Rwanda and the Export-Import Bank of India (EXIM Bank India) yesterday signed a $120m (Rwf 79.5bn) concession loan targeted towards irrigation, watershed management and value addition in the agricultural sector.

Speaking after the signing, the Minister of Finance, Amb. Claver Gatete, said the cooperation will help transform agriculture in Rwanda by increasing agricultural production for home consumption and export through irrigation and value addition.

"Agriculture is playing a huge role in achieving goals in the second Economic Development and Poverty Reduction Strategy of which rural development is among,” he said.

The minister said that farmers, especially those in the Eastern Province’s Kirehe District, were eagerly waiting for the funding and that the government was backing them in moving away from traditional methods of agriculture by investing in the sector.

Districts in the Eastern Province have earmarked over 123,000 hectares for crops such as maize, soya and beans on a large scale.

Agriculture minister, Dr. Agnes Matilda Kalibata, said more than 50 per cent of the loan, which is Rwf 39.7bn, would be set for developing irrigation projects in Kirehe district as the area usually faces long periods without rainfall.

"Kirehe District is a major contributor to the national food basket and is surrounded by a number of rivers and lakes which can be used for irrigation,” she said.

Kalibata added that the government was looking at ways of having enough food for the population and at the same time improve the value of agricultural products in order to export more.

"We are looking at increasing Rwanda’s export base and expect the loan will help generate revenue to the Rwandan government of between $10m to $15m annually,” said S.N Ray, the Indian High Commissioner to Rwanda.

Ray added that he was hopeful the project would be implemented as soon as possible.

"This is the third line of credit we are extending to Rwanda and want our countries to grow together,” said Geeta Poojary, General Manager of Export-Import Bank of India (EXIM Bank).

Last year, Rwanda sought Government of India-supported EXIM Bank India Line of Credit for construction of a 27.5 MW hydroelectric project on the [Nyabarongo river] to be executed by [BHEL] and Angelique International. A credit of $80m was approved and effectively disbursed. 

The main items of Indian exports to Rwanda are pharmaceuticals, vehicles, plastics and machinery. Bilateral trade between the two countries stood at $210m and has seen a growth of over 350 per cent in the time period between 2005 and 2009.

In the year 2011 alone projects by Indian entrepreneurs worth over $200m were registered in Rwanda.