US $12 million loan signed with IFAD

The International Fund for Agricultural Development (IFAD) and the government of Rwanda recently signed an agreement for a US $12 million loan on "highly concessional terms" to finance a "twin" project aimed at the development of community resources and infrastructure in Rwanda's northeastern Umutara Prefecture.

A news release from IFAD dated 28 March reported that IFAD's vice-president, John Westley, and the secretary-general of Rwanda's Ministry of Finance and Planning, Benon Karenzi, had signed the agreement at IFAD's headquarters in Rome.

The new twin project area accounts for almost 180,000 people, or 42,000 households, who have been provided with plots of land and imidugudu (community) housing in Mutara Municipality, Umutara Prefecture, and three districts not covered by the initial project, the release said.

"As IFAD is now in a position to extend its assistance to every district of Umutara province [Prefecture], the target group in the new project area will comprise all poor people (about 35,000 households in all) living at or below the poverty line," the release said, adding that of these, the most vulnerable or very poor accounted for about 7,000.

"The vast majority of the population currently have little opportunity to better their lot, and are poorly serviced by a public administration that was only recently put in place and lacks the means to operate effectively," it said.

In line with the government's decentralisation policy and administrative reform, the twin project will support both the establishment of community infrastructures and a range of production and development activities, the release noted.

IFAD's main objectives are to: set up sustainable micro-finance institutions in the rural areas; introduce new participatory mechanisms for the development and transfer of technology; encourage the emergence of small and medium enterprises to provide alternative sources of income and create job opportunities and support women, the release said.

In addition to ensuring that rural women take an active part in all project activities, a women's investment fund will be set up and a "women's centre" built in all districts of the project area, it added.

The cost of this IFAD-initiated project is estimated at $24.2 million, of which the Fund will provide co-financing equal to 50 percent of the total. The project will also be co-financed by the Organisation of the Petroleum Exporting Countries (OPEC), which will give $8 million, the government of Rwanda, which will give $2.5 million, a number of international and nongovernmental organisations will give $534,000, while the beneficiaries themselves will give $1.2 million, the release stated.

To date, IFAD assistance to Rwanda in the form of loans and grants amounts to $80.57 million, according to the release.