Rwanda, AfDB Sign Partial Credit Guarantee to Boost Green and Social Financing

The partnership between the AfDB and the Government of Rwanda exemplifies the commitment to fostering sustainable and inclusive economic growth across Africa.

The African Development Bank (AfDB) and the Government of Rwanda have inked a partial credit guarantee agreement designed to bolster Rwanda’s efforts in mobilizing financing for green and social initiatives. The agreement, a significant step towards sustainable development, was formalized during the AfDB’s Annual Meetings by Solomon Quaynor, AfDB’s Vice President for Private Sector, Infrastructure and Industrialisation, and Dr. Uzziel Ndagijimana, Rwanda’s Minister of Finance and Economic Planning.

Key Highlights of the Agreement

Partial Credit Guarantee:

The Board of Directors of the African Development Fund approved the partial credit guarantee in April 2024.

The guarantee will enable Rwanda to raise up to €200 million from international commercial banks, thereby diversifying its funding sources.

Innovative Financing:

This initiative is part of AfDB’s innovative approaches to assist countries in leveraging their African Development Fund allocations.

The partial credit guarantee has already facilitated a $200 million loan agreement with JP Morgan, secured with a $50 million partial guarantee.

Strategic Alignment and Goals

Support for Vision 2050:

The agreement aligns with Rwanda’s Vision 2050 and its National Strategy for Transformation (2017-2024), focusing on green and inclusive growth.

This financing strategy establishes Rwanda as a credible sustainable borrower and helps build a solid track record in international financial markets.

Promoting Inclusive Growth:

Solomon Quaynor emphasized the importance of the partnership in promoting green and inclusive growth in Rwanda. The AfDB’s Ten-Year Strategy (2024-2033) aims to accelerate inclusive green growth and foster resilient economies across Africa.

Statements from Key Figures

Dr. Uzziel Ndagijimana, Minister of Finance and Economic Planning, Rwanda: "The Government of Rwanda appreciates the partial credit guarantee as an innovative initiative of the African Development Bank to support countries to leverage their African Development Fund allocations. This agreement marks a significant milestone in our efforts to mobilize sustainable financing and promote green and social initiatives in Rwanda."

Solomon Quaynor, Vice President for Private Sector, Infrastructure and Industrialisation, AfDB: "We are delighted to continue our partnership with the Government of Rwanda in its efforts to promote green and inclusive growth in line with its Vision 2050. This guarantee from the African Development Fund will enable Rwanda’s inaugural access to financing under its Sustainable Finance Framework at competitive terms."

Impact and Future Prospects

The partial credit guarantee is expected to have a substantial impact on Rwanda’s ability to secure sustainable financing. By providing a credible guarantee mechanism, the AfDB is helping Rwanda attract competitive international financing, thereby supporting the country's ambitious green and social projects. This collaboration not only enhances Rwanda’s financial credibility but also sets a precedent for other African nations seeking innovative financing solutions for sustainable development.

The partnership between the AfDB and the Government of Rwanda exemplifies the commitment to fostering sustainable and inclusive economic growth across Africa. As Rwanda continues to implement its Vision 2050, the support from AfDB and the successful mobilization of funds through this agreement will play a crucial role in achieving the country's long-term development goals.