A Loan Agreement was signed today Tuesday 28^th May 2024 between the Republic of Rwanda and Kuwait Fund for Arab Economic Development, whereby Kuwait Fund will extend a loan of Kuwaiti Dinars (K.D.) 6 million (equivalent to about U.S.$ 19.8 million) to assist in financing Muhanga – Rubengera Road Project (Muhanga – Nyange Section). 

His Excellency Hon. Dr. Uzziel NDAGIJIMANA, Minister of Finance and Economic Planning signed the Loan Agreement on behalf of the Republic of Rwanda, whereas Mr. Waleed Al-Bahar, Acting Director-General signed the Loan Agreement on behalf of Kuwait Fund.

The Muhanga–Nyange Road Project aims at supporting the economic and social development of the Republic of Rwanda by providing reliable year-round land transportation in a tropical region, which is a section of the Muhanga – Nyange –Rambura – Rubengera National Road 15 (NR15) that connects the southern and western provinces with the capital city of Kigali through NR1. The road section starts at Muhanga, which is approximately 48 km south-west of the capital, and extends 24 km in a westerly direction to Nyange. The project will contribute to achieving a number of sustainable development goals (SDG's), the most important of which are: SDG 1 (No Poverty), SDG 2 (Zero Hunger), SDG 3 (Good Health and Well-Being), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), SDG 11 (Sustainable Cities and Communities), SDG 13 (Climate Action) and SDG 17 (Partnership for Goals).

The existing road of 6-meter width require additional land to widen the carriageway to 7.4 meters with 1.5-meter shoulders on both sides. The road works include installation of retaining walls and culverts of appropriate shapes and dimensions in 52 locations. The works also include the widening of the existing Nyabarongo bridge which is 120 meters long. The road is designed for 10-ton axle load and will be covered using asphaltic concrete. The works include road furnishings, markings, signage, and lighting to enhance driving safety. The Project also includes consultancy services for detailed design review, traffic safety audit, preparation of tender documents and implementation supervision.

The total cost of the Project is estimated at about Rwandan Franc 26.25 billion, equivalent to about K.D. 7.99 million. The Kuwait Fund loan will cover 75% of the total cost of the Project, whereas, the government of Rwanda will cover the remaining cost.

The term of Kuwait Fund Loan is 25 years, including a grace period of 5 years. The Loan is to be amortized in 40 semi-annual installments, the first of which will be due on the first date on which interest or other charges on the loan will be due, in accordance with the Loan Agreement, after the expiry of the above-mentioned grace period.  The Loan bears interest at the rate of 1% per annum in addition to a service charge of 0.5% per annum for meeting administrative costs and the expenses of implementing the Loan Agreement.

 With this loan, the Fund will have provided 11 loans to Rwanda, as the Fund has previously provided it with 10 loans to finance projects in various sectors with total amount of about K.D. 29.4 million, equivalent to about US$ 97.7 million, of which about K.D. 28.1 million, representing about 96% of the total value of the loans, have been disbursed, and about K.D. 8.3 million, representing about 30% of the disbursed amounts, having been repaid. In addition, the Fund has also provided Rwanda with a Technical Assistances of about 93 thousand Kuwaiti Dinars, equivalent to about US$ 307 thousand to finance a technical and economic feasibility studies for a project in transportation sector.