Development Bank of Rwanda (BRD) on Monday, October 7, listed its second tranche of the Sustainability Linked Bond worth Rwf30 billion on Rwanda Stock Exchange (RSE).
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The bond, part of BRD’s Rwf150 billion medium-term note programme, was oversubscribed at 130.2 per cent. The oversubscription provision in the bond terms enabled BRD to tap into an additional Rwf3.5 billion in addition to the proposed Rwf30 billion target issue size.
The first tranche which marked BRD’s debut on RSE in October last year was equally worth Rwf30 billion and was as well oversubscribed at 110.5 per cent, perhaps demonstrating increased investor appetite as more institutions embark on raising funds at the capital markets.
Pierre Celestin Rwabukumba, CEO of RSE, emphasised that Rwanda’s growing capital markets should and can play a pivotal role in combating the most critical environmental challenges.
"This listing draws a straight line between financial markets and key projects intended to mitigate climate change, conserve resources, and promote a low-carbon economy.”
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He added that the proceeds derived from the bond will be utilised for projects that align with Rwanda’s second National Strategy for Transformation and protection of the environment, providing reassurance about the bond&039;s impact on the nation's future.
Kampeta Sayinzoga, Chief Executive Officer of BRD, said the support demonstrated as the institution made the issuance encourages it to keep finding innovative ways to raise financing for national development agenda.
She added that the bank will continue to seek financial instruments that generate returns and create a meaningful impact for all the stakeholders.
The bond has a seven-year maturity at an interest rate of 12.9 per cent per annum. The investors range from domestic pension funds, local banks, insurance companies, unit trusts, asset managers, and non-financial institutional investors.
It also attracted Rwandan diaspora investors from different countries such as Kenya, Canada, UK, Tunisia, Uganda, Norway, Japan, Burundi, Djibouti, South Africa, France, Germany and Ivory Coast.
Finance Minister Yusuf Murangwa commended BRD for leveraging finance for sustainable development through innovative products introduced on the stock market and designing and delivering innovative financial instruments that address Rwanda’s unique challenges.
"This sets a powerful example for other institutions in Rwanda and the region to become architects of impactful development solutions. We are signaling both the domestic and international investors that Rwanda is ready and open for business, particularly in areas that align with global sustainability priorities.”
Sahr Kpundeh, World Bank Country Manager, said that this step is a testament to Rwanda’s leadership and forward-thinking approach to driving sustainable development through innovative financing mechanisms.
He noted that the instrument put in place as a partnership between BRD and the World Bank, "exemplifies our shared commitment to advancing sustainable development and demonstrates what can be achieved when innovation, inclusion, and sustainability come together to drive our financial systems.”
The proceeds will also enhance BRD’s efforts to mainstream Environmental and Social Management System (ESMS) implementation across Rwandan financial institutions, increasing women-led business loans, and financing long-term affordable housing mortgage.