BRD allocates Rwf15 billion to support bus acquisition for public transport in Kigali

On 22 January 2024 at 09:43

The Development Bank of Rwanda (BRD) has unveiled plans to invest approximately 50% of the Rwf30 billion it recently raised from treasury bonds in providing affordable loans to companies operating in public transportation. The funds will be earmarked to facilitate the purchase of buses.

In October 2023, BRD issued treasury bonds valued at Rwf30 billion. Shortly after, the bank reported that these bonds were oversubscribed at a rate of 110.59%, exceeding the target and resulting in earnings of Rwf33.17 billion.

A substantial portion of these funds is slated for development projects and sustainable investments. Recently, BRD announced its intention to allocate 50% of this amount (Rwf15 billion) to a program offering loans to entities in the public transport sector, enabling them to acquire buses.

BRD justifies this decision as part of its commitment to fostering sustainable and livable cities by supporting the private sector’s investment in efficient transportation, aligning with its mission to contribute to the country’s progress.

The bank intends to grant this loan to companies looking to purchase 200 buses recently introduced to Rwanda by the Government, facilitating easier access for interested entities.

Richard Tusabe, the Minister of State in charge of National Treasury at the Ministry of Finance and Economic Planning, recently clarified that the government’s purchase of these vehicles does not signal a return to the transportation business. Instead, it addresses an existing problem, recognizing a gap in Kigali City and committing to resolving it.

Tusabe revealed that a study indicated a shortage of 305 buses, prompting the government to import 200 initially by January 2024 to assess further efforts needed to improve transportation in the city. To alleviate the burden on the private sector, the government opted to purchase and distribute the buses conveniently.

The loan agreement was initially signed by five transport companies, including RITCO, Remera Transport Cooperative, City Center Transport Cooperative, Nyabugogo Transport Cooperative, and Jali.

The loan is anticipated to carry a 12% annual interest rate, with a repayment period of five years.

According to the National Institute of Statistics of Rwanda, over 300 buses are required in the City of Kigali to address the growing number of people using the public transport system. BRD asserts its readiness to provide loans to cover 70% of the required buses.