KIGALI – The Development Bank of Rwanda (BRD) has reopened its second Sustainability-Linked Bond (SLB) in Rwandan francs, attracting an international investor for the first time in a local-currency sustainability bond issued on Rwanda’s capital market.
The additional investment, worth the equivalent of $11 million, comes from the African Local Currency Bond Fund (ALCB Fund), managed by Cygnum Capital.
The transaction is being seen as an important step in Rwanda’s efforts to deepen its domestic capital market and attract long-term foreign investment in local currency.
First-of-Its-Kind Structure in Rwanda
The participation of the ALCB Fund was made possible through a hedging solution arranged by The Currency Exchange Fund (TCX), which helps international investors manage exchange-rate risk in frontier and emerging markets.
The cost of the hedging arrangement was supported by the European Commission’s EFSD+ Pricing Facility and the SDG7 programme funded by Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK).
This is the first time such a structure has been used in Rwanda.
By enabling foreign investors to invest in Rwandan francs, the mechanism allows BRD to raise funding without taking on foreign exchange risk, while giving local borrowers access to long-term financing in their own currency.
BRD Expands Investor Base
BRD Chief Executive Officer Stella Rusine Nteziryayo said the transaction demonstrates that Rwandan issuers can tap global capital markets when the right risk-mitigation tools are available.
“This transaction is a milestone for BRD and for Rwanda’s capital markets,” she said.
“By mobilizing international capital in Rwandan francs, we have demonstrated that local-currency issuers can access a wider pool of global investors.”
Nteziryayo said the funds will support lending to sectors that create jobs, boost exports and manufacturing, expand affordable housing and strengthen women-led enterprises.
She added that the structure is fully aligned with Rwanda’s Vision 2050 and the National Strategy for Transformation (NST2), while also providing a model for future Rwandan-franc bond issuances.
Cygnum Capital Enters Rwanda Market
The deal marks the first investment in Rwanda by the ALCB Fund.
Cygnum Capital CEO Clemens Calice said the transaction reflects the fund’s confidence in Rwanda’s economic prospects and BRD’s role in supporting inclusive growth.
“We are pleased to have participated in this innovative transaction with BRD,” Calice said.
“The success of this transaction reaffirms our view that Rwanda’s potential and prospects are attractive.”
What the Institutions Do
The African Local Currency Bond Fund (ALCB Fund) was established by German development bank KfW in 2012 on behalf of Germany’s Federal Ministry for Economic Cooperation and Development (BMZ). The fund supports the development of African capital markets while channeling investment to transactions that benefit low-income households and small businesses.
Cygnum Capital, formerly known as Lion’s Head, is an investment bank and asset manager focused on frontier and emerging markets. It manages several investment funds and structures financing solutions tailored to development needs.
TCX (The Currency Exchange Fund) was established in 2007 and specializes in providing hedging instruments such as swaps and forwards to protect investors from currency fluctuations, helping unlock long-term local-currency financing.
About BRD
Established in 1967, BRD is Rwanda’s sole national development bank.
The bank provides affordable long-term financing to strategic sectors including infrastructure, agriculture, education, affordable housing, green finance, manufacturing and exports, with the aim of supporting sustainable economic growth and transformation.
