Infrastructure development is one of Rwanda’s agenda seen as a possible stronghold to move closer to vision 2020. The agricultural infrastructure of the country is quite “immature” and in need of financial breakthrough should it succeed. One of the forces they can induce is the green investment.
Green investment is associated with socially responsible investment with aim of going green. Green investment can include both direct and indirect investment for environmentally sustainable projects to achieve sustainable Infrastructure for agriculture.
One of the possible ways is financing through green bonds issuance. So, what is a Green Bond? A green bond is a tax-exempt bond issued by federally qualified organizations or by municipalities for the development of brownfield sites. Rwanda could generate funds through green investment and issue of green bonds for developing agricultural infrastructure.
Agriculture in Rwanda accounts for a third of Rwanda’s GDP; constitutes the main economic activity for the rural households (especially women) and remains their main source of income. This sector meets 90% of the national food requirements and in return generates more than 50% of the country’s export revenues.
In agriculture, there is lot of potential through development of sustainable agriculture projects, irrigation projects, land conservation and water management projects. Green bonds could be used as good alternative for financing such projects in Rwanda.
African Development bank issues green bonds for funding energy efficiency and renewable energy projects in Africa.
South Africa is one of the African countries using funds generated through green bonds to finance its renewable energy projects.
In Rwanda, National Bank of Rwanda and commercial banks through capital market could issue long term green bonds to develop agriculture infrastructure and renewable energy projects in agriculture as well. It will help in enhancing the country’s agriculture output, trade surplus as well as achieving concept of green economy.