Rwanda receives soft loan worth $20 million from Saudi Arabia for electricity project
NAIROBI, Kenya - The Saudi Fund for Development (SFD) and the Government of Rwanda has signed an agreement to finance an electricity project that will connect 60,000 households in the Southern and Northern Provinces of Rwanda.
The agreement for a concessional development loan of $20 million (Approximately Rwf23.3 billion) was signed in Kigali this July 11, 2023, between SFD Chief Executive Officer, Sultan Abdulrahman Al-Marshad and Rwanda’s Finance Minister, Uzziel Ndagijimana.
The soft loan agreement will boost connectivity and access to electricity in Muhanga, Kamonyi, and Gakenke districts, by constructing distribution lines for medium to low-pressure lines and by distributing transformers.
“Based on the cooperation, we hope that this project will be a source of development and bring benefits to Rwanda and its people to achieve sustainable development goals,” Sultan Abdulrahman Al-Marshad said at the signing.
The financing is payable within 25 years with a grace period of 5 years and a 1% interest rate will defy the odds in access to electricity. For example, Kamonyi District currently stands at 58.9% access to electricity. At the completion of this project, electricity will increase by 6.8% in the district.
Such financing is expected to increase economic and social development within the NST1 framework and also enable Rwanda to reach the 100% target of access to electricity by 2024.
Felix Gakuba, the Managing Director of Energy Development Corporation Limited (EDCL) said that by the end of this year, Rwanda will, through financing projects achieve 450, 000 new connections which will bring the country to 70 percent connectivity.
Saudi Fund for Development has contributed to Rwanda’s economic development by financing various vital projects and developmental programs.
Since 1976, SFD financed 12 projects with a total value of approximately $141 million and advanced toward the desired economic and social objectives to achieve sustainable development goals.