What’s driving Rwanda's growth in corporate bond issuances?

Rwanda’s corporate bond market recorded strong growth in the 2024/2025 fiscal year, with issuances rising by 61 per cent as investors increasingly turned to debt instruments, particularly green and sustainability-linked bonds. According to the Capital Market Authority (CMA) Rwanda Annual Report 2024/25, three corporate bond issuances approved between July 2024 and June 2025 raised a combined Rwf46.011 billion, with issuers also exercising green shoe options worth Rwf3.511 billion due to high investor demand. ALSO READ: 2025 marked a turning point for the capital market Key bond issuances During the period under review, the regulator approved three major corporate debt instruments, including Mahwi Grain Millers’ Rwf 3.011 billion traditional bond under the first tranche of its Medium-Term Note programme, which was oversubscribed at 100.4 per cent. Chantal Habiyakare, Chairperson of the Board of Mahwi Grain Millers, said the bond offered more than just financing. “We pay interest every six months, and we don’t repay the principal for the next five years.” “This patient capital allowed us to operate without extra stress, establish proper management, and gain credibility. People and institutions now trust us, and we were able to work with banks and other financial bodies without providing extra collateral.” She added that the listing also brought the company greater visibility, a strong board of directors, and a structured framework that gave potential investors confidence. ALSO READ: How capital markets can drive long-term investment in RwandaV Meanwhile, Prime Energy issued Rwanda’s first corporate green bond, raising Rwf9.5 billion for renewable energy and sustainability projects, which was oversubscribed at 106.4 per cent. The Development Bank of Rwanda (BRD) Plc issued the second tranche of its sustainability-linked bond, raising Rwf33.5 billion with a 130 per cent subscription rate. Isaac Munene, Senior Corporate Finance Analyst at BK Capital, a brokerage firm, told The New Times that this growth reflects both investor confidence and a steady improvement in investor knowledge over the past five years. “For bonds such as BRD’s [sustainability-linked bond], it shows that investors are now comfortable with what bonds are, how they work, and what kind of instruments they are,” he said. He further noted that the trend says a great deal about the private sector, noting that companies such as Mahwi Grain Millers, despite being less than 20 years old, are already active in the capital market. “The rising interest in green and sustainability-linked bonds shows that investors now understand how these ESG instruments work and recognise that their money delivers not only financial returns but also clear social and environmental impact,” he added. ESG or environmental, sustainable and governance instruments are financial tools or investment products designed to support or evaluate companies and projects based on Environmental, Social, and Governance (ESG) criteria. Put simply, they help investors put money into businesses that act responsibly toward the environment, people, and how they are run. According to Rwanda Stock Exchange (RSE) CEO Pierre-Célestin Rwabukumba, the growing preference for corporate bonds is driven by a shift by private sector companies toward alternative financing, as many opt for debt instead of selling ownership stakes through shares. “Equities markets are volatile across the globe, including Africa and Rwanda. There is a general drought of initial public offerings (IPO), and people are moving more towards private markets because of perceived risk,” he added. The exchange is rolling out new products, including the Exchange-Traded Funds (ETFs) and Real Estate Investment Trusts (REITs), to attract more companies to the market. “We already have the Green Exchange Window. Now the focus is on bringing real products to the market,” he said. Secondary market trends During the period under review, the Government raised Rwf246 billion through the issuance of 14 Treasury bonds, including seven re-openings, compared with 13 bonds issued in the previous year. Investors' appetite for government securities strengthened markedly, with the average subscription rate nearly doubling to 293 per cent in the 2024/25 financial year, from 154 per cent a year earlier. The surge in demand underscored ample liquidity in the market. As a result, capital mobilised by the Government through the capital market rose by 27 per cent, translating into an additional Rwf52.5 billion compared with the previous year. Activity in the secondary market also accelerated, with bond turnover climbing to Rwf148.5 billion, a 167 per cent increase, reinforcing the Capital Market Authority’s view of fixed-income instruments as a robust channel for long-term savings. The investor base continued to broaden, with collective investment schemes recording assets under management of Rwf71.4 billion, held by 40,253 unit-holders. This represents year-on-year growth of 12 per cent in assets and 39 per cent in investor participation.

News

What’s driving Rwanda's growth in corporate bond issuances?