European Investment Bank today signed in Kigali two Global Loan Agreements, one for EUR 7million with Banque Rwandaise de Développement (BRD) and one for EUR 3million with Banque Commerciale du Rwanda (BCR).
The two credit lines aim at increasing the flow of long-term funds for SME development in Rwanda. Building on existing relationships with banks in Rwanda, long term funding will be made available to, primarily, small and medium sized companies. The facility will enable BRD and BCR to provide long-term loans and structure leasing operations in Euros and in Rwandan Francs (RWF).
The amount of the loan is in line with the current funding requirement of the two banks. The current facility specifically supports the development of export-oriented enterprises through two of the best performing banks in Rwanda. Both banks have a strategic goal of developing their SME portfolio, making use of their well-established branch-network. They also have a tradition of providing diversified financial service to Rwanda's private sector.
The contract was signed by Mr. Carmelo Cocuzza, Director of the regional representation for East and Central Africa of the EIB and Mr Théogène Turatsinze, Managing Director of Banque Rwandaise de Développement and Mr David Kuwana, Managing Director of Banque Commerciale du Rwanda. Mr Cocuzza commented that: "The agreements we have just signed, demonstrate the role that the EIB and its partner Rwandan financial intermediaries play together in supporting private sector development and particularly in providing added value by offering Rwandan SMEs access to long term funding.
This is the first operation of the EIB under the Cotonou Agreement Investment Facility. Banque Rwandaise de Développement (BRD) signed its first operation with the Bank in 1983. It also fully utilised a EUR 8 million line of credit during the period 2000-2003. This is the first operation with BCR, although EIB has long-standing relationship with its parent company, ACTIS.
Rwanda's economy has made considerable progress in recent years, in particular as far as macroeconomic stabilization is concerned. Growth has strengthened, inflation is currently in single digits and aid flows have contributed to boost foreign reserves, while supporting some limited currency appreciation. Furthermore, the reaching of the completion point under the enhanced HIPC Initiative in 2005 is an important landmark for Rwanda, providing significant debt relief and creating the conditions for an acceleration of its reform agenda.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects that further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union.
Financing in Africa, the Caribbean and the Pacific (ACP) is carried out under the provisions of the Investment Facility, set up by the ACP-EU Partnership Agreement, signed in Cotonou in June 2000. The IF is established by successive protocols defining the aggregate amount of Community aid to the ACP States for each successive five-year financial period. For the first period (2003-2008) the Member Sates pledged 2.0 billion EUR. For the second period (2008-2013) the IF received a further EUR 1.1 and EUR 400 million was made available to provide technical assistance. Under the same protocol, that was signed in June 2006, the Member States supplied support for EUR 2bn lending from the EIB's own resources (was EUR 1.7 billion for 2003-2008). The Investment Facility is a revolving facility (loan amortizations will be invested in new operations), aiming at supporting technically, environmentally, financially and economically sound projects in the private or the commercially run public sector.
For further information about the EIB's activities, please visit its web site http://www.eib.org/acp