The East African Development Bank’s (EADB) governing council has resolved to admit Rwanda as a class A member.
Class A members of the EADB are member countries, while Class B members are institutions.
This follows reports that Rwanda has managed to meet the shareholders’ capital requirements and other prerequisites.
James Musoni, the finance and economic planning minister cites one criterion as Rwanda’s sound macroeconomic environment and the fast developing financial sector.
Kenya, Tanzania and Uganda’s shareholding amount to 24.7 per cent. Rwanda is also expected to hold the same amount of shares. About 1,000 shares are equivalent to 10 per cent.
Other shareholders include SBIC-Africa Holdings, Standard Chartered Bank London and the African Development Bank.
It is expected that the business community and the government of Rwanda will reap-big from this achievement.
"The EADB would be very helpful to the development agenda of Rwanda," Musoni noted.
The benefits are likely to be in form of financial support and professional advice. It is hoped this would spur economic and social development activities in the country.
Given its experience in risk management and dealing with non-performing clients, the EADB will also offer technical assistance, advisory services or project preparation services.
Long term funding
The EADB being a member of the African Development Bank (ADB) and the World Bank can easily acquire long-term funds which it can provide to its members.
Very long-term loans, with interest well below market rates will also be accessed by EADB members. The funding is through direct contributions for governments.
Business community upbeat
The private sector of Rwanda is already optimistic that it will receive a wide range of options of funds for different projects.
"I am impressed to be part of that Bank (EADB)," said Robert Bayigamba, chairman of the Private Sector Federation (PSF). Adding: "With five strong private sectors, it will be a great achievement to get our mega projects funded."
Citing associations like Rwanda Investment Group (RIG), Eastern Investment Cooperation, Bayigamba advised the groups to exploit the funding opportunity.
The Kampala based East African Development Bank is expected to build business synergies with the Rwanda Development Bank (RDB) in co-financing already existing and new projects in the country.
Theogene Turatsinze, RDB’s chief executive however said it was too early to identify the projects that will be co- financed by EABD but he admitted that economically viable and sound ones (projects) will be identified soon. He added that EADB may also buy shares in some projects within Rwanda.
During his recent visit to Rwanda, the director general of the East African Development Bank, Godfrey Tumusiime said, the partnership will be—
investment in capital, lines of credit and joint financing for development projects.
The council also agreed that EADB goes ahead with its in-house equity fund to finance small and medium enterprises (SMEs) in the region.