Rwanda’s capital markets diversify with first-ever green bonds
The Rwandan Capital Markets Authority has granted approval for the issuance of pioneering green bonds by Prime Energy Plc to mark the diversification of the country’s capital markets.
The approval, announced in a statement, aims to diversify asset classes and advance the development of Rwanda's capital market infrastructure, the East African reports.
CEO of the Rwanda Capital Markets Authority, Eric Bundugu, expressed satisfaction with the milestone, emphasising its role in supporting Rwanda's commitment to sustainable financial development.
"This approval marks a significant milestone for Rwanda's capital markets. The issuance of Prime Energy's green bond not only diversifies asset classes but also underscores Rwanda's dedication to fostering sustainable finance practices," said Bundugu.
Scheduled to open on March 18 and close on April 5, the bond issuance will offer investors an opportunity to engage with environmentally responsible investment opportunities while contributing to the expansion of Rwanda's renewable energy sector.
Prime Energy's green bond, aiming to raise Rwf9.5 billion ($7.31 million), will span a seven-year term. The proceeds generated from the bond issuance will be allocated towards financing a new project and bolstering the maintenance of existing energy infrastructure, particularly hydropower plants.
"Securing approval for Rwanda's first-ever green bond is a momentous achievement for Prime Energy and the broader capital markets landscape. The proceeds will enable us to enhance our hydropower capacity and extend the reach of sustainable energy solutions to more communities," Sandy Rusera, CEO of Prime Energy, said while emphasising the potential to unlock other alternative avenues for financing through capital markets.
The East African reports that a collaboration between Prime Energy and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, played a pivotal role in structuring the green bond and identifying potential investors.
A green bond, also called a climate bond, is a form of debt security issued by an entity with the intention of funding or refinancing initiatives that have a beneficial impact on the environment and or climate.
