received a boost this week following an endorsement of a financial instrument by the Global Innovation Lab for Climate Finance that will accelerate the deployment of solar home systems.
The institution approved the piloting of solar securitization in Rwanda, which seeks to improve the financial capacities of developers to enable them to expand and meet the demands in the local market.
Rwanda targets to connect 300,000 households annually to off-grid energy solutions if it is to meet the 2024 access target.
It is anticipated that by 2024, off-grid solutions will contribute up to 48 per cent of national electrification.
Among the hurdles include the fact that considering that systems are financed by customers, sales have been relying on the solar developers’ ability to leverage their own balance sheets which are often constrained.
The firms have often been constrained due to substantial collateral required by few commercial and concessional funding sources available.
However, this is set to change with the financial instrument, solar securitization.
By pooling solar home system loans into tradable asset-backed security and providing solar developers access to more liquid capital markets, the intervention aims at increasing the developers’ ability to leverage and allow for a rapid expansion of the solar market…Read more>>