In October 2023, the Development Bank of Rwanda (BRD) issued a Rwf30 billion Sustainability Linked Bond. The bond was praised, globally, as an innovative financing instrument to support Rwanda’s Sustainable Development Goals. BRD is using Rwf15 billion out of the Rwf30 billion bond proceeds to provide affordable loans to City of Kigali bus operators.

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Creating sustainable and liveable cities by empowering the private sector to invest in ease of mobility and efficient transport is at the heart of BRD’s current strategy to achieve its development mandate.

The Government of Rwanda purchased 200 buses to improve public transport in Kigali as part of implementation of the 2023 Umushyikirano’s resolutions. These buses will be run by several private bus operators who will benefit from a BRD loan to purchase at least 120 of these buses from the Government of Rwanda to directly improve service delivery for Kigali’s residents.

Through this initiative, BRD is actively supporting the transport sector with flexible and tailor-made financing solutions to provide long-term and affordable asset backed finance to private bus operators. It is in this context that the Bank signed financing agreements with five Kigali transport operators.

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This innovative financing arrangement leverages the Bank’s in-house expertise, its access to affordable finance and its partnership with BDF to access its partial credit guarantee. Through this win-win financing, RITCO, Remera Transport Cooperative, City Center Transport Cooperative, Nyabugogo Transport Cooperative, and Jali, will be able to access a local currency (Rwf) credit line at a preferential interest rate of 12% per annum for a maturity period of 5 years.

According to official statistics, Kigali needs over 300 buses to meet the ever-increasing demand for the public transport sector and BRD stands ready to finance over 70% of the transport sector fleet supply. This will enable bus operators to significantly expand their operations thereby solving, partly, Kigali’s public transport development challenge.

This marks the first sector to benefit directly from BRD’s successful inaugural Sustainability Linked Bond issued and listed on the Rwanda Stock Exchange. This bond was hailed as a first of its kind, globally, and the first in East Africa.

The Development Bank of Rwanda has positioned itself to be an innovative and sustainable provider of long-term development finance for social-economic impact in Rwanda.