EIB signs €100m to scale-up funding to Rwanda’s private sector

The European Investment Bank (EIB) has recently signed a €100 million facility to scale up funding to Rwanda's private sector. In an exclusive interview with CNBC Africa, Thomas Ostros, Vice President of EIB, discussed the bank's strong partnership with Rwanda and their commitment to supporting various projects in the country. Ostros highlighted the EIB's participation in the East Africa banking forum, where they engaged with private sector representatives and signed a deal with the Bank of Kigali to support agriculture, small hold farmers, and small and medium-sized enterprises. This move underscores a strategic focus on enhancing the private sector in Rwanda. EIB's dedication to green financing was also a key point of discussion, with Ostros emphasizing their role as the world's most advanced international development bank in climate financing. He highlighted the bank's efforts to promote green initiatives in Africa, such as providing technical assistance for greening the financial system. Ostros acknowledged the significant opportunity for renewable energy development in Africa, citing examples like Kenya's renewable energy system, which could catalyze economic growth in the region. The EIB's commitment to supporting private sector development in Africa was underscored, with approximately €4 billion in lending allocated to the continent annually, with nearly half of that dedicated to private sector initiatives. Ostros emphasized the bank's diverse toolbox, including equity funds, intermediate lending, and corporate financing, to address the financing needs of various projects. However, Ostros also acknowledged the challenge of identifying bankable projects, noting the importance of partnerships with private sector institutions to foster sustainable projects with long-term viability. In light of global macroeconomic challenges, including inflationary pressures and geopolitical tensions, Ostros highlighted the need for stability in the economic system. He pointed out that the current environment, characterized by persistent inflation and high interest rates, poses challenges for the private sector, particularly in Africa. Additionally, the fiscal constraints faced by many African countries, exacerbated by the impact of COVID-19, underscore the importance of leveraging private sector partnerships to unlock economic potential. As EIB continues to navigate the evolving economic landscape, Ostros emphasized the bank's commitment to supporting sustainable and impactful projects in Africa, with a focus on promoting green financing and fostering partnerships that drive economic growth and development.