AfDB loans Rwanda $30m to finance new cement plant

The African Development Bank, has approved a $30million loan to enable CIMERWA, Rwanda’s only cement factory, construct a new plant, with the capacity to produce 600,000 tonnes using the dry process methodFiacre Birasa, Chief Executive Officer (CEO) of Rwanda Investment Group (RIG) which is the majority holding company of CIMERWA, said that the support is timely and, with the loan approval, the new plant is expected to be up and running by 2011 The new resource-efficient plant will replace Cimerwa’s energy-intensive wet process method that produced only 100,000 tonnes. According to Jean Phillipe Kayobotsi, an Economics Advisor with the Strategic Policy Unit (SPU) within the President’s office, the project is part of the government’s priorities. “It will contribute to reducing trade deficit – one of the priorities of the government set by the retreat in Kivu,” Kayobotsi said. “By producing more cement, there is less need for importing, and Rwanda can instead earn foreign exchange by exporting to other countries like Burundi and DRC.” A statement from ADfB, said that the project is consistent with the Bank’s Private Sector Operations strategy that aims at catalyzing private sector investment and supporting indigenous entrepreneurs. “Furthermore, as the Rwandan government has a 10% stake in CIMERWA, the project highlights the importance of public-private partnerships as a “smart financing” vehicle to leverage public financing for private sector development”, a statement read shows. The project will also help to demonstrate the impact that private sector development can have in reducing constraints on strategic sectors like manufacturing, which is much related to the activities of the construction sector. Increased cement production will potentially result in a decrease in the price of cement for end-users, thus diminishing the cost of a key component in the construction industry, and boosting the development of the country’s manufacturing sector. Kayobotsi added that the project will also help the country attract investors in real estate. The project will be the Bank’s first private sector industrial investment in Rwanda, and one of the largest industrial investments in the country. It will therefore pave the way for other private sector projects by demonstrating local entrepreneurs’ ability to initiate large transactions with significant knock-on effects on the national economy. It is expected to boost the construction sector and foster economic growth. It will also create 285 jobs as well as enhance social infrastructure. Once it’s implemented, it’s said that additional resources provided to the government in terms of foreign currency savings through import substitution, as well as improve regional trade within the East African economic community. Ends

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AfDB loans Rwanda $30m to finance new cement plant