The Government of Rwanda and Saudi Fund for Development (SFD) yesterday signed a $15 million (approximately Rwf11.2 billion) concessional loan to fund the construction of Nyagatare-Rukomo road.
The Government of Rwanda and Saudi Fund for Development (SFD) yesterday signed a $15 million (approximately Rwf11.2 billion) concessional loan to fund the construction of Nyagatare-Rukomo road.
The 30 year concessional loan will support the construction of a 7 meter wide, 73 kilometer two lane tarmac road between Nyagatare and Rukomo, Claver Gatete, Minister for finance and economic planning said.
He added that the loan comes with a grace period of 10 years and is geared towards reducing the cost of transport, while speeding up economic development in the eastern province.
It is equally expected to boost cross border trade between Rwanda and its neighboring countries including DRC and Uganda, Gatete added.
This is the second time in less than a month that government is securing funds for this particular project.
Recently, both the government and Kuwait Fund for Arab Economic Development (KFAED) signed a $15 million (approximately Rwf11.2 billion) to support the construction of the same road.
Overall, Nyagatare-Rukomo road project is part of the wider 124.8 km Base-Nyagatare road project which is expected to cost $88.5 million (Approximately Rwf66 billion).
The big chunk of funding ($75 million) comes from Arab Funds including KFAED, Saudi Fund, Arab Bank for Economic Development in Africa and the OPEC Fund for International Development.
Last year, government managed to secure $ 74.4 million (about Rwf52 billion) from the African Development Bank (AfDB), to finance the construction of the 51-kilometre Base-Gicumbi-Rukomo road.
The Government of Rwanda is expected to provide atleast $13.5 million as counter funds to the same project.
The project, when completed, will open up the region and connect the Eastern, Northern and Western provinces, thus boosting both national and international trade flows.
And according to Eng. Hassan Al-Attas, the Director General of Operations, Saudi Fund for Development; this particularroad will not only reduce transport costs but also increase productivity in the agriculture sector.
"It is equally designed to create more job opportunities and enhance government’s ability to achieve its economic objectives,” Al-Attas told The New Times.
It is also expected to facilitate access to markets, create employment opportunities, foster regional trade and overall lead to poverty reduction, he added.
So far, the Saudis have funded more than 11 development projects across various sectors totaling to $114million.
"Saudi Fund operations in Rwanda have focused on transport related support as we believe ease of access is important for a land locked country like Rwanda. We are therefore committed and open to support Rwanda’s development agenda,” Al-Attas added.
Guy Kalisa, the director-general of RTDA, said actual road construction is set to commence January of 2017 and will take 24 months to be completed.