The Government has signed an agreement with an Indian based company that specialises in tea manufacturing, which is expected to help boost Rwanda’s tea production capacity and exports.
On behalf of the Government, the Memorandum of Understanding (MoU) was signed by the Minister for Agriculture and Animal Resources Gerardine Mukeshimana, on Wednesday in Kigali.
Speaking at the event, Mukeshimana said the deal with Luxmi Tea company underscores government’s efforts to promote agricultural exports, particularly tea exports.
“The promotion and development of the tea industry has been key for the Government even when we decided to privatise tea firms. This reaffirms our efforts to promote the agricultural sector,” she said.
Rudra Chatterjee, the executive director of Luxmi Tea, said the agreement would facilitate setting up one of the best tea projects in the country and bring more expertise to the tea industry.
“Negotiations have not been so easy, but we finally made it after we had clearly indicated what we want to do, which is to have the best tea project in the country. This is a great start and as a company that has over 100 years of experience, we believe there’s a lot we are bringing on board,” he said.
According to Bill Kayonga, the CEO of the National Agricultural Exports Promotion Board (NAEB), the agreement will benefit the country and smallholder farmers.
The multi-million dollar project will benefit over 7,000 farmers, he said.
Kayonga said a tea processing company which will be built in Karongi District, will have an industrial block of 438 hectares and out-grower scheme of over 4,000 hectares. The investment over the next 10 years will be between USD 28- 30 million with an anticipation of reaching full production of 8000- 9000 metric tonnes of processed tea per year.
“This will raise the value of tea from 2.6 dollars to 3 dollars that will bring in between USD 25- 30 million per year, which is a big boost in terms of foreign exchange that will be earned,” he noted.
In a related development, the UK’s Department for International Development (DFID) and The Woods Foundation Africa (TWFT) also signed a co-financing strategic partnership to support the project.
DFID funding will enable The Wood Foundation Africa, a trusted local partner and expert in the tea sector, to organise, train and support up to 7,000 smallholder farmers to plant and produce high quality tea to supply the planned Luxmi factory in Rugabano Sector, Karongi District.
Sally Waples, the head of DFID Rwanda, said one of their development priorities in Rwanda is to support Government to stimulate private sector investment in priority sectors.
“Life-changing progress comes from growth that transforms economies, attracts vital foreign direct investment while creating decent jobs and improved incomes for all including the youth, women and the poorest. That’s why we are supporting the tea sector, which is an important driver of Rwanda’s export growth, revenue, and job creation,” she said.