Design and Scoping of Government of Rwanda’s Environment Fund (CDKN)

The Context

Rwanda is a small, landlocked country, with the highest population density in Africa. 90% of the population live in rural areas and are largely food-insecure. The genocide of 1994 led to the loss of one million lives and displaced 800,000 people, with devastating social and economic effect on the country. Rwanda is now pursuing rapid economic growth, aiming to transform from a subsistence economy to a knowledge-based economy by 2020.

Rwanda is severely vulnerable to climate change. This ‘land of a thousand hills’ suffers from high levels of soil erosion, which when combined with a reliance on rain-fed farming and a lack of modern technology, creates serious constraints to agricultural development. Climatic hazards including floods, dry spells and droughts pose a substantial and persistent threat to rural livelihoods and Rwanda, particularly for tea and coffee exports.

The Government of Rwanda is keenly aware of the economic risks and opportunities for sustainable socio-economic development presented by climate change. Rather than choose between environment or development, Rwanda is looking for ‘green growth’ solutions and a pathway to a carbon neutral economy, via its Green Growth and Climate Resilience Strategy.

In 2011 the Rwandan government invited interested organisations to submit proposals to design a national climate and environment finance mechanism. The Centre’s proposal was selected, and CIDT was tasked with recommending the optimal design and scope for an operational fund. This is how the national fund FONERWA – Fonds National de l’Environnement Rwanda – was born. The Government of Rwanda has become one of a few nations across the world who have developed a national climate change and environment fund.

What role does CIDT play?

In 2012 CDKN supported the six-month design phase, including the Terms of Reference for the Fund’s establishment and operation. The purpose of the fund is to ensure sustainable financing is accessible to support environmental sustainability, resilience to climate change and green growth.

In the first step of the work, the Centre designed the institutional, administrative and procedural elements of FONERWA in collaboration with the Government. The Centre developed a very practical operational manual to govern the management of the Fund. This specified legal status, governance, management and institutional requirements, safeguards, transparency, accountability and audit and reporting requirements. The Centre recognised that in the early stages, FONERWA needed to be tightly governed in order to build confidence with donors, investors and the international community.

Scenery in Rwanda

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