RSE and its stakeholders officially welcomed the listing of the Prime Energy Green Bond
Prime Energy Green Bond has been on the Rwanda Stock Exchange (RSE) becoming the third local company to start trading on the market that has collectively posted a combined over Rwf51billion from Small and medium-sized enterprises (SME).
This first green bond in Rwanda was listed on the local burse this November 5, 2024 following an over subscription that raised Rwf9.58 billion compared to the initial bond floating to the public-which targeted Rwf9.5 billion with a single share worth Rwf100million.
This bond was issued in two tranches with a seven-year tenor. The Rwandan franc tranche priced at 13.75%, and the USD ($) tranche with a coupon rate of 9.5%.
RSE officially welcomed the listing of the Prime Energy Green Bond with stock bells ringing (opening and closing bids) from several brokers including Bank of Kigali (BK) Capital- that played a major role in managing the approval and certification of the bond- such as International Capital Market Association (ICMA) Green, Social and Sustainability Bond Principles.
Mutesi Rusagara, Minister of State in charge of Public Investment and Resource mobilization, who officiated the bond listing ceremony, said that complying with these standards is complex but Prime Energy has taken a bold step to pioneer Rwanda’s first green bond market.
Mutesi Rusagara
“You could have chosen to seek traditional financing but you chose to be bold. The first bold choice was a corporate bond issuance – capital market issuances are not easy. They require a number of processes and activities that traditional financing does not require and this often deters companies,” Rusagara said.
Prime Energy, a renewable energy power producer in Rwanda, said that the purpose of the bond is to inject more funds in a new hydro project plant and financing the maintenance of four existing plants.
Cherno Gaye, Chairman – Prime Energy Plc said that this journey that started three years ago was aimed at raising necessary financing to expand their renewable energy production especially that the company has 25-year power concession and purchasing agreement with Government of Rwanda and Energy Utility Corporation Limited (EUCL) respectively.
Cherno Gaye
“We knew there were many financing options out there, but we decided to go the green financing way because we are convinced that environment, sustainability and governance are critical pillars that will guide us for the foreseeable future,” Gaye said.
Gaye noted that the amount raised will enable the company to scale, and in particular, the proceeds will be invested in a greenfield project as stipulated in their Green Finance Framework.
Pierre Celestin Rwabukumba, CEO – RSE said that the listing of Rwanda’s first green bond is memorable for the country as it highlights the company’s and Rwanda’s commitment to growth and development in capital markets.
Pierre Celestin Rwabukumba
Rwabukumba stated that it is genuinely thrilling to see highly ambitious and rapidly growing companies like Prime Energy, take the place on Rwanda stock exchange market, which signifies growth and demystification of the way stock markets have been perceived as a place to big companies.
“This success not only showcases the potential of SMEs in Rwanda but also serves as an excellent demonstration of how the capital market ecosystem can act as a sustainable source of funding,” Rwabukumba said.
Rwabukumba revealed that for the past three months, RSE has seen three local SMEs listed on the stock markets (Mahwi Grain Millers Corporate Bond, BRD Sustainability Linked Bond and Prime Green Bond) which together have pooled a combined over Rwf51billions.
Grace Kibuthu Ogola, the Operations Officer, Capital Markets at International Finance Corporation (IFC) commended Rwanda for the progress made and recommitment IFCs support to see more growth.
Grace Kibuthu Ogola
What Does This Mean Financially:
The development of the capital market is essential for mobilizing resources that can drive industry, support infrastructure projects, and contribute to job creation and by connecting investors with entrepreneurs, this can foster a more dynamic and sustainable economy.
Engineers including women technicians who make things happen at Mukungwa II power plant, one of the Prime Energy power plants in Musanze
The listing of this green bond on RSE (as a secondary market) means that Rwandans and foreigners can, through stock and bond brokers, start buying shares on daily basis to raise capital for themselves and for the issuer who plans to construct a new hydro plant (Rukarara VI hydro project) which is under construction with a production capacity of 9.7 megawatts.
This also means that the more electricity (renewable) Prime Energy makes and sells, the more its bond shareholders will earn, and this could be for a long time, especially the demand for electricity is high in Rwanda today and the government plans to reach 100% access by 2029, from the current 80%.
Stock brokers make their bids on Prime Energy Green Bond
Female broker agents
Siongo Kisoso (right), the BK Capital Managing Director was also present
Philippe Watrin (left), the RSSB Chief Investment Officer has eyes on the bond
Dr. James Ndahiro (right), the Chairman of the Board of Directors of Zigama CSS bank attended the ceremony
Stock brokers and client’s representative (seated) were ready to start selling the new bond
