The development Bank of Rwanda(BRD) has signed Rwf 15 billion financing agreements with five Kigali public transport operators for the acquisition of at least 120 buses.
In this agreement, the BRD will provide loans at 12% interest rate per annum, to be matured in five years, according to a communique from the bank.
The benefiting companies of the 70-sitter buses include RITCO, Remera Transport Cooperative, City Center Transport Cooperative, Nyabugogo Transport Cooperative.
The loan is part of the latest 30bn Frw Sustainability Linked Bond, which, according to the bank, was widely praised globally as an innovative financing instrument to support Rwanda’s Sustainable Development Goals.
It goes in the context of creating sustainable and liveable cities by empowering the private sector to invest in ease of mobility and efficient transport, which “is at the heart of BRD’s current strategy to achieve its development mandate.”
In this financing, BRD is contributing to the commitment of government of Rwanda which pledged to purchase 200 buses to improve public transport in Kigali as part of implementation of the 2023 Umushyikirano.
“Through this initiative, BRD is actively supporting the transport sector with flexible and tailor-made financing solutions to provide long-term and affordable asset backed finance to private bus operators,” part of a communique from the bank reads.
“According to official statistics, Kigali City needs over 300 buses to meet the ever-increasing demand for public transport sector and BRD stands ready to finance over 70% of the transport sector fleet supply.”
The bank believes that this will enable the bus operators to significantly expand their operations thereby solving partly the City of Kigali’s public transport development challenge.
This marks the first sector to benefit directly from BRD’s successful inaugural Sustainability Linked Bond issued and listed on the Rwanda Stock Exchange; this bond was hailed as a first of its kind by a National Development Bank globally and the first Sustainability Linked Bond in East Africa.
The Development Bank of Rwanda officials said that the bank has positioned itself to be an innovative and sustainable provider of long-term development finance for social-economic impact in Rwanda.
In a communique last week, the City of Kigali had said that the city was launching 100 buses that were acquired by eight transport operators under this arrangement.