The money is meant to increase the council’s investment capital for executing its various obligations. It includes financing some five key infrastructural projects embedded in the 50 year renewable Kigali Master Plan.

Kigali City Council (KCC) ‘municipal bond’issuance has been slated for March 2009, after the council received its business plan from Dyer & Blair according to Bruno Rangira, KCC’s Director of Communications.

The city council was set to issue a five year bond in September last year to raise Rwf5 billion from the public.

The money is meant to increase the council’s investment capital for executing its various obligations including financing some five key infrastructural projects embedded in the 50 year renewable Kigali Master Plan.

The areas that have to be financed by funds raised from the ‘municipal bond’ include the development of Kimihurura Gateway and the new central ‘Business District’.

The city is supposed to avail water, electricity, roads and sewage systems in the proposed areas and then sell the projects to investors for further development.

According to sources, after a thorough review of the projects, the Rwf5m was found to be depleted, meaning the council needed to raise a higher figure, if it is to meet its financial obligations.

"I am not in position to comment about the details,” said Rangira.Simon Karenzi, CEO, Dyer & Blair securities Rwanda, the lead transaction advisors said that they fianalised the business plan and handed it to their clients (KCC).

Dyer & Blair Rwanda is a subsidiary of Dyer & Blair Investment Bank which was also the lead transaction advisor to the Safaricom IPO, valued at over $800m (Rwf455.7b).

According to a memorandum of understanding signed between KCC and Dyer and Blair last year, the latter was charged with marketing and selling the bond.

Dyer & Blair was also supposed to advice on the pricing of the bond and its coupon rate. It had also earlier emerged that the delay to issue East Africa’s first municipal bond was partly due to the increasing inflation pressures.

Financial experts argued that if KCC was to list the bond on the Rwanda Over-the-Counter (OTC) Market, it would offer a product that would beat inflation and hopefully offer returns above it.

But city authorities said they would issue their bond despite the prevailing inflation rate in the country.

Pierre Celestin Rwabukumba, Operations Manager CapitalMarket Advisory Council (CMAC) recently said that KCC will issue the bond, but they will still look at the current market condition.

"They will look at the lending rate, interest rate on treasury bills and treasury bonds.

It also depends on what the market is willing to pay,” he said.City authorities opted to raise funds through issuing the bond. Kigali city harbors a million people during day time and about 800,000 people during the night.

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