State Minister at the Ministry of Finance and Economic Planning, in charge of the Treasury, Richard Tusabe and BRD CEO Kampeta Sayinzoga right the bell as BRD floated its sustainability-linked bond on Rwanda Stock Exchange on Friday. Courtesy Photo.
The Development Bank of Rwanda (BRD) has listed its Sustainability-Linked Bond (SLB) on the Rwanda Stock Exchange (RSE) market to attract more investments that will spur development projects in sustainable environment, SMES financing and affordable housing mortgages.
The Rwf30 billion SLB bond, which is the first-of-its-kind to be floated by a national development bank globally, was unveiled by the Minister of State in the Ministry of Finance and Economic Planning (MINECOFIN) in charge of the Treasury, Richard Tusabe, who said that the bond is a ground-breaking initiative that demonstrates the commitment of the Government of Rwanda to promote sustainable development.
“I would like to commend our development bank for their innovative approach to sustainable finance. This bond is a game-changer in the world of sustainable development, and I have no doubt that it will set a new standard for other financial institutions to follow,” Tusabe said.
He pointed out that the bond provides an opportunity for investors to support projects that have a positive impact on the environment and society. Tusabe added that the proceeds from this bond will be used to finance projects that add value to the economy.
The Minister of state in charge of National Treasury, Richard Tusabe said that this bond is a ground-breaking initiative that not only demonstrates our commitment to sustainable development but also provides an opportunity for investors to support projects that have a positive impact on the environment and society.
“I would like to commend our development bank for their innovative approach to sustainable finance. This bond is a game-changer in the world of sustainable development, and I have no doubt that it will set a new standard for other financial institutions to follow,” Tusabe said.
Tusabe stated that the proceeds from this bond will be used to finance projects that
RSE Chief Executive Officer, Pierre Celestin Rwabukumba said that this is a big milestone for Rwanda and since the product is on sustainability, a trendy topic, which is here to stay for a long time.
“For our market it is also a big milestone because it is the first product coming to us and there are many more in the coming months and years because the framework has been put in place. Am sure the BRD one is a good one because they have a good reputation and performance,” Rwabukumba said.
The bond, issued in partnership with the World Bank, is the first tranche of the bank’s Rwf150 billion proposed Medium Term Note (MTN) program and this will be done for the next five years with different bond features (and prospectus).
Rwabukumba (centre) said the bond is a major milestone for BRD and the country.
The primary SLB bond issuance to investors was launched on September 29, 2023 and it was over subscribed by 110.59% and accumulated over Rwf1.5billion with 129 subscribers (majority being Rwandans).
RSE trading bells sounded this Friday morning at the RSE trading platform to officially launch the issuance of the bond on the secondary market which will have a coupon interest rate of 12.85% per year, for seven years and be selling at Rwf100,000 per bond.
According to BRD, this bond was over subscribed because of attractive interest rates, being a certified bond complaint with Environmental, Social, and Governance (ESG)- (which is a very important aspect) and also because many Rwandan investors are interested in contributing to sustainable development initiatives.
BRD Chief Executive Officer, Kampeta Sayinzoga said that the intention of issuing the bond on the RSE market was to extend it to many more retailers and the business community to invest in the bank so that it can invest in the country for more years.
Sayinzoga stated that the listing of the bond on the RSE is a win-win situation as it is an opportunity for Rwandans to invest in a bond that gives them returns but also that benefits the country.
“If you look at the key performance indicators that are linked to the bond, they are going to help us all as Rwandans. So, if we do better around environment and social management, increase access to finance and affordable housing,” Sayinzoga said.
Sayinzoga said BRD said people who were botwill have access to the
She stated that this is not a one off, and BRD is planning to come back on the market (bourse) again and again to raise more bonds.
“So for those who didn’t manage to participate in this bond issuance, this is not the last one, but also by having the bond listed on the stock exchange, they get a chance to access the bonds via their brokers and participate in the secondary market,” she said.
With this bond trading on the local bourse, BRD expects to contribute to fostering the capital market development in the country by bringing a new asset class to Rwanda’s stock markets and attract investors who prioritize sustainable investments and contribute to the achievement of global sustainability targets.
RSE revealed that BRD’s entry will add to price movement (trading) on the market which has been resilient with a 3% growth on the All Shares Index (ALSI) and a growth in turnovers (33%) despite a drop in volumes of the equities market.
The RSE CEO also revealed that tentatively, in the product development indicator, there are three more newcomers besides BRD, coming in the next few months whose details are to be made clear before the end of the year.
Carine Twiringiyimana, the Capital Markets Authority (CMA)-Rwanda said that BRD managed to fulfill requirements of offering a public issuance and this was with the guidance of the transactions advisor- BK Capital.
