European Bank, BRD set up €30M private sector financing facility

Rwandan entrepreneurs seeking financing for new investments or to adjust to the effects of the pandemic are set to benefit from a financing initiative by the Development Bank of Rwanda (BRD) and the European Investment Bank launched on 23rd November. The new facility is a EUR 30 Million new long-term facility funded by both the European Investment Bank and BRD’s own capital. The new targeted financing scheme will include support companies in sectors most impacted by the trade, economic and health challenges triggered by Covid-19 and unlock investment to accelerate private sector recovery from the pandemic. The facility which was availed by the European Investment Bank in local currency will see entrepreneurs access cheaper capital and have ideal long repayment periods. Rwandan companies will be able to access long-term loans in RWF, USD, and EUR, with tenors of up to 10 years, which means cheaper and more manageable credit terms. According to BRD officials, the funding is among other aspects expected to boost sectors such as agriculture, energy, health sector, manufacturing which will contribute to economic recovery. BRD Chief Executive Officer Kampeta Sayinzoga said that the eligibility terms for the fund are wide to accommodate start-ups, existing firms, SMEs, firms that want to diversify or venture into new avenues of business. “More specifically, this investment will enable BRD to provide long term loans to companies ready to invest directly in Rwanda’s recovery journey. Together, we will capitalize on job creation and value addition,” she said. While the number of business benefiting from the facility will depend on demand, she said that a majority of demand is often medium sized loans which often have a demand of between Rwf 300M to Rwf 500M loans. Thomas Östros, the Vice President European Investment Bank said that they expect that the Euro 30 million financing managed by the Development Bank of Rwanda will serve to strengthen economic recovery from COVID-19 in Rwanda. Uzziel Ndagijimana, Minister of Finance and Economic Planning noted that the pandemic hit Rwandan companies hard and new investment is essential to overcome health, business and trade challenges. “The European Investment Bank’s partnership with the Development Bank of Rwanda will unlock essential new investment. I wish to thank the EIB for their firm support to private sector growth, water and medical investment in our country,” he said. In October this year, the government through the Ministry of Finance and Economic Planning Signed an agreement to receive financial support from the European Investment Bank (EIB) as part of the Covid-19 recovery fund for Small and Medium businesses. The financial agreement saw theEIB consign €95 million (over Rwf110 billion) to Bank of Kigali (BK) and KCB Rwanda for proper allocation to different businesses as part of the economic recovery fund. The agreement entailed that Bank of Kigali will receive €40 million, and contribute a matching €40 million while KCB will receive €15 million.

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European Bank, BRD set up €30M private sector financing facility