On the 27th of June 2013, the Government of Rwanda signed an historic agreement with Britain to capitalise its new national climate fund, Fonds National de l’Environnement (FONERWA), with £22.5 million support from DfID, making it the largest demand-based climate fund in Africa.

The signing of the capitalisation agreement sees the culmination of a year's work by the Government of Rwanda (GoR) and development partners to design a fund that meets both local development needs and the fiduciary requirements of international sources of finance. British support is also indicative of a wider favourable response to the GoR's consistent, long-term commitment to integrating climate compatible development into core national development polices, says FONERWA's Project Manager, Jahan Chowdhury,

FONERWA is designed as a ‘basket fund’ in which diverse sources of finance can be pooled. It will be the primary vehicle through which Rwanda’s climate and environment finance is channelled, disbursed and monitored. The Fund is an instrument to access international climate finance and streamline existing but previously fragmented domestic revenue streams. Line ministries, government agencies and districts, civil society, academic organisations, and the private sector can access the Fund through four thematic financing windows: Conservation and sustainable natural resource management; R&D, technology transfer and implementation; environment and climate change mainstreaming; and environmental impact assessment monitoring and enforcement. At least 20% of FONERWA is earmarked for the private sector and at least 10% for Rwanda’s local districts.

With the ICF's initial support, Rwanda can now start to finance climate change interventions that support the country’s national development agenda. The GoR has also earmarked £1.7 million of domestic resources to kick-start the Fund, signalling its commitment to predictable, sustained financing. Dr. Rose Mukankomeje, Director General of the Rwanda Environment and Management Authority (REMA), argues that the GoR "has demonstrated commitment to integrate environmental sustainability, climate resilience and green growth as critical inputs towards sustainable development. It has become increasingly evident that a sustainable financing mechanism presents the most realistic opportunity for our government to live up to this commitment.”

The focus now shifts to operationalising the fund through quarterly calls for project proposals by prospective public and private sector beneficiaries. Key to the Fund’s success is ensuring that governance and administration capacity exists within the public and private sector to access the Fund. Potential beneficiaries must also understand how climate finance works, how to scope eligible projects and how to structure successful proposals.

From 2013 to 2015, CDKN will support FONERWA by building capacity in the private sector, civil society and government agencies in various districts. Key stakeholders will be coached and mentored to develop concept notes and project proposals targeting the Fund and other climate financing sources, as well as project monitoring and evaluation matrices. The project will also build awareness on the relationships between climate, environment, and economic growth. The design and implementation team consists of local and international experts headed by the University of Wolverhampton’s Centre for International Development and Training.

Image courtesy of Timothy Kisambira (The New Times): Rwanda's Minister of Finance and Economic Planning, Amb. Claver Gatete, and Head of DFID in Rwanda, Mike Hammond, after the signing.

For more information on CDKN's support for the design of FONERWA, visit the project page.