Scoping Report on Resource Mobilisation for Environmental Mainstreaming

Summary:

This report was commissioned by Agri-TAF to improve the team’s understanding of the availability of and modalities of accessing external sources of finance for mainstreaming environment and climate change into agriculture development in Rwanda. With a number of major investment programmes drawing to a close, the Ministry is keen to identify and tap into new sources of financial support. Of particular interest are the international climate funds which provide significant amounts of funding for mitigation and adaptation projects. Rwanda’s agriculture is well positioned to access these funds on both fronts as it is currently the largest emitting sector and because farmers are highly vulnerable to climate change due to their high dependence on rain-fed agriculture and other factors that limit their adaptive capacity such as the prevalence of rural poverty and land degradation.

Rwanda is eligible to receive funding from most of the climate funds due to its Least Developed Country (LDC) status. However, the most relevant fund to promote mainstreaming of environment and climate change concerns (as well as gender and nutrition considerations) into agricultural development in Rwanda is the Green Climate Fund (GCF). MINIRENA has been accredited as a national entity for the GCF (as well as the Adaptation Fund but Rwanda has reached the country cap so cannot access this fund at present) and this fund has direct financing modality so funds are disbursed directly through MINIRENA. The GoR is also pursuing enhanced direct access (EDA) status which will allow for accredited institutions to receive an allocation of GCF finance and then make their own decisions on how to program resources. Agriculture is likely to feature prominently in these plans. There are a number of pipeline GCF projects at various stages of development. The most advanced is an integrated projects planned for Gicumbi district which includes a tea resilience component. GCF has released preparatory funding of 1.5 million for a number of feasibility studies.

Rwanda has also been highly successful in accessing other international climate funds (including the USD 934.7 million Least Developed Countries Fund and the USD 3 billion Global Environment Facility), but MINAGRI’s engagement with these investments and plans has been quite limited so far despite these investments including significant agricultural components. Currently, the most significant and relevant of these is the Climate Investment Facility which has approved preparatory funding to develop a Strategic Plan for Climate Resilience (which includes climate smart agriculture) and an investment plan for a Forest Investment Programme (which includes agro-forestry). As there are currently no funds available in the CIF to finance the plans, financing these plans will ultimately depend on GCF funding. Hence as part of the preparatory process, the respective intermediary organisations, the World Bank and the African Development Bank are planning to develop two concept notes to seek funding the Green Climate Fund.