The Government of Rwanda and the African Development Bank (AfDB) Thursday signed a loan agreement worth $30 million (approximately Rwf25 billion) to finance the establishment of Rwanda Innovation Fund (RIF).

The money will go towards equity financing for tech-enabled small and medium-size enterprises, train tech-oriented entrepreneurs in business planning and management, and increase awareness and sensitization with respect to intellectual property rights.

It will also help provide investment in and developing of world-class innovative businesses in Rwanda and the wider East African region by providing institutional growth capital and deep business support.

Speaking at the signing event, Claver Gatete the Minister for Finance and Economic Planning noted that the innovation fund is a key milestone in the development of Rwanda’s financial and technology sectors, which is in line with the country’s vision as the innovation and financial hub.

"The project is of strategic national importance to Rwanda as the country seeks to unlock its fast-growing innovation economy and promote private sector –led growth in line with Vision 2050 and the National Strategy for Transformation,” Gatete told The New Times.

According to Abdu Mukhtar, the AfDB director for private sector, industrialization and trade development, the bank is committed in ensuring Rwanda develops through innovation to be able to achieve economic excellence.

"The project will enable the bank to play a leading role in helping regional member countries develop sustainable innovation ecosystems, spur entrepreneurial growth, address funding gaps, reduce poverty, and promote socio-economic growth,” Mukhtar noted.

The project is expected to support more than 150 companies at various stages and invest in about 20 early growth stage opportunities. It is forecast to create more than 2,000 direct jobs and over 6,000 indirect jobs over its 10-year life cycle.

AfDB supports Rwanda in several areas such as private sector development, transport, energy, agriculture, water and sanitation

It will provide capacity-building to about 10 incubators and accelerators as well as facilitate up to five additional angel networks, and training to about 30,000 entrepreneurs across the region.

Speaking to The New Times in an earlier interview, Steve Mutabazi, the ICT Sector Chief Investment Strategist at Rwanda Development Board RDB, said they were putting in place a legal structure which will help to govern the operations of the Fund.

A draft legal instrument is in place and it will be tabled before parliament soon, he added.

Efforts to establish the fund have been ongoing for about two and a half years now.

Initially the public-private venture was expected to be launched by June 2016.

The proposed fund, he said, will support between 20 and 25 ICT companies, of which at least 10 will grow into $50 million worth of corporations in 10 years.

To qualify for funding and technical support, each of the companies must be worth at least $100,000, he said.

The project, according to RDB, will target early growth high impact tech-enabled sectors, with potential to scale up regionally.

Priority sectors include energy clean technology and energy access solutions, smart transport and logistics, e-commerce, agri-tech, digital health, medical and technology devices, inclusive finance tech, and education technology.