Kigali, 22 July 2021:   Minister of infrastructure, Hon. Claver Gatete officiated the Launch of the 17th Edition of Rwanda Economic Update themed “The role of the private sector in closing the infrastructure gap”.

This publication helps to monitor the performance of economic development across priority sectors in Rwanda.

In his remarks, Minister Gatete noted that the government has put in place enabling environment to encourage Private Sector Participation in the Multisector development and acceleration of growth as Rwanda envisions to become an upper Middle-Income Country by 2035 and a high-income country with GDP by 2050. This will require double digit growth rates over the period up to 2050.

“To achieve this, Rwanda will need to attract and sustain high private investment induced by domestic savings that are projected to increase up to 30% over the period of our Vision 2050”, Minister Gatete noted.

Minister Gatete highlighted examples of investments where Government of Rwanda partnered with private sector in energy, water, sanitation, transport and housing sectors.

In the Energy sector, the private sector, he said “has played a significant role in increasing access to electricity where Off grid access moved from 1% in 2012 to 15% in 2020 with more than 20 private Solar companies registered in Rwanda to provide solar home systems and mini-grids particularly in rural areas”

Minister Gatete said that to ensure that beneficiaries can have access to cheap loans the Government of Rwanda has also established renewable energy fund of USD 49 million under the support of World Bank.

Key private players like Independent Power Producers also played a considerable role in increasing electricity generation. These include; KivuWatt producing 26 MW from Methane gas, Hakan Developing 80MW from Peat, Shema power developing 56MW from Methane gas, Gigawatt operating 8.5MW from Solar, Rwanda Mountain Tea operating many Micro hydropower plants, Ngali energy developing Hydropower plants among others.

In the Water and sanitation sector, Minister Gatete noted that the GoR entered into a PPP arrangement with Metito for the construction of Kanzenze Water Treatment Plant, with installed capacity of 40,000m3/day.

“In sanitation, the whole value chain is operated by private sector and GoR is also in the process of establishing a PPP for proper management of Nduba landfill in Kigali”, he said.

In the Transport sector, the Government of Rwanda has partnered with Qatar Airways for the construction and management of Bugesera International Airport. In addition, the introduction of drones to assist in health services across the country is purely operated by private investors.

In the water transport, private sector we have seen involvement of in manufacturing of boats, operating maritime transport and tourism.

In the urbanization and Human settlement sector, private investors are being mobilized to invest in affordable housing and the Government provides basic infrastructure in the sites including access roads, electricity, water, street lighting, ICT. Affordable Housing Fund [USD 150 Mn] has also been established in BRD to leverage the construction of affordable homes.

The World Bank Country Manager for Rwanda, Rolande Pryce noted that if the entire amounts of infrastructure investment was to be financed by borrowing, public debt would increase to about 101 per cent of Gross Domestic Product by 2024 (compared to 78.1 per cent projected in baseline) and 132 per cent by 2030.

On the other hand, if the current infrastructure demands were to be funded through grants, the amount of grants would have to more than double, a scenario deemed highly unlikely.

Rwanda Economic Update: The Role of the Private Sector in Closing the Infrastructure Gap, observed that the domination of the public resources was unsustainable going forward a risks leading to a surge in debt and cost of living

The World Bank report notes that Rwanda needs to significantly mobilise private sector investments in infrastructure to meet development goals in the mid- and long-term.