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ESG Report Shows Impact of Rwanda’s Investment Fund

by Daniel Sabiiti
4:11 pm

Some of the women awarded under the “Empowering Women Entrepreneurs” program run by MTN Rwanda- one of RSSB’s portfolio companies in Rwanda.

Rwanda Social Security Board (RSSB) has unveiled key insights into possibilities of using the new global investment model- environmental, social, and governance (ESG) as a way to create sustainable impact in Rwanda’s economy.

In a business context, ESG is often synonymous with the sustainability of a company’s business model. This pertains to how the company’s products and services actively contribute to sustainable development.

RSSB is Rwanda’s largest pension and investment fund with Rwf1.4 trillion in Assets Under Management, more than 30 equity investments, 15 real estate properties and projects under development and 20 portfolio companies from various sectors including financial services, agri-processing, hospitality & recreation, telecommunication, manufacturing and real estate among others.

The fund’s financials from the first 6 months show that RSSB’s net income had reached Rwf52.6 billion (with a more than 6% growth compared to the previous last year’s in the same first 6 months.

As of December 2023, RSSB net assets had reached Rwf2.14 trillion making a +7% growth compared to June 2023 (Rwf2.00trillion); while in the same period, contributions had reached Rwf190.7 billion (+10% growth) and benefits stood at Rwf88.2 billion (+14%).

While many Rwandans, who are the key stakeholders in these contributions may wonder where this money is and what it has benefited them directly or indirectly, RSSB presented the impact of this investment in numbers.

After a year of introduction of the ESG reporting framework with standardized metrics across its internal investment portfolio, on March 27, 2024, RSSB presented its ESG performance over the past fiscal year which showed that Rwandans pension funds have had direct impact to the community.

To gauge ESG performance across its portfolio, RSSB developed an ESG reporting initiative which aims to track and monitor various core ESG metrics across its portfolio companies, enabling an assessment of their baseline performance.

For example, in environment, the focus was on energy consumption, environmental solutions, waste management; Social: was on job creation gender equality, safety and well-being of employees, community and social vitality while on governance, the focus was on board composition, financial transparency, anti-corruption and Integrity.

In the environment segment RSSB managed to ensure 81% sustainable sources of energy used by its and portfolio companies’ business operations contributing to the country’s green growth agenda.

According the Rwanda Energy Group (REG)’s 2023 Annual Report, hydropower (which is renewable energy) remains the most dominant energy source within the main grid, contributing 41% in Rwanda’s energy mix.

RSSB also played a key role in the issuance of first ESG certified Sustainability Linked Bond (SLB) floated on the Rwandan stock markets in 2023 with Rwf10 billion invested in the Rwf30billion bond floated by the Development Bank of Rwanda (BRD).

Rwanda’s first ESG certified Sustainability Linked Bond (SLB) floated

This bond was oversubscribed by 110.59% and accumulated over Rwf1.5billion with 129 subscribers (majority being Rwandans) and proceeds from the bond issuance will primarily target critical sectors of the economy including: Agriculture, Exports, Renewable Energy, Social Infrastructure, Housing, Education and Digital Economy.

Also RSSB’s wholly owned subsidiary, Ultimate Developers Ltd (UDL), has been at the forefront of developing and managing commercial and residential real estates in Kigali city- which is currently designated as a model green city in Africa.

UDL’s Vision City II and Kigali Green Complex (KGC) which are under construction, have earned global acclaim from the International Property Awards for their sustainable development efforts.

The award recognizes their innovative design, renewable energy integration, waste treatment processes, and eco-friendly materials.

In social impact: There were 226,441 jobs (6.63%) generated by RSSB and its portfolio companies of total employment in Rwanda (3,412,870) and on gender inclusion, RSSB itself employed more women (58.3%) while only 32.3% employees in its portfolio companies were female, highlighting the imperative for enhanced diversification when compared to the formal sector which employs 37.5% women.

Louise Kanyonga demanded for more gender accountability in RSSB portfolio companies

Louise Kanyonga, the RSSB Deputy CEO said that there is need to do more work to increase gender inclusive employment in the fund portfolio especially at the entry, senior management and board levels and the figures are a way of demanding accountability therein.

RSSB and its portfolio companies also created impact through CSR activities intended to create positive societal impacts, for example through Education financing schemes, and initiatives such as the Cana Challenge, Connecting Women in Business but also financially supporting Female Basketball team (the Hoops) among others.

The Cana Challenge, a solar access initiative, was initiated by BRD to provide electricity access to over 15,000 households within remote areas, directly supporting the government’s goal of achieving universal electrification by 2024.

“The Cana Initiative has been very helpful to me and my family. It has helped my children to do evening studies and this has enabled them to succeed in school,” said Francoise Uwingeneye, a Cana Challenge beneficiary.

Philippe Watrin

Philippe Watrin, the RSSB Chief Investment Officer said that the institution remains committed to continue embedding the core ESG commitments into its business operations, especially in investment decisions.

“RSSB will strive to further strategize holistically, recognizing that integrating ESG considerations into our approach can yield positive outcomes and exceptional value creation for the contributors,” said Watrin.

Watrin stated that RSSB aspires to begin embedding core ESG commitments in its investment decisions, and before making an investment they will consider the ESG aspects which have to be identified in the future investment plans.

Regis Rugemanshuro, officiated the unveiling of the inaugural RSSB ESG Impact Report on March 27, 2024

The CEO of RSSB, Regis Rugemanshuro said this is the right, sustainable decision that RSSB has taken and this will complement Rwanda’s planned ESG framework which will be released this year.

Rugemanshuro said that using the ESG metrics will help RSSB to show its members where the money is invested and its impact which includes the environment, social and accountability aspects.

“You can make a lot of money doing wrong things, so our point is to make sure to show our members that we are investing responsibly. You trust us with your money to invest it on your behalf, but the additional conversation we are adding here is to tell them we are making the world you live in a better one,” Rugemanshuro said,

This focus on ESG informed investment decision could be a solution to RSSB’s previous issues where it appeared before the Public Accounts Committee (PAC) in 2022 to explain the long-standing concerns identified in the Auditor General’s report (2020/2021) over unproductive land that was purchased around the country but remained unused.

The AGs review of investment properties revealed that RSSB had acquired 17 plots worthy Rwf137.4 billion as at 30 June 2020 and those investments revealed some anomalies.

Some of those parcels of land were acquired with no specific business plans explaining the expected use of each one of them, while expenses were made incurred.

Kigali Green Complex is one of the major green growth projects in Kigali

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