Home Business & TechMarkets Rwanda Capital Market Gets First Green Bond Listing

Rwanda Capital Market Gets First Green Bond Listing

by Daniel Sabiiti
2:40 pm


Mukungwa II power plant is one of the plants managed by Prime Energy Plc

Prime Energy Plc, a renewable energy independent power producer in Rwanda, has received approval from the Capital Market Authority (CMA) to issue the first-ever green bond that will be invested in energy projects in the country.

The approval was given a green light this March 2024, allowing the company to offer the bond to the public and listing on the Rwanda Stock Exchange (RSE).

The green bond has a face value of Rwf9.5 billion and a tenor of seven (7) years and its opening date is March 18th, 2024, while the closing offer is April 5th, 2024.

Once the offer closes, the green bond will be listed and traded on the local bourse (RSE) on April 26th, 2024.

The proceeds from the bond will go into investing in a new project, while the rest will finance the maintenance of existing plants owned and operated by Prime Energy in Rwanda.

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).

Artistic impression of Rukarara VI power plant

The bond was classified as a green bond because it aligns with the four core components of the updated International Capital Market Association (ICMA) Green, Social and Sustainability Bond Principles issued in June 2021 respectively.

“This transaction was supported by the International Finance Corporation (IFC), the private sector arm of the World Bank Group, which worked with Prime Energy to structure the green bond and identify potential investors,” a press statement released March 13th reads.

“IFC’s advisory support is part of a broader project which is helping to facilitate access to long-term local currency finance in Rwanda for key sectors,” the statement added.

Sandy Rusera, the Chief Executive Officer of Prime Energy said this bond marks a pivotal moment for Prime Energy and provides alternative options of financing in the energy sector through the Rwanda capital markets.

“The proceeds from this issuance will allow us to accelerate our mission – providing reliable, clean power.  We’re excited to use this type of instrument to increase our hydro-power capacity and explore new opportunities to bring sustainable energy to more communities,” Rusera said.

The Prime Energy green bond will offer investors the opportunity to align investments with the new global sustainable investment model- Environmental, Sustainability, and Governance (ESG), mitigate risks and access a new asset class for diversification.

Joe Nsano, Chief Operations Officer (CFO) at Prime Energy noted that this green bond issuance will be a significant financial achievement for the company in showcasing the strength of their business model and commitment to responsible growth.

“The proceeds will ensure long-term financial sustainability.  Furthermore, this innovative financing tool allows us to directly connect with investors who share our vision for a greener future. This is a win-win for both Prime Energy and for environmentally conscious investors,” Nsano said.

In 2015, Ministry of Infrastructure (MININFRA), Rwanda Development Board (RDB) and Rwanda Energy Group (REG) awarded Prime Energy Plc a 25-year concession to upgrade, operate and maintain four Hydro power power plants through a transparent and international tendering process.

With a combined installed capacity of 7.8 megawatts to date, and an anticipated green bond uptake, the investments are expected to enhance Rwanda’s targets to meet the 100% access to electricity for all Rwandans by end of 2024. Currently, Rwanda has managed to reach 74% of the set targets.

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.

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