African Export-Import Bank (Afreximbank) is planning a further financial outlay of $100 million in Rwanda’s economy, mainly the infrastructure sector, by the end of this year as it positions itself to tap into the country’s growing trade industry.
The development is part of a $500 million commitment made in June last year by during the international lender’s annual general meeting in Kigali.
Ademola Adeyinka, a Trade Finance Specialist at the Bank told The New Times that they have so far invested about $200 million in the Rwandan economy in various projects including the construction of the Kigali Convection Centre, which was funded through Bank of Kigali.
The bank also has a $10 million credit line with the Development Bank of Rwanda to support exports.
He said that in the disbursement of the $500 million, was not targeting specific sectors but broadens out to aspects that support trade such as infrastructure, conference facilities, and hotels among others.
“We do not have specific sectors that we want to target but we have specific sectors that we do not work with such as real estate, arms and ammunition and gambling. We are however keen on anything that would facilitate trade including hotels, conference facilities and infrastructure among others,” he said.
Adeyinka said that they have witnessed high appetite for financing from local banks.
“We have seen interest coming in from Rwanda, banks have been quite aggressive in making requests,” he said.
However, the bank is unlikely to proceed with earlier plans to invest in Bugesera International Airport with insiders citing “tough” conditions set by the lender.
The Bank has also launched a continent trade facilitation programme, which is aimed at boosting the confidence of international banks in African lenders.
Afreximbank hopes that the programme will free up Africa-shy international banks to accept letters of credit issued by African lenders.
With growing costs of compliance and regulatory requirements in Africa and the high capital allocation of trade finance transactions, Afreximbank will be offering trade instruments confirmation and discounting, letters of credit confirmation guarantee as well as reimbursement undertaking.
Afreximbank said that local banks are increasingly well placed to work with them.
“We do believe that the transactions that are currently going on in Rwanda with the bank are currently going on very well, there is no default. It has been very tidy. You do not have to keep following up with everyone. Particularly bank of Kigali. We appreciate the credibility of the system,” Adeyinka said.