Germany has given Rwanda a financing grant worth €98.1 million (approximately Rwf103 billion) that will be channeled to funding Medium Enterprises (SMEs), and supporting the local pharmaceutical manufacturing sector in the next two years.

The development comes after negotiations that the two countries had this week as part of the celebrations to mark 60 years of cooperation.

"Germany and Rwanda agreed on the next steps in their development cooperation worth €98.1 million during the government negotiations concluded today (Wednesday, October 26),” said a statement from the Ministry of Finance and Economic Planning (MINECOFIN).

The funding is purely grant, according to officials from the German Embassy.

The funding will also cover climate change mitigation.

Of that, €39.5 million of the package will be allocated for dealing with climate change, where key mitigation and adaptation projects will be funded, for example supporting sustainable urbanization – such as making coastal cities along lake Kivu climate-resilient in order to control floods and landslides.

It will also support activities to improve waste management and circular economy (recycling).

"Climate change and social protection are two sides of the same coin. This is why, in addition to climate action, our climate and development partnerships are also about strengthening social justice. We want to provide particular support to those worst hit by the climate crisis,” said Svenja Schulze, Germany’s Development Minister, in a communique provided to the media by MINECOFIN..

In terms of supporting SMEs, the funding will be used to strengthen the provision of vocational education and training for young people and women. As part of this, the two countries signed two agreements worth €29 million of German financial cooperation for the TVET sector, which will be used for stipends to increase access to education as well as for school investments in infrastructure and equipment of TVET schools.

Uzziel Ndagijimana, the Minister of Finance and Economic Planning praised the outcomes of the inter-governmental negotiations that happened this week between Rwanda and Germany, saying they are a clear indication of a growing partnership between the two countries.

Germany will also support local pharmaceutical manufacturing (including vaccine production) as a priority area for cooperation between the two countries in the next two years.

The European country is providing substantial support with regard to training qualified personnel and lending support to the Rwanda Foods and Drugs Authority (RFDA), as a contribution to making access to high-quality, affordable health care on the continent.

Early this year, construction works for a vaccine production factory of the German company BioNTech were launched in Kigali.

As part of the next step of cooperation, Germany and Rwanda also agreed to expand social protection efforts, by for instance putting in place a pro-poor basked fund that aims to strengthen inclusive public service delivery and infrastructure to poor and vulnerable population groups.

Of the total commitment of €98.1 million, 31 million is subject to approval by the German Parliament.