Rwanda has secured a $310 million loan from the International Monetary Fund’s (IMF) Resilience and Sustainability Facility (RSF) to tackle climate change.
The development was announced on Oct. 7 by IMF’s Mission Chief Haimanot Teferra as she concluded her weeklong working visit to Rwanda.
According to the IMF, the loan will be accompanied by a new policy coordination instrument aimed at supporting the government to build on the progress in macroeconomic, fiscal and financial reforms to deliver more inclusive, resilient and sustainable growth.
“The RSF-supported reforms will help authorities to advance measures to integrate climate-related considerations in the design of macroeconomic policies and frameworks, enhance climate-related risk management for financial institutions, and strengthen the disaster risk reduction and management framework,” Teferra said.
While Rwanda has a well-advanced climate strategy, she indicated that it needs to further strengthen its institutions to deliver and monitor the ambitious climate objectives and to mobilize additional resources.
“Lower availability of concessional resources and increased needs for social protection will put pressure on the fiscal balance and limit policy space to confront development needs and address climate change,” said Teferra.
According to the Minister of Finance and Economic Planning Uzziel Ndagijimana, some resources for Rwanda climate action plan have already been mobilized and so far, the remaining gap stands at about $7 billion.
“This IMF support is a catalytic fund which is expected to trigger more financing from other institutions including the private sector. We are working well with our development partners in this area but also on private financing such as green bonds,” the minister said.