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Rwanda: IFC Increases Support for Private Education
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International Finance Corporation (Washington, DC)
PRESS RELEASE
23 May 2008
Posted to the web 23 May 2008
Kigali
IFC, a member of the World Bank Group, will support lending to schools and education services providers in Rwanda, in partnership with Banque Rwandaise de Développement. This is the first initiative of its kind in Rwanda, which is designed tohelp improve the business environment for private education.
IFC will invest up to 2.6 billion Rwanda francs (about $ 4.8 million) in a risk-sharing facility, which will enable the bank to increase its education portfolio to 7 billion francs (about $ 13 million). IFC is also designing a comprehensive advisory program to help strengthen the financial, management, and educational capacities of private schools and develop an independent provider of education services. IFC will also provide advisory services to help the bank build capacity to conduct due diligence ofeducational institutions and monitor its portfolio.
Despite a strong demand for private education—a priority for the Rwandan government—most private school operators do not have access to long-term loans locally. This hinders their ability to grow or operate effectively. The new risk-sharing facility will provide local operators with access to long-term financing and enable them to build additional facilities and purchase equipment.
IFC will share the risk with Banque Rwandaise de Développement. This initiative is modeled after similar facilities in Ghana and Kenya, where IFC has also mobilized local currency financing in support of private education.
Théogène Turatsinze, Director General, Banque Rwandaise de Développement, said, “This partnership gives us the opportunity to expand our support for Rwanda’s education sector, while minimizing risk. It will enable us to increase our education portfolio, develop further expertise in the sector, and help private schools expand operations.”
Thierry Tanoh, IFC Director for Sub-Saharan Africa, said, “This initiative demonstrates IFC’s effective combination of investments and advisory services in undertaking small-scale projects that have a high development impact.”
Guy Ellena, IFC Director for Health and Education, said, “Working with a local financial institution enables IFC to reach a larger number of schools than we could have done directly. This investment will help the Banque Rwandaise de Développement lower its risk. We hope this approach can be replicated throughout Africa.”
IFC’s strategy in Rwanda focuses on mobilizing direct investment in key sectors, including tourism, infrastructure, financial markets, agribusiness, and construction to maximize impact. IFC also supports local small and medium enterprises through advisory services, helping build entrepreneurial skills, improve the business climate, and increase access to finance with innovate products such as leasing and trade finance.
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In FY07, IFC committed $10 million to investments in Rwanda, thereby growing its investment portfolio to $10.8 million as of June 2007.
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