The European Investment Bank (EIB) has extended US$29.6million (€24million) loan to two local banks for financing small and medium sized firms in Rwanda.
The bank signed the US$19million loan with the Development Bank of Rwanda and another one with I&M Bank of Rwanda at US$10milllion.
In addition, the bank also signed a US$55.4million (€45million) long term loan with the Rwandan government to finance sewage and waste water projects in the capital Kigali.
The entire project, expected to cost US$118.2 million (€96 million), will be financed alongside the African Development Bank and the Rwandan government.
Present during the signing were Maria Shaw-Barragan, the EIB director responsible for lending operations outside Europe and senior representatives of the Development Bank of Rwanda and I&M Bank of Rwanda. Also present was the European Union Ambassador to Rwanda, Nicola Bellomo.
Barragan said the new investment, to be matched with the two institutions, will enable the country's entrepreneurs and businesses seeking to expand activity to benefit from long term loans in Rwandan francs and the US dollars.
"The European Investment Bank is committed to supporting private sector investment across Africa and we are pleased to build on previous successful lending initiatives with two leading Rwandan financial institutions," she said.
She added that the two new credit lines represents the largest ever support for private sector investment in Rwanda by the long-term lending institution of the EU in more than 40 years of its operations in the country.
Commenting on the new credit facility, Bellomo (the EU Ambassador to Rwanda) said the EU recognises the crucial role of private sector investment to support sustainable economic growth and reduce poverty.
"This new initiative by the European Investment Bank, the EU Bank, builds on a proven track record of helping companies across East Africa to expand, including here in Rwanda," he said.
"Technical assistance provided alongside the record new private sector lending will both strengthen financial services in Rwanda and financial skills within the Rwandan businesses."
Over the last years, EIB has provided over EUR 87million for the financing of small, medium and micro-enterprises across the country through dedicated lending programme managed by local banks.
In East Africa, the EIB has successfully supported private sector investments in conjunction with leading local banks in Rwanda, Kenya, Tanzania and Uganda through the recently extended Private Enterprise Finance Facility and working with regionally active banking groups.
Last year, the bank provided US$3.2billion (€2.6billion) for new investment across Africa. Projects supported belonged in the sectors of agriculture, energy, telecommunication, and transport and water infrastructure. It also supported the strengthening of microfinance lending and private sector investment across the African continent.
For the last 10 years, the EIB has provided more than €7.9 billion (US$9.7billion) for private sector investment across Africa - a move that has been welcomed by development oriented experts and leaders.