July 20, 2023: The Government of Rwanda and the Federal Republic of Germany today launched a pro-poor Basket Fund with an initial funding of €16 million (approximately Frw 20 billion) through KFW Development Bank. AFD should soon be providing an additional 16M€ loan to complement this support.
The objective of the basket fund is to support rural districts by financing relevant local infrastructure projects in order to improve living conditions of the citizens. It will focus on improving access to basic public services, provide employment opportunities, improve resilience to climate change and have positive impact on women.
The eligible districts to benefit from the pro-poor basket fund include: Gisagara; Nyanza, Ngoma, Nyaruguru, Gatsibo, Nyamagabe, Ruhango, Kamonyi, Rulindo, Gakenke, Burera, Gicumbi, Rytsiro, Nyabihu, Ngororero and Nyamasheke.
Funding will focus on three pillars: improve regulatory and operational framework for Local Economic Development (LED) projects; fund inclusive LED projects in rural districts; and offer technical support and capacity building to local entities.The Minister of State in charge of National Treasury, Richard Tusabe said: “The pro-poor basket fund comes to complement existing Government of Rwanda social economic development efforts under the ongoing National Strategy of Transformation. It will contribute to overall improved wellbeing of citizens in the respective districts through provision and access to services and employment opportunities.”
Ms. Birgit Pickel, Director-General for Africa at the German Federal Ministry for Economic Cooperation and Development (BMZ) said: “We appreciate the existing partnership between two governments, specifically in the areas of good governance. The Basket Fund for Pro-Poor Development is a financing instrument that will help local government entities support the most vulnerable people, have a positive impact on women and contribute to Leaving No One Behind”.”.
M. Arthur Germond, AFD Country director in Rwanda, said “Working together in Team Europe format is the most effective way to address the challenges faced by vulnerable communities. Through the Pro-Poor Basket Fund, we will foster a strong partnership between with Rwanda to support rural districts, improve livelihoods, and make them more resilient.”
Key eligible projects to be funded under the new basket fund will include: Water Supply, Sanitation and Health Infrastructure; construction of primary, secondary, nursery and day care centres and provision of scholastic equipment; rehabilitation of health centres, maternity rooms and purchase of equipment; construction and rehabilitation of feeder and access roads to important social and economic infrastructure; and construction of agriculture infrastructure such as radical terraces; post-harvest facilities as well as markets.
Projects that will access the funding will be selected through the Public Planning and Budgeting cycle be in line with the strategic planning of the line ministry, comply with LODA environmental and social management framework; be gender sensitive, be selected based on prioritization at the district level and meet eexisting climate resilient infrastructure guidelines among others.