Pan-African lender debuts Rwanda market

Development Bank of Rwanda chief executive Eric Rutabana speaks at a past event in Kigali. / Emmanuel Kwizera

Rwanda’s financial sector has received a new entrant, Development Bank of Southern Africa, which will be mostly be involved in infrastructure projects financing.

The South African based Development Finance Institution will be working closely with the Development Bank of Rwanda to finance infrastructure projects by both the public and private sectors.


The lender, which has operations across the continent, will seek to finance key infrastructure projects in transport, energy, utility services and ICT.


Mduduzu Dlamini, the head of financial institutions and SADC region deal origination and client coverage division at the facility said that their interventions will go beyond financing to providing technical expertise.


The financier’s activities in projects will include aspects such as project evaluation, analysis, evaluation and management among other factors.

According to Dlamini, the financier has more flexible and long term and cheaper terms in comparison to commercial financiers.

For instance, he said that they have longer periods of repayment which could extend up to 15-20 years compared to about 5-7 years by commercial banks.

He also noted that the institution will also have affordable rates; below 5 per cent interest in comparison to international lenders whose rates are often around 8 or 9 per cent.

However, the cost of the funds is determined by factors such as  nature of the project, risk perception – public or private sector – the project operates in and guarantees available among other factors.

The body is currently considering a number of projects and initiatives in the country which will determine the nature of engagement with government and the Development Bank of Rwanda (BRD) with chances of closing a project or more in coming months.

The projects being considered in the country could end up in one of several intervention models including; direct lending, lending equity stake, public-private partnership as well as bringing on board a more experienced private sector partners. 

“We are hoping to sign a specific mandate on a specific project before we leave the country in the coming days,” he said.

The facility has already opened talks and reviews authorities to assess the feasibility of financing road projects, an energy project, utility project, housing and a hospital.

Eric Rutabana the Chief Executive of BRD told The New Times that among sectors and benefits likely to benefit from the fund include electrical, water and sanitation, transport as well as social infrastructures such as education and healthcare.

The economic infrastructure, there is going to be demand from the government side while the private sector is likely to have an appetite in social infrastructure,” he said.

Rutabana said that their new partner is ideal in that they are flexible and fluid to project financing approaches ranging from equity stake, debt or a combination of the two.

“For a developing country such as Rwanda, we do not have a shortage of projects that need funding, the challenge is having enough resources to invest. We can have a bigger impact when we work with them,” he said.

BRD invests around Rwf60 to 80 billion annually with the figure set to go up with the new cooperation.

The Minister of Infrastructure, Claver Gatete, said the entrance of the financier to the local ecosystem would allow diversification of funding options and sustainability.

“Currently, over 95 per cent of the infrastructure development is financed by the government and this is not sustainable, therefore partnership with financial institutions should be enhanced,” Gatete said.

He said that with the improvement of the doing business environment, it was time that investments in infrastructure projects become private through the involvement of such financiers.

He called upon local agencies eligible for financing to engage with the financier.

Rwanda Energy Group Chief Executive Ron Weiss said that the agency’s plans and outlook for growth to achieve goals and targets by 2024 require close to $1 billion.

He said that he foresees cooperation with the financier going forward but mentioned that it is largely dependent on the cost of capital putting an agreeable estimate at around 3 per cent.

DBSA is owned by the Government of South Africa but operates in the Southern African Development Community (SADC) and beyond with investments infrastructure sectors.

The net profit of the firm stood at about $209 million in 2018.

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