The “Enhance access to affordable and diversified financing through Payment Ecosystem Services (PES) and blended finance to promote sustainable forestry practices and accelerate the clean cooking transition in Rwanda” project is being implemented in the Rubavu and Rutsiro Districts of Rwanda’s Western Province.

The project aims to enhance access to affordable, innovative, and diversified financing that accelerates Rwanda’s clean-cooking transition while strengthening sustainable forestry value chains. More specifically, GGGI will explore, design, and pilot two innovative financing instruments: 1) a Blended Finance Instrument for Clean Cooking, and 2) a PES to diversify rural communities’ incomes and incentivise the adoption of sustainable forestry practices.

This action is carried out with the support of the Sustainable Forestry and Efficient Renewable Energy for Improved Livelihood (SFERE) project, funded by the Grand Duchy of Luxembourg and implemented by the Rwandan Ministry of Environment and the Luxembourg Development Agency (LuxDev).

The project aims to enhance access to affordable, innovative, and diversified financing that accelerates Rwanda’s clean-cooking transition while strengthening sustainable forestry value chains. This will be achieved through the following two key components:

Outcome 1: Design and establish a suitable blended finance instrument for scaling up production and distribution of clean cooking solutions.

Outcome 2: Design and pilot a PES scheme to support biomass producers (such as smallholder farmers and cooperatives, private forest management units, woodlot owners, etc.) to adopt sustainable forestry practices and reliably supply sustainable biomass.

Rwanda faces a dual challenge: accelerating its clean-cooking transition while safeguarding forest ecosystems that remain vital to both household energy supply and rural livelihoods.

Biomass, primarily firewood and charcoal, still accounts for more than 90% of national cooking energy consumption. This heavy reliance biomass for cooking has significant environmental and socio-economic consequences, including increased disaster risk in forest-dependent communities, lower agricultural productivity, food insecurity, and poor health outcomes, especially for women and girls who are primarily engaged in cooking.

While Rwanda’s policy direction for reducing biomass dependence is well defined, progress is constrained by modest, yet growing, private-sector participation, limited access to affordable finance, and the absence of tailored investment vehicles capable of translating policy ambition into bankable action.

Moreover, smallholder farmers and woodlot owners who play a crucial role in biomass production often lack the skills and resources necessary to implement sustainable forest and land management practices. There is a need to provide financial incentives to encourage their transition towards more sustainable forestry and land management practices. Tried-and-tested market-based instruments such as Payment for Ecosystem Services (PES) could encourage biomass producers to adopt more sustainable forestry practices, all while diversifying their incomes.

Impact: Strengthening the resilience of forest landscapes and dependent communities to climate change in selected districts in Western Province.

Outcome 1. Increase in the use of improved cookstoves and of sustainable biomass in urban and peri-urban areas.

Outcome 2. Increase and diversification of income, as well as better connection to value chains, among smallholder farmers in and around PFMUs.

Click here to download the project factsheet.

Disclaimer: The content in this document is the sole responsibility of  GGGI and can in no way be taken to reflect the views of the Grand Duchy of Luxembourg.