Announcement of IDA Provides Second Credit of Five Million Two Hundred Thousand Dollars to Rwanda for Development Bank Project on April 26, 1979

FOR IMMEDIATE RELEASE •World Bank 1818 H Street, N.W., Washington, O.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 79/61 April 26, 1979 IDA PROVIDES SECOND CREDIT OF $5.2 MILLION TO RWANDA FOR DEVELOPMENT BANK PROJECT The International Development Association (IDA), the World Bank's affiliate for concessionary lending, has approved a credit of $5.2 million to the Republic of Rwanda for a second development bank project. The Government of Rwanda will onlend $5 million of the IDA credit to the Banque Rwandaise de Developpement (BRD) at an interest rate of 6% per annum. The funds will help to finance 67% of the foreign exchange re- quirements of BRO for 1979 and 1980. BRD will use the funds for fixed capital investment and initial working capital required by its borrowers for subprojects, regardless of ownership,that will be based o~ local re- sources or promote substitution of locally produced foods for imports. BRD • will finance about 40% of the investment of subprojects. Total commitments under the project are estimated at $15 million. About 400 new jobs are expected to be created. A feasibility study will also be made, under the Ministry of Finance, for the establishment of an auditing firm. BRD was established in 1967 to encourage the creation and devel- opment of productive enterprises in Rwanda through the provision of long- and medium-term loans, guarantees, and/or equity participation. It is the only institution providing term financing in Rwanda, and has played a significant role in financing investment, particularly in the private sector. Rwanda, even though it is one of the least developed countries and landlocked, is at the beginning of a period of significant industrial growth. The government is giving priority to the development of industry, second only to agriculture. As of December 31, 1978, BRD had a substantial pipeline of pro- jects which included 25 projects involving total investments of $30 million, of which BRD was expected to provide $10 million. These projects included manufacture of batteries, metal products, textiles, matches, pyrethrum re- fining, fruit juice, metal workshops, tea factories, plastic pipes, and photo processing. Thus BRD is forecasting a steady growth of about 15% a year in its lending and support to productive enterprises. The first IDA credit for $4 million to BRD, in 1976, is being used to finance several subprojects, including one for mine rehabilitation, plastic utensils, a soap factory, and a garage for automobile repairs. • The IDA credit to Rwanda of $5.2 million is for 50 years, includ- ing a grace period of 10 years. It will be interest free but will carry a service charge of 3/4 of 1% to cover IDA's administrative costs. NOTE: Money figures are expressed in U.S. dollar equivalents.