The World Bank, on June 29, approved additional financing of $100 million (approx. Rwf116 billion) in a project that aims to provide financial relief for businesses in the post-pandemic era.
The financing provided through the Access to Finance for Recovery and Resilience project (AFRR) includes support towards a Sustainability Linked Bond issuance programme which will be issued by the Development Bank of Rwanda (BRD) to facilitate mobilisation of private capital.
The five-year project seeks to increase access to finance and support recovery and resilience of businesses affected by the Covid-19 pandemic. It runs on three pillars including liquidity and recovery facility, risk-sharing facility, and institutional strengthening and implementation support.
According to officials at the bank, the Sustainability Linked Bond programme will conform to BRD’s overall strategic objectives to promote sustainable economic development by relying on a specific and measurable framework.
This is the first time that the World Bank has done such an operation, and it will also be a first for a development bank globally. The bank remains an active partner in Rwanda’s development across sectors like education, agriculture, real estate, tourism, and ICT.
It commended Rwanda for leading the way regionally in terms of leveraging concessional finance to mobilise private capital. The country has been able to mobilise concessional loans from multilateral organisations for development purposes and this has allowed it to maintain a moderate debt level.
Issuing the sustainability linked bond will tap into a wider pool of debt markets and promote domestic capital development. Through the International Development Association (IDA), the World Bank has been supporting developing countries with concessional loans for projects that boost economic growth, reduce poverty, and improve people’s lives.
