CONTEXT

Countries in the East African Community (EAC) are experiencing significant economic and population growth, which is driving ever-greater demand for refrigerators and air conditioners in the residential sector. Cooling products are essential for the health, well-being, and competitiveness of these economies, but they pose critical challenges in terms of energy consumption and impacts on the environment. Outdated products consume two to three times the amount of energy as efficient options available today, and they often contain refrigerant gasses that are harmful to the planet.

Lack of information on product performance, inadequate policies, higher purchase prices, and a difficult access to financing often prohibit adoption of energy-efficient and climate-friendly models. Despite the economic benefits of adopting energy efficient cooling systems in the residential, these investments are not happening at the expected scale.

ECOFRIDGES INITIATIVE

BASE is working alongside UN Environment’s United for Efficiency (U4E) initiative and partnering with the Government of Rwanda, East African Centre of Excellence for Renewable Energy and Efficiency (EACREEE), Rwanda Energy Group (REG), Energy Utility Corporation Limited (EUCL), the Development Bank of Rwanda (BRD) to conduct the “Rwanda Cooling Finance Initiative” (RCOOLFI), prepared as part of the second phase of the Rwanda Cooling initiative (R-COOL).

RCOOLFI aims to enable the conditions required to mobilize investments in new energy-efficient and climate-friendly cooling technologies in the residential sector and light commercial sector, and motivate households to replace and upgrade their inefficient systems, was launched in early 2019.

RCOOLFI aims to unlock USD 4 million in potential financing to support the purchase of 12,500 energy-efficient and climate-friendly cooling products to replace used but operational equipment in the residential sector in Rwanda by 2024. RCOOLFI includes complementary components, notably the proper disposal of used appliances, product testing, monitoring and verification, policy considerations, and awareness campaigns.

MODEL

RCOOLFI On-bill financing overcomes key barriers that are the burden of upfront investment and the need for collaterals and thus reduces the need for stringent credit assessment and collaterals. A simple review of bill payment history, income and other basic information is used to determine eligibility for financing. A financial tracking tool is used to follow repayment progress and program operations to assure the viability of the mechanism over time.

RCOOLFI On-bill financing is a one-stop solution for the EUCL’s electricity utility residential customers, connecting with partner local financial institutions and vendors who are both acting as facilitators, doing the initial processing of the customer information and application, aligned with RCOOLFI eligibility criteria and requirements. RCOOLFI facilitates the creation of a pipeline for energy efficiency investment, improves the monitoring and reporting of green loans and sales of energy efficient cooling products, significantly ease access to energy efficient cooling, tackles the issues of collection and disposal of used products, open access to new green markets for partners, and thus will possibly attract international funding to scale up the financial mechanism.