BRD was established in 1967 to promote economic development in Rwanda. It has a capital base of RWF 3 billion ($5.5 million), shareholders’ funds of RWF 5.8 billion ($10.7 million) as of Sept 30, 2007 and its shareholders comprise the Government of Rwanda (48.12%), local public institutions (7.65%), development financial institutions, including DEG and FMO (33.75%) and the private sector (10.49%). A rights issue is underway to increase the Bank’s capital to $9 million equivalent. With the exception of the government and public institutions, all other shareholders have decided to increase their shareholding. As a result the government and government owned companies will see their equity reduced to around 40%.

BRD’s existing exposure to schools is about RWF 3.5 billion ($6.3 million); with IFC risk participation and technical assistance program it plans to double this to RWF 7 billion ($12.6 million) over the next 3 years. Assuming a first loss protection of 7% and IFC senior risk share of 40%, IFC’s maximum expected commitment to the program will be approximately $4.7 million equivalent.

4.78 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	4.78
Loan
Equity

* These investment figures are indicative

BRD is located in the Central Business District of Kigali, the capital of Rwanda.

The Government of Rwanda’s five year Education Sector Strategic Plan (ESSP 2006 – 2010) calls for increasing primary school enrolment rates and secondary school transition rates, currently 51% and 15% respectively. In this context, an array of actions have been planned to expand education services to all levels, with emphasis on basic education and on improving the quality of its services. These actions include; building and equipping classrooms, revising and adapting programs, training trainers and management personnel, providing textbooks, science and ICT equipment, with emphasis on science and technology education. Encouraging the private sector to invest in education and expand opportunities for increased numbers of students, particularly at secondary and higher levels is one of the strategies that the GoR has formulated to realize its goals in education.

The proposed investment will contribute to GoR’s development objectives by improving private Rwandan schools’ access to finance and terms of borrowing. Business development and planning advice as well as skill training to improve schools’ financial and operational management will enable efficient assessment by the bank and reduce the risk in lending to schools. In so doing, the facility will widen access and improve the quality of private schools in Rwanda.

The Facility is expected to have the following substantial impact on both the education and financial sectors:

- increased access for underserved markets and populations;
- improved quality of education services; and
- demonstration effect.

This investment has been classified as a Category FI investment according to IFC’s Environmental and Social Review Procedure. The applicable requirements are:

- The IFC FI Exclusion List(s);
- The applicable national environmental and social Laws and regulations, with special emphasis on life and fire safety.

IFC will also review, if required, the capacity of the FI to manage environmental and social risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS. Based on the review, the Sponsor will be required to:

- Develop and/or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities in the education sector are in compliance with the Applicable Performance Requirements;
- Commit to take action to remedy any gaps in SEMS implementation on an ongoing basis;
- Submit a periodic report to IFC as per a format to be provided by IFC on their education portfolio.