Regional energy firm joins Kigali International Financial centre
Kigali International Finance Centre’s membership and participation is not limited to financial sector firms and operators as evidenced by the recent membership of Sawa Energy.
Sawa Energy is a regional firm enabling East African businesses to generate savings on their electricity bill by going solar with no upfront costs.
The firm’s business proposition involves bringing in international capital to provide financing for solar systems so that East African businesses can make the transition to cheaper, more reliable green energy without any risk.
The firm was set up in 2021 and has since completed installations at several hospitals, data centres, schools, commercial centres, and innovation hubs as well as the largest telecom provider in Rwanda. Sawa enables its clients to save on their energy bills and reduce greenhouse gas emissions.
Samuel Kaufman, the Sawa Energy Managing Director, said that the firm brings in international equity and debt to provide financing for solar systems so that Rwandan businesses can benefit from going solar without having any upfront costs. By structuring their holding company through KIFC, Kaufman said that they stand to experience, among other things, an optimal tax structure for its investors.
“This is particularly important considering we work with financiers from countries that don’t have double taxation treaties with Rwanda. KIFC enables us to create an efficient organisational structure to bring capital into Rwanda, provide value to our clients and generate returns for our intentional investors that have the intention of deploying significant pools of capital in the region,” he said.
The consideration to structure their holding company through KIFC was further motivated and incentivized by a lower Corporate Income Tax regime and elimination of the withholding tax.
“These elements enable us to operate with international financiers without having captive capital, or excessive double taxation,” Kaufman said.
The incentives in turn allow the firm to serve clients with energy savings without any out of pocket investment.
“Without KIFC, our capital would not flow efficiently, and as a result we would not be able to offer as much savings to our clients. This would significantly reduce our value proposition, and slow the spread of solar energy to Rwandan businesses,” he added.
“Within the tax and structuring aspect, we believe KIFC will continue to help us optimise our structure with respect to the investment code in order to make Rwanda an attractive hub for our fundraising and operations. On the business development side, we look forward to getting more KIFC support with introductions to potential clients and service providers in Rwanda and in other countries within the region,” he added.
With KIFC attracting investors and members, including African fintech leaders, financial services providers, corporate services providers, impact investors and angel investors, firms such as Sawa Energy could benefit from the networks and leverage on partnerships of fellow members. The network also has opportunities for connectedness, advocacy, and promotion.
Speaking on their experience during the process to structure the firm, the firm’s directors termed it a great experience and appreciated receiving support from Rwanda Finance Limited officials.
Commenting on the development, Lise Arakaza from Rwanda Finance Business Development team said that the firm is an important addition to the KIFC ecosystem increasing the capital being invested in renewable energy projects in Rwanda.
“The regulatory framework of the financial centre provided to European and American investors gives comfort to invest more in Rwanda. KIFC is supporting the real economy and institutions active in sustainable projects are welcome to develop their activities in Rwanda,” Arakaza said.
Rwanda Finance Limited leads efforts in the development of the incentives for the Kigali International Finance Centre, an initiative that seeks to position Rwanda as a preferred financial jurisdiction for investments into Africa, as well as reform the domestic financial sector.
KIFC continues to attract a number of investors and members ranging from social impact investors, Angel Investors, investment companies, financial services providers, and Corporate Services Providers among others.
Other members of the KIFC include; Bank of Kigali, Flutter Wave, Admaius Capital, JurisTax, Chancen International Rwanda, Chipper Cash, Aktif Bank, Matha Capital, Mettle Limited, BK Capital Limited, Q-lana, Ethos Attorneys and Consultants.
Others are; K-Solutions & Partners, Fountain Advocates, Liedekerke, NCBA Bank, Ecobank, CVL, Garnett Partners, Luma Holding, Inkomoko, Mobile Money, PanAfrican Finance Limited, RR Associates, and Co Advocates.
In 2021, the centre was ranked 5th in Africa on the Global Financial Centres Index (GFCI), a renowned ranking on the competitiveness of financial centres across the world, and mentioned among the top 15 centres globally likely to become more significant going forward as well as among centres enjoying reputational advantage.