Rwanda’s capital Kigali is growing rapidly, placing strain on the city’s water infrastructure. Water rationing is common due to limited production capacity. The Government of Rwanda’s Economic Development and Poverty Reduction Strategy II highlights the need to improve public health and economic productivity. As part of this strategy, the government is committed to providing safe, clean water for its population and has worked to create a regulatory environment conducive to private investment in the sector.
To attract a private sector partner to address Kigali’s water shortage, the government engaged IFC PPP Advisory Services, with funding support from DevCo, to develop a PPP transaction. Following a competitive tendering process, Metito won a 27 year license to build, operate and transfer the 40,000m³ per day Kigali Bulk Water scheme in the city’s Kanzenze district. EAIF acted as the mandated lead arranger, coordinating the complex financing to make the scheme bankable. EAIF provided long-term debt alongside the African Development Bank, with Metito providing the balance as equity finance. TAF viability gap funding covered upfront capital costs, allowing the government to expand the number of people connected to a reliable water supply without raising tariffs.
PIDG companies made a significant contribution to the finance and structuring of Kigali bulk water as one of sub-Saharan Africa's first water PPPs. DevCo's involvement helped the IFC to structure the project, creating a benchmark for future transactions. EAIF led the arrangement of financing, providing a $40m, 18 year long-term loan jointly with the African Development Bank. It also coordinated $6.5m viability gap funding from TAF to reduce up-front costs and expand the number of people connected to a reliable water supply without raising tariffs. 150,000 customers are expected to benefit in the first phase.
Extracting and treating water from the Nyabarongo River, the scheme will provide around one third of Kigali’s water, delivering health benefits and meeting growing demand from households and water-dependent businesses. It is anticipated that reduced spending on public health and related productivity losses will enable the government to redeploy funds to support its wider economic development and poverty reduction agenda.
A digital representation of the Kigali Bulk Water plant in Rwanda
Connectivity by air is crucial for the movement of people and goods into and around Madagascar, and for accessing global markets. The Antananarivo and Nosy Be airports handle around 84% of the island’s passenger transport but require modernisation. The Government of Madagascar established the country’s first airport PPP to attract a private sector partner to carry out the works. However, securing long-term finance was challenging as commercial lenders appeared reluctant to invest in Madagascar. Alongside other DFI investors, EAIF provided a 16 year, €25m loan which financed a consortium of major private sector interests, Ravinala SA, to rehabilitate terminal and runway infrastructure to international standards and to manage the airports through a 28 year concession. The project is expected to increase passenger handling capacity by up to 1.3 million and runway improvements will enable large carriers to fly to Antananarivo for the first time. EAIF’s support has demonstrated Madagascar’s potential for future investment, tourism and trade.
Ravinala Airport, Madagascar