Rwanda based hydropower independent power producer, Prime Energy Plc, has received approval from the Capital Market Authority (CMA) to issue the first-ever green bond in the East African country. The green bond has a seven-year tenor and will have a value of Rwf9.5 billion (US$7.4 million).
The green bond by Prime Energy is supported by the International Finance Corporation (IFC) and will be listed and traded on the Rwanda Stock Exchange (RSE). The bond will be open to the public for trading on the 18th of March and close on 5th of April 2024.
A Green Bond is a debt instrument typically used to mobilise finance for projects that have a positive environmental impact such as renewable energy and green buildings.
Prime Energy will use the funds raised through bond to finance the 10MW run-of-river Rukarara VI Project. Subsequently, proceeds from the bond will also fund maintenance of Prime Energy’s existing plants in Rwanda.
Sandy Rusera, the CEO of Prime Energy said this move allows the company with alternative options of financing through capital markets and accelerates their footprints in providing clean power in Rwanda.
“We’re excited to use this type of instrument to increase our hydropower capacity and explore new opportunities to bring sustainable energy to more communities,” said Sandy Rusera, the CEO of Prime Energy.
Prime Energy operates four hydro-power plants located in the Western, Southern and Northern Provinces of Rwanda with 25-year concession agreements with the Government of Rwanda and power purchase agreements (PPAs) with Energy Utility Corporation Limited (EUCL).
The Prime Energy green bond comes at a time when the Rwandan bourse welcomed another Rwf30 billion Sustainability-Linked Bond (SLB) rolled on the RSE in October 2023, by the Development Bank of Rwanda (BRD) to attract more investments to spur development projects in sustainable environment, SMES financing and affordable housing mortgages.