Rwanda plans to sell its second international bond of as much as $1 billion next year to fund the construction of an airport and power plants, President Paul Kagame said.
The country wants to build on the success of the 10-year $400m Eurobond issued in April 2013 that was more than eight times oversubscribed, Kagame said in an interview with Bloomberg at the US-Africa Leaders Summit in Washington on Tuesday.
“We might go for double that or more, up to $1b,” Kagame said.
He said investor appetite for Rwandan bonds was a vindication of his policies and show investors are undeterred by criticism from human-rights advocates that the government is stifling political freedoms.
The President said the money from the bond sale will fund infrastructure projects, including the upgrading Kigali International Airport and the construction of a 150-megawatt geothermal plant, as well as financing the Lake Kivu methane power plant project that is expected to produce 100MW of power.
The money from the first bond issue was also used to fund infrastructure projects like the Kigali Conventional Centre, according to the finance ministry.
Yields on Rwanda’s Eurobond, due May 2023, have dropped 140 basis points, or 1.4 percentage point, this year to 6.076 per cent as of Monday.
Rwanda is one of Africa’s fastest-growing economies, with growth averaging 7 per cent over the past five years. The economy is forecast to expand 7.5 per cent this year and next, according to estimates from the International Monetary Fund.
As if to underlines the growing appetitive for high-yielding debt among investors, especially offshore and institutional investors, the IFC, World Bank’s private sector lending arm, Rwf15.5b local currency-based bond issued in May was oversubscribed by over 111 per cent, raking in Rwf32.8b. Earlier in February, the government issued a Rwf12.5b bond that was oversubscribed by 140 per cent.