Mobilizing and delivering private-sector finance for climate–resilient investments
Stockholm Environment Institute (SEI), FONERWA, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)
Rwanda is often recognized as a model for how to attract and reap the benefits of international development cooperation. Its economy grew by more than 8% per year between 2001 and 2015; corruption is low; and it has one of the best “ease of doing business” rankings in Africa. At the same time, achieving Rwanda’s sustainable development agenda and addressing the impacts of climate change will require significant additional financing. Climate change is a particular concern. Floods and droughts already cause major socio-economic impacts, highlighting the imperative of implementing adaptation activities that can reduce these and other effects of climate change.
While public climate finance will remain important source of funding for adaptation-related activities, it is unlikely to be enough. This means Rwanda needs to consider how to mobilize other sources of finance – especially from the private sector. The private sector is already expected to play a key role in financing the Green Climate Fund, which aims to mobilize 100 billion usd per year to support climate action in developing countries. While the Paris Agreement places more emphasis on public-sector finance, it also calls on countries to scale up climate finance “from a wide variety of sources”.
The workshop looked at the challenges and opportunities for Rwanda in accessing finance for adaptation to climate change, and on the opportunities for mobilizing private-sector finance. SEI research in 2016 has highlighted that Rwanda has in place a supportive policy framework for encouraging the private sector to invest in adaptation-related sectors. However, there appears to be little evidence that this is translating into mobilization of private finance for adaptation on the ground. At the same time, there are concerns that some private-sector activities may be increasing rather than decreasing people’s vulnerability to climate change. Thus, it is important to take stock of what role is envisaged for private finance, and how this might be activated in Rwanda.
The event aimed to present research on the topic of climate change adaptation private sector finance; create an open dialogue with key stakeholders working with these issues in Rwanda; provide policy recommendations for the public sector; and discuss investment opportunities and ways to mobilize private-sector resources for climate change adaptation. It invited discussion from participants about how the private sector might be incentivised in Rwanda to mobilise new finance for investments that help prepare the country for climate impacts.
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Mobilizing private finance: Unlocking the potential of Rwanda’s businesses to drive climate change adaptation
Pauw, Pieter / Adis Dzebo (2016)
Stockholm Environment Institute Policy Brief
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Pauw, Pieter / Adis Dzebo (2016)
Briefing Paper 22/2016