For the first time, the Development Bank of Rwanda (BRD) made an entry on the stock market by listing its Rwf30 billion Sustainability-Linked Bond, on Friday, October 27. The seven-year maturity bond, announced on September 29, will be listed and traded on Rwanda Stock Exchange (RSE) at a coupon rate of 12.85 per cent in local currency. ALSO READ: BRD’s Sustainability-Linked Bond oversubscribed by 110.5% The bond which was received with an appetite among investors was oversubscribed by 110.5 percent, surpassing the initial target amount of Rwf30 billion to Rwf33.1 billion. The listing on RSE initiates the bond on a secondary market, which means that subscribers or initial buyers of the bond will be able to trade their investment portions with other interested parties. ALSO READ: Why BRD’s Rwf30bn inaugural bond is a big deal The proceeds from SLB will be used in large part to finance, among other projects, small and medium-sized businesses, affordable housing, and raise women-led businesses from the current 15.4 percent to 30 percent, according to the bank. It is the initial issuance of a larger $124 million (Rwf150 billion) Medium Term Note Programme, a project that will run for five years in collaboration with the World Bank which is providing a Rwf10 billion guarantee for investments of entities that subscribed to the bond. Kampeta Pichette Sayinzoga, CEO of BRD, said that besides other factors including the bank’s strong performance over the past years and the guarantee provided by the World Bank, the bond managed to attract public appetite and confidence because Rwandans want to be involved in initiatives that aim for the collective good. “For the first time in 56 years, we are able to put ourselves out there. When the market buys the bond, it means they are buying into the company, which holds great significance to our work. It gives us more flexibility to mobilize resources for project financing.” Sayinzoga noted that the bank looks forward to issuing more bonds in the near future with the hopes of attracting more individual subscribers in addition to institutions. ALSO READ: World Bank spurs Rwanda’s private capital mobilisation with first Sustainability Linked Bond Out of 129 subscribers of the SLB, 100 were individual investors, which represents 77.5 percent of all subscribers that contributed Rwf1.1 billion to the total amount, according to BRD. The other percentage is shared among commercial banks, pension companies, corporate companies, and savings cooperative. Pierre-Célestin Rwabukumba, CEO of RSE, said this is a big milestone for the local stock market and across, with BRD championing sustainability financing instrument which plays a big role in the country’s development. While stock markets in the region have been shaken by the current economic hurdles, he noted that RSE has remained resilient recording strong performance in different indices. Rwabukumba said that going forward, there are three transactions in the pipeline expected to be listed before the end of 2023. The SLB is partially credit-enhanced through a World Bank lending operation to the Government of Rwanda through the Access to Finance for Economic Recovery and Resilience Project (AFIRR) –a five-year project that runs on three pillars including liquidity and recovery facility, risk-sharing facility, and institutional strengthening and implementation support. Sahr Kpundeh, World Bank Country Manager, said that this is a key instrument of galvanizing private sector investment to meet trillions of investments needed to curb climate change's impact on economies. “This bond structure which can be scaled up and replicated in other countries enables the World Bank to stretch every dollar and boost its capacity in concessional financing,” he noted. Richard Tusabe, State Minister in charge of National Treasury, Ministry of Finance and Economic Planning, commended the bank for issuing this bond which is a testament to the role of the market in achieving Sustainable Development Goals. “This bond is a groundbreaking initiative that not only demonstrates our commitment to sustainable development but also provides an opportunity for investors to support projects that have a positive impact on environment and society,” he added.
