Africa News Bulletin

Rwanda: Will new financing model help phase out climate-warming appliances?

Thousands of cooling appliances-comprising air conditioners and refrigerators-that are not eco-friendly and outdated could soon be phased out and be recycled following a ‘new financing mechanism to subsidize the cost’ to remove them from the market and use.

There has been a steady increase in refrigerators in the residential sector since 2012 with an estimated stock of 97,512 refrigerators owned by households in Rwanda as of 2020.

At least 64,000 refrigerators are classified as old consuming a lot of energy.

There are also over 50,000 air conditioners on the market but most of them are outdated and are not friendly to the environment studies, show.

According to Morris Kayitare, The leader of Rwanda Cooling Initiative, the new financing mechanism dubbed “Green On-Wage Financing mechanism” is expected to incentivize owners of the climate polluting cooling appliances to the take the equipment to e-waste recycling facility in Bugesera District and be facilitated to get new eco-friendly cooling appliance at 15 percent discount on the cost.

The program incentivizes households and micro-entrepreneurs to return end-of-life cooling equipment and acquire certified higher-efficiency cooling appliances in exchange through a dedicated take-back scheme in partnership with interested vendors and an e-waste management company.

In addition, salaried customers are able to acquire eligible equipment on special credit conditions and pay for it over time through deductions on their salaries at partner local financial institutions.

“Among other packages, a consumer can access loans to buy such eco-friendly cooling appliances without collateral. We are going to work with banks to help consumers be able to access loans to replace such old cooling appliances. The person can only prove a source of income,” he explained.

The new financing scheme, he noted, is aimed to help implement Kigali Amendment to the Montreal protocol adopted in 2016.

Under the Kigali Amendment, countries are committed to improving energy efficiency of cooling equipment and reducing the production and consumption of HFCs pollutants by more than 80 percent over the next 30 years.

Hydrofluorocarbons (HFCs) are said to be powerful climate-warming gases.

Rwanda aims to unlock $4 million in potential financing through a Green On-Wage Financing mechanism to support the purchase of 12,000 energy efficient and climate friendly cooling products to replace used but operational equipment in the residential sector in Rwanda by 2024.

This seeks to address the burden of upfront investment and the need for collaterals to access such equipment.

Energy saving

Kayitare said that replacing the cooling appliances with the clean ones could also save energy besides environmental protection.

Studies show that old fridges alone that are not friendly to the environment as they use up electricity worth approximately Rwf4 billion annually.

He said that within two years at least 10,000 old refrigerators should be removed from residential homes.

“We hope that over 200,000 new fridges and 4,000 air conditioners could be on the market in the next two years,” he said

The appliances-that require to be phased out have different effects such as deplete ozone layer which results in global warming.

If not phased out, the substances could also pose different effects risks which include food shortage as the radiations disrupts developmental and physiological processes that decrease the productivity of crops as well as loss of wildlife since ozone depletion lead to a loss of plant species and reduce global food supply.

The effects of ozone layer depletion on human beings include skin cancer, risk of cataract, weakened human immune systems, DNA damage and lung diseases as ultraviolet radiations disturb biomolecules such as lipids, proteins and nucleic acids.

Recycling outdated appliances

Olivier Mbera, The General Manager of EnviroServe-an E-waste handling facility in Bugesera district said that the facility is ready to receive outdated cooling appliances that have toxic chemicals for handling and recycling them.

“Those who will supply us old cooling appliances will benefit from a 15 percent discount on cost to buy new and eco-friendly appliances. We have machines to handle such toxic gases which old appliances contain,” he said.

Jeanne D’arc Mujawamariya, the Minister for Environment, said that the Green On-wage mechanism is also part of implementing the National Cooling Strategy adopted in 2019 to transform the market towards efficient cooling equipment.

“The mechanism seals the Government of Rwanda’s commitment to tackle one of the World’s crisis – the climate change – which threatens food security, health and economic wellbeing as well as the environment around us. We have a diverse range of projects to implement all the priority recommendations of the strategy,” she said.

The development of a financing scheme for energy-efficient and climate friendly cooling products will address the first-cost barrier and incentivize consumers to recycle outdated existing appliances, she noted.

She said cooling is complex and cuts across comfort, agriculture, health and industry sectors adding it needs to be addressed comprehensively and continuously.

“The Green On-Wage mechanism will give consumers access to financing which allows them to make a choice to buy a relatively more expensive but efficient cooling equipment, considering long term benefits, as the savings made on the energy bill will render the efficient equipment cheaper over time,” she said.

Cooling in post-harvest management

Mujawamariya said that avoiding upfront costs, and the ease of repayment will motivate investments in agriculture post-harvest management that may not otherwise happen.

“Through the mechanism, REMA has scrutinized the efficiency of the equipment eligible under the Green On-wage mechanism, which gives the consumers some confidence in the promised savings.

A Take-back scheme has been developed to ensure collection, transportation, treatment, and disposal of discarded appliances, increasing the incentives for consumers and co-benefits for society,” she said.

Beyond this mechanism, we will continue to support ambitious energy transition actions to help meet national development targets while fulfilling obligations under the Kigali Amendment to the Montreal Protocol and the Paris Climate Agreement, she added.

Original story on The New Times

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