Bank commits extra Rwf14.1b due to inflationary pressure
While the WB through the International Development Association (IDA), last year approved a $11m grant in support of the project, the government of Rwanda will have to generate the remaining $20m (Rwf11.3b)
The Ministry of Infrastructure and the World Bank (WB) yesterday officially launched the country’s four year Transport Sector Development Project (TSDP) at Top Tower hotel in Kigali.
The project which has seen light after a long stipulated time was approved in August 2007 and became effective in January last year.
It is expected to improve the quality of Rwanda’s paved road network and generate sustained employment in rural areas through road maintenance works.
Stakeholders said that the delay in the project’s launch came as a result of some technicalities.
Alexis Karani, Director of the planning unit said that, “the launching of this project, although somewhat behind schedule, due to some technical reasons, represents a glaring example of the continued successful cooperation between the government of Rwanda and our development partners”.
Estimated to cost a total of $69m (Rwf38.8b), the TSDP is funded by the WB, Africa Catalytic Growth Fund (ACGF) and the government of Rwanda, through its Road Maintenance Fund.
Last year, the WB through its branch that helps the world’s poorest countries, the International Development Association (IDA), approved a tune $11m grant in support of the project while the ACGF committed a grant in the amount of $38m (Rwf21.4b).
The government of Rwanda will have to generate the remaining $20m (Rwf11.3b).
Being a landlocked country and close to 1,400km away from the nearest sea port, Rwanda’s transport costs are said to represent over 40 percent of her export and import values.
The project will possibly play a crucial role in cutting transport costs by 10 percent by 2012, the Economic Development and Poverty Reduction Strategy (EDPRS) target.
According to Karani, road construction and maintenance management far exceeds Rwanda’s human, institutional and financial capabilities due to the country’s mountainous terrain and excessive rainfall.
Rwanda’s road net work altogether stretches to 14,000km with 2,860km classified as national roads and 1,835km as district roads.
“The economic growth and development of the country is dependent on the development of an integrated transport system” Karani said.
Victoria Kwakwa, WB Country Manager for Rwanda, said that the importance of improving the country’s main road links is part of an overall strategy to reduce the cost of doing business, promote international trade and Rwanda’s integration into the region.
“It is also central to making progress to Rwanda’s objective of becoming a regional trade and service hub,” she added.
Kwakwa announced that the WB will provide an additional $25m (Rwf14.1b) to finance the extra rehabilitation cost of the Kigali-Musanze road, a project financed under the TSDP.
The extra funds from the WB are meant to cater for the expansion of the road from the original design of six meters wide to seven meters.
According to Kwakwa, extra funds will also cater for inflationary pressures in the current global context.
The project’s first and biggest component for the paved road rehabilitation and maintenance is valued at US$62.4m (Rwf35.2b).
The second component, Sector Governance and Policy Support will support the improvement of sector governance and transport policy implementation and it is expected to cost US$2.6m (Rwf1.5b).
The third and fourth components are valued at $2.2m and $1.2m (Rwf678m) respectively.