Budget: Medical cannabis project, Rwanda Innovation Fund to be financed

More than Rwf759 million has been allocated for the implementation of a high-value therapeutic crop (HVTC) off-site infrastructure project for medical cannabis in the next financial year, according to information from the Rwanda Development Board (RDB). This is one of the projects that is expected to be funded under Rwanda Development Board (RDB)'s proposed Rwf60 billion in the 2023/2024 fiscal year, RDB officials told lawmakers during a budget hearing on Thursday, May 11. This is about 34 per cent higher than the institution’s Rwf44.9 billion in the revised budget for the current fiscal year. ALSO READ: Govt designates 134ha for medicinal cannabis production According to RDB, the main reason for the country’s move to start producing therapeutic crops is to contribute to health and medicinal research around the world and improve the lives of people. Other projects to be financed include the Rwanda Innovation Fund, which was allocated more than Rwf3.9 billion. This facility intends to finance ICT startups so that they grow into strong firms and at the same time support job creation and the country’s economy. ALSO READ: $100m innovation fund in offing Data from RDB shows that Rwf200 million was allocated to the cannabis project in the current fiscal year, which means that, if combined with the projected allocation for the next fiscal year, the total funding is more than Rwf900 million. However, the project faces a financing gap of Rwf13.2 billion, as its total required budget is about Rwf14 billion, to finance the various needed infrastructures in Kinigi (Northern Province), where cannabis farming will be carried out, according to information from RDB. It indicated that the project started on July 1, 2022, and was expected to end on January 31, 2024. RDB Chief Investment Officer, Lucky Philip, told The New Times that the infrastructure in the project consists of roads, fencing of the site where high-value therapeutic crops (including cannabis) will be grown, security cameras for surveillance purposes “to avoid the leakage of the plans and their products to the public”, and electricity supply. He indicated that even processing of such crops could be done at some point in the project. The infrastructure will support private investors who will venture into the high-value therapeutic crops, he said, adding that cannabis farming and other crops will be done by the investors. Last year, RDB told The New Times that Rwanda had dedicated 134 hectares to medical cannabis production, with a view to exporting the plant and its products. The President of the Economic Cluster in the Chamber of Deputies, MP Theogene Munyangeyo, said this is normally a project that has the potential for return on investment, suggesting that if the Government does not get the required funding for this project, it can work with the private sector to expedite its implementation. RDB Deputy CEO, Nelly Mukazayire, said, “Studies were carried out and indicated that the project can be beneficial to us and the country, and there are some investors with whom we signed contracts.” She indicated they were working with the Ministry of Finance and Economic Planning “to look for how the money we don’t have can be available in phases”, starting from the most urgent financing needs for the cannabis project implementation. In 2021, RDB CEO Claire Akamanzi said that high-value therapeutic crops like cannabis present a great economic benefit to Rwanda, since they are highly profitable. She indicated that a hectare of those crops can generate up to $10 million, an amount that is more than 30 times the $300,000 that can come out of a hectare of flowers - which are also considered a high-value plant. Rwanda Innovation Fund The Rwanda Innovation Fund (RIF) is a facility that targets to mobilse $100 million (over Rwf110 billion) budget, aimed to provide equity financing for tech-enabled small and medium-sized enterprises, among other interventions. It is implemented by the Government of Rwanda and its partners. This project was earmarked over Rwf3.9 billion in the next financial year, under RDB’s projected budget. Priority sectors for RIF 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. It is expected to support more than 150 tech companies at various stages. It is forecast to create more than 2,000 direct jobs and over 6,000 indirect jobs over its 10-year life cycle. ALSO READ: Rwanda Innovation Fund starts financing ICT startups Data from RDB shows that as of April 30, 2023, the fund manager, Angaza Capital, which is an investment manager headquartered in Abu Dhabi, Tel Aviv, and Kigali, had made Rwf5 billion in investments in nine startups, four of which are Rwandan.

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Budget: Medical cannabis project, Rwanda Innovation Fund to be financed