Under this arrangement, the European Investment Bank will provide EUR 15 million new long-term financing under its East Africa COVID-19 Rapid Response facility, which will be complemented by EUR 15 million counter financing from the Development Bank of Rwanda thus unlocking EUR 30 million (approximately Rwf35 billion) to Rwandan business investments.
Businesses will be able to access long-term loans in Rwandan Francs, US$, and EUR, with tenors of up to 10 years.
Commenting on the development; the CEO of BRD, Kampeta Sayinzoga explained that the investment from European Investment Bank will facilitate private sector development especially Small and Medium Enterprises.
"This illustrates the growing trust that international financial institutions place on BRD. 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.
The EIB Vice President Thomas Ostros who was on his first official visit to Rwanda to participate in the formal announcement emphasized that the EUR 30 million of new financing to be managed by the Development Bank of Rwanda will help strengthen economic recovery from COVID-19 in Rwanda.
“Since the start of the COVID-19 pandemic, the European Investment Bank has worked with leading banks and financial institutions in Rwanda and across Africa to ensure that companies can continue to invest, protect jobs, and harness new business opportunities,” he noted.
Last month, EIB signed a credit line worth EUR 55 million with commercial banks which saw Bank of Kigali and KCB Rwanda allocated EUR 40 million and EUR 15 million respectively.
On top of supporting the private sector investments, the credit lines also allow female led companies and firms that contribute to gender quality to benefit from improved access to finance up to 30% of the total financing.
Dr. Uzziel Ndagijimana, the Minister of Finance and Economic Planning who was also present during the ceremony revealed that the Lines of Credits to the banking sector come to complement Government of Rwanda’s efforts to support private businesses which are facing risks of collapse, in order to recover from COVID-19 and invest for economic recovery and resilience in the post COVID-19 pandemic.
The new targeted financing scheme will include support to 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.
Key sectors that are set to benefit include agribusiness, manufacturing, and the health sector