Rwanda’s Business Development Fund (BDF), in partnership with the Rwanda Green Fund (FONERWA), UN Environment’s United for Efficiency initiative and the Basel Agency for Sustainable Energy (BASE), has launched the “Coolease’” financial mechanism to promote adoption of energy efficient and climate friendly cooling solutions in Rwanda. The Coolease scheme, one of the first of its kind in Africa, enables suppliers and consumers of air conditioning and refrigeration products to transition to the latest technology without an upfront investment. This groundbreaking financial scheme has been developed through the Rwanda Cooling Initiative (R-COOL) and is in line with the Kigali Amendment to the Montreal Protocol, which requires all nations to phasedown refrigerants that are potent greenhouse gases.
The Coolease financial mechanism aims to overcome the challenges of the high costs and high-risk perception of energy-efficient products, competition with substandard and cheap equipment and the lack of accessible financing for the latest cooling technologies. It will also facilitate the creation of a pipeline to advance energy efficiency in Rwanda, open access to new markets for BDF and FONERWA, and attract international funding to capitalise on a new Green Growth Guarantee Fund.
How Coolease Works
Adopting more efficient cooling solutions saves electricity—making businesses more competitive, reducing strain on the electricity grid, mitigating air pollution and climate emissions, and preserving precious resources.
Coolease is provided by a financial institution to the client (typically an enterprise) through a finance leasing agreement, in which the air conditioning or refrigeration system is used as collateral. A dedicated leasing subsidiary is being set up by BDF to serve as a Special Purpose Vehicle to finance the cooling system for the client in exchange for monthly payments. The technology provider installs the equipment and commits to providing high-quality maintenance, which is embedded into the Coolease agreement. A positive list describes which technologies are eligible for the programme, considering both efficiency and refrigerant type. A Green Growth Guarantee Fund set up by BDF and FONERWA will cover part of the loss in case of default.