Rwanda has signed a $162.4 million (about Rwf130.7 billion) loan agreement with the African Development Bank (AfDB) and Japan International Cooperation Agency (JICA) for the rehabilitation of two key roads; one connecting Rwanda to Uganda, and another one linking the country with Tanzania.

The repair of the 208km road consists of the 116km Kagitumba-Kayonza road section along the Northern Corridor and links Rwanda and Uganda at Mirama Hills in Kagitumba, Kayonza District, Amb Claver Gatete, the minister for Finance and Economic Planning, said yesterday. The facility will also fund works for the Kayonza-Rusumo section (92km) linking to Tanzania through the Central Corridor.

The overall project, which also covers some road works in Uganda and Burundi, will cost $376.5 million. The Rwanda side of the project is expected to cost over $137.5 million to be co-financed by AfDB and JICA. AfDB will contribute $94 million and JICA will add $68.4 million of the credit facility. The loans will be repaid over a period of 40 years, with 10 years of grace period, according to Gatete.

The Minister said a grant of $22 million from the European Union will also be used to support the project.  "These roads are vital links, which support the regional integration objectives of the East Africa Community and the Great Lakes region, contributing to poverty reduction and regional integration efforts.”

"The project will foster regional trade, help reduce cost of transport, as well as increase economic empowerment of women, and improved performance of transport sector institutions,” Gatete noted.

JICA chief representative Takada Hiroyuki said supporting repairs and widening of the Kayonza-Rusumo road is economically strategic "as it will reduce the cost of transport and stimulate economic growth for Rwanda and the region, generally”.

"As a landlocked country, the only means of overland transportation in Rwanda is roads, either by using the Northern Corridor through Uganda to Kenya’s Mombasa port, or the Central Corridor to Dar es Salaam to access foreign markets,” Hiroyuki said.

Hiroyuki added that this is the first official development assistance yen-based loan deal to be concluded between Japan and Rwanda in 27 years.

The new Japanese ambassador to Rwanda, Miyashita Takayuki, noted that it is important to support the transport sector, and reaffirmed the Japanese government commitment toward supporting Rwanda’s economic sustainability.

He said the economic transformation of Rwanda will be facilitated by increasing the internal and external connectivity of Rwanda’s economy.

RTDA tasked to observe time

Meanwhile, Negatu Makonnen, the AfDB country representative, tasked the Rwanda Transport Development Agency (RTDA), the implementing agency, to ensure the project is executed and completed as per agreement. Works on the two roads are expected to start in November and will be completed in September 2019.