In an increasingly dynamic and innovative environment, the Development Bank of Rwanda (BRD) recently established a dedicated Department of Special Projects and Infrastructure (DSPI) with a strategic mandate of boosting national economic growth by availing finances to spur infrastructure development.
MRS. REGINA MUKAMUSINGA, the Senior Manager, DSPI in BRD gives insight into the mandate of the department and how it has impacted infrastructure development. The New Times’ MINNIE KARANJA writes.
Not all development projects can be categorized neatly into the priority sectors of the BRD’s interventions – Energy, Housing, Education, Agriculture and Exports – yet they are critical to the country’s socio-economic growth. Therefore, BRD primary focus is financing those strategic projects that enhance rapid development of infrastructure or promote economic transformation for Rwandans in partnership with the government and other stakeholders.
Over the next five years, BRD plans to invest a total of USD 712 million in the economy to trigger at least USD 1.6 billion worth of returns into the economy and create over 180,000 jobs. DSPI will play a crucial role in enabling the Bank meet this ambitious target.
Financing from DSPI will mostly cover public infrastructure like Community Markets, commercial buildings, projects in the Health sector, Transport, ICT, Water and sanitation as well as other strategic projects where the government needs financial institutions to come in and bridge the gap.
Reviewing the year 2016 sector performance
The department started operations in 2016, and the sector registered tremendous achievements with interventions aligned with the objectives elaborated in the Second Economic Development and Poverty Reduction Strategy (EDPRS 2), Vision 2020, Sustainable Development Goals (SDGs) and other strategic developmental goals. The aggregation of these baselines determined the annual targets of 2016 which aimed at injecting Rwf15 billion into the special projects and infrastructure sector.
We surpassed the annual target by approving total loans amounting to Rwf28 billion which were extended to projects categorized in – Manufacturing (Rwf8.3 Bn), Commercial and Hotels (Rwf10.3 Bn), transport and warehousing (Rwf4.1 Bn), and Services (Rwf5.9 Bn). In 2017, the Bank is focused on extending more finance to the sector to boost the infrastructure development in Rwanda.
There are already a number of projects in the pipeline in need of funding. Most are quite large projects which are expected to significantly impact on the economy in terms of job creation, revenue generation and provision of modern infrastructure. We are also optimistic that as the year goes along we will fund more projects and create greater socio-economic impact for all Rwandans.
Prominent among the projects to be implemented this year are – Batsinda Modern market, a 7-storeyed shopping mall located in Kinyinya Sector, Gasabo District, a 4-level commercial market in Rusizi, construction of BAHO Clinic complex and Kabuga Taxi Park,and a commercial building in Rusizi by COMORU (a motorcycle cooperative) – amongst other big projects.
This year 2017, we are very keen on group financing. When people come together to invest they are in a better position to bring about greater economic impact. We would like to encourage people to pool resources and invest as a group so that they can take on bigger projects that will positively impact the lives of many.
A review of ongoing special infrastructure projects under implementation
Building modern community Markets
In 2016, BRD financed a modern community market that will provide over 500 business shops in Nyamagabe District in the Southern Province. We injected Rwf1.073bn of the total project of Rwf1.6bn.The market will have a great development impact to Nyamagabe District.
In the City of Kigali, Inkundamahoro is also a community market that was financed by the Bank with a total investment loan of Rwf5.4Bn. The project is still under implementation but at the finishing stage. The photo above shows that the project is not far from completion.
Improving access to quality Health care
In its mandate, BRD is committed to contributing to the promotion of the health sector, since a healthy population is indispensable for the growth of a country. During the year 2016, the Bank intervened in financing of four projects to the tune ofRwf3.3bn. These projects will contribute to the creation and maintenance of 142 permanent jobs and 200 temporary ones.
Supporting continued growth of the Construction sector
The Bank invested Rwf11.5 Billion in commercial buildings and other business infrastructure. The total investments created 3,025 temporary and permanent jobs. This also created a big impact in terms of improving the business environment.
In addition, BRD invested Rwf10.9 billion in a precast plant for modern construction materials.
Promotion of transport infrastructure and services
In EDPRS II, the government of Rwanda focuses on development of the transport sector with the provision of transport infrastructures and facilities. Therefore, in line with its mandate to help the country attain its development goals, BRD intervened in the transport sector by investing RWF4.1 billion in loans to three private companies and individual entrepreneurs specialized in transport.
Supporting businesses through providing Guarantee facilities
In order for BRD to translate its development impact into real and actionable gains, several initiatives have been undertaken including but not limited to the signing of a memorandum of understanding (MoU) with different strategic partners including; Fonds de Solidarite Africain (FSA), African Guarantee Fund (AGF), BDF and others.
Through such partnerships, it is hoped that guarantee facilities can be offered to project promoters who would otherwise be excluded from financial access due to insufficient or invaluable collaterals despite having viable projects that could have a positive economic impact to the country’s development.
It is from this perspective that BDF and FSA throughout the year 2016 approved SME guarantee funds to which the Bank’s clients have or can benefit from amounting to Rwf3.5bn (and Rwf7.7bn is still under approval process).
High socio-economic impact generated
In line with the Bank’s mandate of becoming a leading development financial partner, the funded projects are expected to have a significant social impact on society and indeed to contribute significantly to poverty reduction and its eventual eradication.
According to available information 5,436 new jobs were created in 2016, 17.6% of which were permanent, and out of these jobs 20% specifically created employment opportunities for women. The projected tax revenue from the projects is Rwf61.7bn over the next 10 years, which will be a big boost to financing government’s economic activities.
The projects will also improve the business working environment by constructing modern community markets and commercial buildings and contribute to the achievement of EDPRS 2 in improving healthcare services, through supporting the private sector in delivery of healthcare facilities.
This is a sponsored feature.