Rwanda

Under President Paul Kagames leadership, Rwanda has been committed to low-carbon growth for more than a decade with Vision 2050 setting out the countrys overarching ambition of becoming a middle-income economy by 2035 and a developed, climate-resilient, low-carbon economy by 2050.

During 2011, Rwanda released its forward-looking Green Growth and Climate Resilience Strategy 2011-2050 (GGCRS) setting out 14 specific programmes of action for low-carbon development (spanning green technology, resource-efficient industry, diversification of energy sources and low-carbon energy grid development). However, the Ministry of Environment pulled the plug on the strategy after a 2018 lessons-learned evaluation proved it superficial and difficult to implement leaving Rwanda without an overarching green economy plan at present. Anticipated improvements to the revised GGCRS (yet to be published) include robust targets, alignment to more recent national policies, realistic and targeted implementation plans and detailed costings for green initiatives.

In the meantime, Rwandas updated NDC, which includes an unconditional emissions reduction target of 16% against the business as usual scenario by 2030, National Environment and Climate Change Policy and the National Strategy for Transformation 2017-2024 (NST) provide some overarching policy direction. The NST, under its third pillar on economic transformation, sets a priority for a green economy approach to the countrys management of natural resources and identifies climate change as an area of policy concern though falls short of setting out specific interventions.

Of 146 countries included in WEFs Global Gender Gap Report, Rwanda ranks an impressive 6th, having closed more than 80% of its gender gap and reached gender parity at ministerial and parliamentary levels. Rwanda's constitution has enshrined principles of gender equality and women's rights, including adopting a 30% mandatory minimum proportion of women in all decision-making bodies. As part of a five-year strategic plan (2017-2022), the countrys dedicated Gender Monitoring Office has been working with the private sector to establish gender accountability systems and develop a new Gender Equity Seal certification scheme.

However, entry-points for public and private sector engagement in governance remain limited, with labour law only going as far as supporting employee representatives and collective bargaining. Opportunities for public policy consultation are limited to thematic multi-stakeholder platforms and the district level Joint Action Development Forums, though these generally seek engagement with policy implementation and are not designed to influence the policymaking process.

Rwandas Ministry of Finance and Economic Planning has produced an SDG Guide and SDG Metadata Handbook providing definitions and outlining a national reporting methodology, and the National Institute of Statistics launched an open-access online SDGs portal for disseminating SDG indicator data. While these can be used by businesses, they are not specifically aimed at them. Elsewhere, the 2019 Voluntary National Review states that Rwanda is committed to fostering greater SDG ownership and awareness at all levels, but does not outline any specific support for businesses to engage with the SDGs.

Rwanda has published natural capital accounts in place for land, water, ecosystems and mineral resources. Although these accounts inform policy developments, there are no proposals as yet to integrate these within a wealth accounting framework.

In 2018, the country released an overarching financial sector development strategy which focused on inclusiveness and access to finance, but did not include any specific sustainable finance initiatives.

More recently, the Kigali International Financial Centre in partnership with the government and UNDP launched a Sustainable Finance Roadmap 2022-2029 with the twin pillars of greening the financial system and scaling sustainable finance aiming to establish Rwanda as a leading center for sustainable finance in Africa. Key strategic initiatives include transitioning to sustainable lending, developing sustainable debt capital markets and a sustainable insurance sector, enhancing financial sector ESG risk management and improving corporate ESG disclosure and reporting. The roadmap sets out a robust and detailed list of actions which, up to 2025, include the launch of a national sustainable finance taxonomy, a framework for a green stock exchange, the development of an insurance sustainability risk framework, and adoption of best practice ESG disclosure, among others. Rwanda is also piloting a digital tool for banks to green rate SMEs according to the emissions-metrics of businesses they support. The tool could allow banks to assess the greenness of their current portfolio and make future lending decisions on the basis of the green credentials of SMEs seeking investment.

Rwandas Green Growth and Resilience Strategy identifies finance as a key enabling pillar for implementation of its green growth agenda and sets a core priority to investigate and employ environmental fiscal reforms: taxes to make environmentally damaging behaviour more expensive, and tax exemptions and subsidies to make environmentally beneficial behaviour more attractive albeit without going so far as to outline specific actions or propose a wider review of government budgets, spending and monetary policy.

Similarly, the National Environment and Climate Change policy aims to revise public procurement guidelines to promote green technologies in procurement processes, and identify and implement fiscal, taxation and other policy options to reduce upfront costs of green technologies in priority areas but no plans or actions are set out.

In terms of liquidity risk, Rwanda has introduced the Basel III Liquidity coverage ratio which requires banks to hold liquid assets covering cash outflows for 30 days. It also runs a reverse liquidity stress test or deposit concentration test albeit conducted on an ad hoc basis. A government directive issued in 2018, required banks to develop and run their own stress testing exercises and report these to the central bank, though design and test frequency is determined by each institution. According to the Sustainable Finance Roadmap 2022-2029, the National Bank of Rwanda plans to develop national stress-testing and scenario analysis guidelines by the end of 2024.

No national tax or trading schemes in place for pricing carbon. Whilst Rwanda has committed to reaching net zero CO2 emissions by 2050, the country has yet to outline its long-term decarbonisation pathway and emissions reduction strategy.

The retracted Green Growth and Resilience Strategy simply pledged support for private sector carbon trading, capturing international finance through the Clean Development Mechanism and other voluntary carbon markets.

Rwandas approach to mainstreaming green growth into its sectoral policies and programmes was to do so within its Green Growth and Climate Resilience Strategy. When drafting the report, the government sought inputs from a number of different ministeries spanning all major sectors, in the hope of developing sector-specific programmes of work. The plan outlined a number of industry-wide initiatives covering the agriculture, waste, industrial, energy and mining sectors, with emphasis on improvements to resource recovery and reuse, energy efficiency and green technology albeit set within an overarching economic, rather than green or sustainable development framework. However, the Ministry of Environment has since retracted the report, after a 2018 evaluation noted severe implementation challenges, as well as difficulties aligning it with other development plans such as the National Transformation Strategy.

One of the policy actions included in Rwanda's National Environment and Climate Change Policy was to promote and support local industries and SMEs to adopt environmentally-sound technologies through applying appropriate incentives and disincentives but no specific initiatives were outlined. Rwandas national green investment fund FONERWA (which mobilises domestic and international finance) provides both a credit line and innovation grant for private sector-led initiatives which respond to environment and climate change related challenges. However finance is distributed on an open calls basis and does not specifically target small businesses, nor aim to catalyse the transition to green business practice.

Rwanda does not have a carbon budget in place, nor is there evidence of any discussion regarding carbon budget proposals.

While Rwanda has committed to net zero CO2 emissions by 2050, the government has not yet developed a long-term strategy setting out its Paris Agreement-compatible decarbonisation pathway or enshrined climate targets in law. Soft targets in Rwanda's latest NDC commit to an unconditional reduction target of 16% and conditional reduction target up to 22% of the business as usual scenario by 2030, totalling a 38% reduction.

Rwanda Vision 2050 declares that there will be continued emphasis on clean energy as a source of generation, with at least 60% of installed capacity falling in this category. The Environment and Climate Change policy refers to promotion of renewable energy in the context of climate change mitigation and the Green Growth Strategy includes promotion of geothermal power generation and a pledge to reach reach 700 MW. Additional support is also proposed for small-scale energy installations in rural areas, establishing renewable energy feed-in-tariffs, developing green public-private partnerships to encourage private investment.

While developing its green growth agenda Rwanda chose to focus on and prioritise support for local entrepreneurship and inclusion. The Voluntary National Review established some new programs targeting young adults and women, including the National Employment Program, but this expired in 2019.

The National Strategy for Transformation 2017-2024, under its Economic Transformation Pillar, includes the priority of creating 1.5 million decent and productive jobs for economic development, though it does not specify green jobs explicitly.

Despite limited acknowledgment of green jobs in planning, the government established a national green financing mechanism known as FONERWA, transforming it from a project into a public institution by statute. The investment fund is the largest of its kind in Africa and has mobilised more than USD$250 million in international and domestic finance for climate change adaptation/resilience and mitigation projects. Since its inception in 2012, the government estimates that the fund has created more than 137,000 green jobs.

While Rwanda has been strengthening social protection in recent years, it is yet to adopt a green and integrated approach to pro-poor policy. For example, the National Strategy for Transformation aims to improve and scale up its pro-poor and social protection programs, including the One Cow per Poor Family program but does not combine these with any particular green approach.

Rwandas Expanded Public Works initiative (which supports female-headed and labour-constrained households with young children obtain stable employment) does prioritise the most climate-vulnerable regions in selecting areas of focus for the scheme, but does not integrate climate resilience into the scheme itself.

The Green Growth and Climate Resilience Strategy 2011-2050 aims to increase the social benefit fund derived from Payment for Ecosystem Services schemes in Rwandas protected areas to 5% of ecotourism revenues, and ensure greater distribution to the poorest families.

Rwandas National Strategy for Transformation, under its Social Transformation Pillar, includes the priority to increase citizen participation by creating decentralised mechanisms for consultation of women and youth at the district planning level, though specific actions and proposals are unclear. The Rwanda Governance Board, as part of a 10-year accountable governance project, is in the process of working with the government to strengthen citizens access to information, open up political space for citizen engagement and develop a mechanism to collect public feedback on government performance but formal policy consultation processes are not currently in place.

Existing entry-points for engagement are limited to thematic multi-stakeholder platforms such as the Rwandan High-Level Dialogue on Green Growth (which consults representatives of the government, the private sector, CSOs and academia) or district level consultations such as the Joint Action Development Forums. However, these seek engagement around policy implementation and are not designed to influence the policymaking process. No evidence of any impact assessments.

Rwandas social protection policies have progressed significantly over the last decade, moving from humanitarian assistance and a focus on extreme poverty to meeting strategic social challenges with emphasis on prosperity and wellbeing for all. Rwandas Social Protection Policy and Strategic Plan 2019-2024 focuses on inclusivity, responding to the National Constitutions call to tackle different forms of vulnerabilty including disability, old age and survivors of genocide. Despite this broadening approach, the plan largely continues and expands existing schemes such as the Ubudehe community development programme and the Minimum Package for Graduation sustainable livelihoods initiative. Coverage of the flagship Vision 2020 Umurenge programme (which provides direct financial assistance) is also expanded to include all extremely poor households, and newly extended to those living with severe disabilities.

While innovative policy pilots are lacking at this stage, the plan re-affirms Rwandas long term goal of providing universal access to social protection, to be pursued incrementally through expanding its programme of direct support post-2021 alongside ongoing research to "gather evidence towards a more universal approach.

The Ministry of Environments revised National Environment and Climate Change Strategy (2019-2024) states Rwandas environmental policy objectives for the next five years as greening the economic transformation, enhancing natural ecosystems, strengthening early warning systems, promoting climate adaptation, mitigation and response, improving environmental wellbeing, strengthening governance, and promoting green foreign and domestic investment. While the report outlines specific policy actions under each of these objectives and includes a loose implementation plan, the actions read as general commitments (e.g. to improve or further develop) and are not explicitly aligned to SDG targets though the report states it has been prepared in the context of the SDG framework.

More recently, Rwandas Environmental Management Authority (the government institution responsible for environmental management and conservation) published its five year strategic plan, setting out four priority areas of work spanning ecosystem restoration, climate change, education and environmental mainstreaming. While the plan is embedded in a tighter logical framework which adopts some measurable indicators, it does not set specific targets, and finance mobilisation remains uncertain.

Rwanda joined the Wealth Accounting and the Valuation of Ecosystem Services (WAVES) partnership in 2013, commencing work to develop natural capital accounts aligned to the UN Statistics Divisions System of Environmental Economic Accounting. Between 2015-2018 Rwanda successfully established initial accounts for land, water and mineral resource flows. A further ecosystems account was added in 2019. While accounts reports have been published, there doesn't appear to be a forward looking strategy detailing planned future initiatives - so it remains unclear whether the development of more comprehensive accounts is in the pipeline.

The Rwanda Natural Resources Authority and the Rwanda Environmental Management Authority under the Ministry of Natural Resources, together with the Ministry of Finance and Economic Planning are the WAVES lead government agencies on natural capital. Rwanda does have a steering committee made up of representatives from several ministries (including the Ministry of Natural Resources, Ministry of Finance and Economic Planning, among others) the National Institute of Statistics and the Rwanda Environment Management Agency however the committee functions as a cross-government platform rather than an independent expert advisory body.

The now-expired Green Growth and Climate Resilience Strategy included a programme to improve vehicle efficiency, fuel quality regulations and taxation policies, but did not put forward any proposals for nature-based fiscal reform. The National Environment and Climate Change Policy does not mention any relevant initiatives.