The government of Rwanda has secured a $46 million loan under the World Bank’s Program for Results (P4R), the ministry of financing and economic planning said in a statement.
“[The funds] will contribute to the impact of achieving sustainable economic growth and reducing poverty given the fact that agriculture constitutes 33 percent of our GDP,” said Claver Gatete, minister of finance and economic planning.
The loan brings total amount raised through P4R to $146 Million, a World Bank spokesperson told Agri Investor.
The new loan was provided by the International Development Association, a complementary institution to the World Bank’s International Bank for Reconstruction and Development, established to help the world’s poorest countries by providing low-interest or interest-free loans with long maturities.
Rwanda will have 38 years to repay this loan and a six-year grace period. It is meant to help the country implement its Strategic Plan for the Transformation of Agriculture Phase III (PSTA 3), a program aimed at increasing the productivity of the Rwandan agricultural and livestock sectors and expanding the development of value chains. It is a five-year program covering the period from 2013 to 2018.
According to World Bank country manager for Rwanda, Yasser El-Gammal, this latest credit will go specifically towards enhancing irrigation, transportation as well as research and technology.
“Agriculture has a huge impact in Rwanda’s economy as it employs majority of the population,” El-Gammal said. “It is important that the sector is sustainable to positively impact the population.”
According to the statement, a portion of the funds will also support the Rwandan Ministry of Agriculture in developing new national agriculture policy and planning for the next phase of the plan, PSTA 4.
The new line of credit comes less than a month after the UK committed £5 million to the country’s agricultural sector. Those funds, provided by the UK’s Department for International Development, were also disbursed through the World Bank’s P4R program.
The Rwanda plan is one of 52 that the World Bank’s P4R program has approved since its launch in 2012. As of October 31, the 52 approved P4R operations total $12.9 billion of World Bank financing, supporting $60.1 billion of government programs, according to the World Bank’s website.