African Development Bank (AfDB) has approved a loan of $30 million (about Rwf25.5 billion) to support the establishment of Rwanda Innovation Fund (RIF), according to a statement from the lender. RIF seeks to promote innovation economy in Rwanda and the East African Community (EAC) region at large.
According to the statement, the resource will be used to establish an investment vehicle focused on funding tech-enabled small-and-medium enterprises (SMEs) and to develop the country’s entrepreneurial and innovation ecosystem capacity.
“By extending this loan to the Government of Rwanda, AfDB wants to enable the country to develop the sector and attract private investors. The project will enable AfDB to play a leading role in helping regional member countries develop sustainable innovation ecosystems, spur entrepreneurial growth, as wel as address funding gaps, reduce poverty, and promote socio-economic growth,” said Abdu Mukhtar, the AfDB director for private sector, industrialisation and trade development.
The loan will support and provide equity financing for SMEs, train tech-oriented entrepreneurs in business planning and management, and increase awareness and sensitisation with respect to intellectual property rights in Rwanda and across the East African Community bloc.
It also seeks to mobilise $100 million in direct commitments from the Government and private investors, while targeting a leverage multiplier effect of up to $300 million in follow-on investments. The project is expected to support over 150 companies at various stages, and invest in about 20 early-growth stage opportunities. The project is expected create 2,000 direct jobs and over 6,000 indirect jobs over its 10-year duration.
It will provide capacity-building to about 10 incubators and accelerators as well as facilitate up to five additional angel networks, and training to about 30,000 entrepreneurs across the region.