Announcement of 9.3 Million Dollars Credit for a Highway in Rwanda on June 15, 1970

Q'·'·'' I'. LO/',lr l:'i,), • INTERNATIONAL DEVELOPMENT ASSOCIATION (~) 1818 H STREET, N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 70/31 Subject: $9.3 million credit for a June 15, 1970 highway in Rwanda A credit of $9.3 million from the International Development Association will help finance the construction of an international road link for Rwanda, a land- locked country, improving access to world markets for its products and contributing to the growth of its domestic trade. Under the project, which has first priority in the Government's highway development program, a paved road will link Kigali, the capital, to the road network of Uganda, which leads to Kampala, the market center and transshipment point in Uganda for most of Rwanda's imports and exports. ~ Rwanda is located about 1,085 miles from the nearest port and must depend o~ neighboring countries for access to the sea. Since transport costs on foreign trade absorb as much as 35% of Rwanda's export earnings, any reduction offers a direct benefit to the national economy. The main traffic routes for imports and exports have been through Uganda-Kenya and Burundi-Tanzania to the Indian Ocean ports of Mombasa, in Kenya, and Dar es Salaam, in Tanzania. In 1967 and 1968, 92% of Rwandese exports, mainly coffee! and 85% of imports moved over the route to Kampala and on to Mombasa. The present route to Kampala, via Kakitumba, extends about 36% miles, and is partly over an unengineered earth and gravel road. The new road via Gatuna, will shorten the distance to Kampala by about 45 miles. International traffic, growing at a fast pace, is expected to be diverted to the new road as a result of lower transport costs, combined with convenience and safety. • The project is the first Bank Group operation in Rwanda, and is based on a feasibility and detailed engineering study financed by the European Development /more IDA P.R. No. 70/31 - Rwanda -- Highway • 2 - Fund. Pending the reorganization of Rwanda's highway maintenance ser.vices, some • interim equipment to improve the effectiveness of road maintenance operations will be provided under the project. An engineering and highway maintenance study is currently being partly financed by the United Nations Development Pro- gramme. with the Bank as Executing Agency. The project will be executed by the Department of Roads and Bridges, a Government agency responsible for construction and maintenance of national high- ways, and is scheduled for completion in 1974. It is estimated to cost $10:9 million equivalent, of which $9.3 million will be financed by the IDA credit and the remainder by the Government of Rwanda, which is receiving a contribu- tion from the Belgian Goverrunent to help meet local costs. The IDA credit will be extended to the Republic of Rwanda for a term of • 50 years, including 10 years of grace, interest-free, but with a service charge of 3/4 of 1% to cover IDA's administrative costs. - 0 - •