1. Fully Channeling Environmental Fees and Fines through FONERWA
In Rwanda, all environmental fees, fines, penalties and licenses are channeled to FONERWA, the national green fund, with a vision to re-invest such stream of funds into environmental and climate activities in the country. However, since 2012, the total environmental fees, fines, penalties, and licenses accumulated in FONERWA was US$ 1.4 million, which is a mere 3.4% of total fund revenue, and presented important annual fluctuation. A study during BIOFIN I revealed some critical bottlenecks of both fees and fine collections.
Fines are collected by local government but with large ‘leakages’ before reaching the FONERWA bank account. Fees are more traceable yet sometimes not collected as stipulated in law, leading to recent law amendments in water tariffs and EIA fees. On the other hand, while biodiversity and ecosystem is one of the priority investment areas, the current fund structure does not differentiate funding source at the investment stage in FONERWA, therefore biodiversity related fees and fines are not necessarily reinvested into related communities or ecosystems. In this light, incentives, behavioral change and policy / legal or institutional strengthening need to happen in a coordinated manner in order to drastically improve the situation and collect $18.3 million over the next 10 years, while safeguarding the negative incentives of both fees and fines.
Therefore, through BIOFIN II Project, Rwanda Environment Management Authority (REMA) through BIOFIN II Project has conducted consultations at district level and raised awareness on biodiversity/environmental regulations at national level with training of mining concession owners, television and radio shows, publication of article in Newspaper and with a documentary film to increase the % of actually collected environmental fees and fines and re-invest the funds into biodiversity and ecosystem restoration.
2. Mainstreaming biodiversity in the EIA processes
Since 2005, the Environment Impact Assessment (EIA) is mandatory in Rwanda for project developers and implementers. This is underscored in the Organic Law N° 04/2005 of 08/04/2005. The Rwanda Development Board (RDB) is in charge of EIA enforcement during its project approval process. As EIA is mandatory to apply and receive bank loans for investment projects, companies undertake EIA studies. However, the biodiversity considerations are not explicitly taken into account, and the quality of EIA reports is questionable at times. In the same regards, that consideration is missing in the current EIA guidelines “General Guidelines and Procedures for Environmental Impact Assessment” issued by REMA in 2006. The guidelines provide only thorough procedures and steps. They can be strengthened with more specific guidance on assessing, mitigating and offsetting impacts on biodiversity (or ecosystems).
Since EIA has been in the country for over 10 years, there are some experienced firms and practitioners in the country (grouped under the Rwanda Association of Professional Environment Practitioners which is a new association), as well as institutional capacity within RDB. Mainstreaming biodiversity into their daily work can have immediate impacts on the direction of investment decisions both large and small. The EIA is stipulated in the Law N°48/2018 of 13/08/2018 on Environment in article No30. Ministerial Order No 001/2019 of 15/04/2019 establishes the type of projects that must undergo Environmental Impact Assessment, instructions, requirements and procedures to conduct Environmental Impact Assessment.
In order to avoid future biodiversity expenditures/loss and realign development investments with biodiversity conservation and restoration efforts by mainstreaming biodiversity concerns into the national EIA system, through BIOFIN II Project, biodiversity aspects has been integrated into existing General EIA guidelines and 11 sectoral guidelines respectively for road construction project, housing project, agro-processing project, slaughterhouse project, tannery project, mining project, petrol and oil stations project, hydropower project, waste management project, water resources management project and wetlands management project. And also the capacity of ninety (90) actors has been strengthened in development and implementation of Biodiversity Inclusive EIA Guidelines through trainings.
3. Establishing a Biodiversity and Ecosystems Facility in FONERWA
While a conservation trust fund has been a potential finance solution that repeatedly came up during stakeholder’s engagement, a general consensus was that Rwanda should not duplicate the efforts of an already well-established green fund, FONERWA. Instead the agreed direction was to create a biodiversity conservation facility within FONERWA.
Since its establishment in 2012, FONERWA has mobilized over 64 billion RWF from both domestic resources and a number of bilateral and multilateral donors as well as vertical funds. As revolving and sinking fund, FONERWA is a demand-based with a schedule to conduct bi-annual calls for proposals around four broad funding windows and entry-points and it works both as sinking and revolving fund: Conservation and sustainable management of natural resources; Research & Development and Technology Transfer and Implementation; Environment and Climate Change Mainstreaming and Environmental Impact Assessment Monitoring and Enforcement.
As of June 2017, the FONERWA portfolio includes 32 projects implemented by a mix of government agencies (78 percent of disbursements), private companies (16 percent of disbursements), and NGO/CSOs (6 percent of disbursements). Projects range in size from 30 million RWF to 3.7 billion RWF. Demonstrable benefits for biodiversity conservation include; 19,642 Area (ha) of land secured against erosion, 42,016 Area (ha) forest and agro forest coverage, avert deforestation and restoration of 21,145 hectares of watersheds and water bodies.
Biodiversity is part of the conservation and sustainable management of natural resources broad category, yet projects sometimes do not strictly connect with conservation efforts. Also, with the current grant scheme, communities and smaller scale projects face challenges to access the fund, which could be a bottleneck for some conservation projects.
In the framework of establishment of a ‘biodiversity facility’ within FONERWA, which will be a revolving fund with earmarked revenue from environmental fees and fines as well as a tool to attract other sources of fund, a proposal has been developed including business case and operational manuals.