The governments of Rwanda and India Tuesday signed a concessional loan agreement worth US$66.60 million (about Rwf56 billion) for the construction of Base-Butaro-Kidaho tarmac road in Rwanda's Northern Province.
At an event held at the headquarters of the Ministry of Finance, the Minister for Finance and Economic Planning, Dr Uzziel Ndagijimana, signed on behalf of the Rwandan government while Tarun Sharma, General Manager and Regional Head of India Export Import Bank (EXIM), represented the Government of India.
Located in the Northern Province, the 63 kilometer road project will connect Rulindo and Burera districts and facilitate tourism and increased economic activity, officials at the ministry said.
The road will connect the rest of the country to the touristic hub of Burera, and Ruhondo lakes, the University of Global Health Equity (UGHE), a Cancer Reference Hospital in Butaro, as well as link to Uganda through Cyanika border crossing.
Speaking after the signing of the agreement, Minister Ndagijimana pointed out that Rwanda has put emphasis on the development of transport infrastructure and services to encourage economic growth in a bid to achieve the objectives set by Vision 2020.
"Transport plays an important role in stimulating economic growth by increasing internal production and facilitating access to domestic and international markets while ensuring favourable conditions for provision and distribution of imported products within the country," the minister said.
The Base-Butaro-Kidaho road development project is in line with the 10-year Rwanda Transport Master Plan adopted in 2012. The road is a single carriage with a construction period of two and a half years.
Officials said that construction of the road is due to start in 2019 and will be implemented by Rwanda Transport Development Agency.
Under the financing modalities in the agreement, the loan signed yesterday carries a 1.5 per cent interest rate and will be serviced in 25 years with a grace period of five years.
Bilateral cooperation between India and Rwanda has been warm, mainly based on agreements in trading, agriculture, ICT, and energy, officials said.
Sharma said that India is encouraged by Rwanda's development trend and wants to be part of the country's growth process.
"The kind of progress that Rwanda is showing in terms of development is very encouraging," he said at the signing yesterday.
Rwanda's cooperation with India Exim Bank started in 2011 with the signing of an $80-million line of credit for the Nyabarongo hydro power project currently on the grid and expected to generate about 27MW. The project was completed and handed over to Government in early 2015.
Then, in 2013, a $120.05-million loan was extended for the Export Targeted Modern Irrigated Agricultural Project in Eastern Province's Kirehe District and the project is on-going.
The bank has also funded projects in education, with the Government of Rwanda and India's EXIM Bank signing in May 2017 an agreement worth US$81 million to be used for the construction in Rwanda of modern training and production workshops, including equipment for 10 new vocational training centres and four business incubation centres.