The Infrastructure Investment Economist at AIIB, Suzanne Shaw recently told CNBC Africa that the loan is meant to boost economic recovery by financing private sector investment in the areas including textile manufacturing, agro-processing and construction.
Shaw explained that the loan was approved in consideration of the impact of COVID-19 pandemic which has had a big impact on the world, particularly the African continent.
“It is important for the bank to be relevant to its members. This loan from AIIB will help to boost economic recovery and build resilience in Rwanda post Covid-19 to put the country back on the path to sustainable growth. This is very important to meet to the needs of our members in a time of crisis like this,” she said.
The loan is AIIB’s first engagement in Rwanda since it became member in 2019.
It is also the bank’s first investment in Sub-Saharan Africa.
Shaw stated that the loan is expected to restore Rwanda’s economy which experienced first recession in 20 years.
“Rwanda has for the last couple of decades implemented a number of structural reforms to improve the economy and put it on goof growth path. What we have seen with Covid is that the country experienced its first recession in 20 years. This is huge when you think about a country like Rwanda that has been on great path in terms of economic growth,” she noted.
“We are convinced that by providing this loan, we can have an impact on the country by bringing it back to recovery but also ensuring long term economic resilience and growth. The loan will go to finance investment by private sector in the areas of textile, agro-processing, construction and line manufacturing which is also part of the country’s plan to put itself on the path of pre-Covid growth by investing in these sectors,” added Shaw.
The loan will be repaid within 34 years and six months with a grace period of 5 years and half.
The loan was approved by the bank’s fourth annual board meeting held in Luxemburg.
AIIB is a multilateral development bank that aims to improve economic and social outcomes in Asia. The bank currently has 103 members as well as 21 prospective members from around the world.