Rwanda Investment Group postpones $40 mln bond for cement

Rwanda Investment Group S.A. ( has temporarily suspended plans to issue a bond with a value of RWF 23.1 billion (US$40 million) to RWF 28.9 bln ($50 mln), in order to to finance a new cement factory. The group says costs may be high, due to low liquidity and high interest rates, according to a report in the local New Times ( newspaper.
RIG was set up in 2006 by 41 shareholders, comprising of 6 institutional investors, 4 mid-sized private companies, and 31 individuals, mainly Rwandese entrepreneurs. They contributed US$ 25.1 mln as start-up capital to capitalise the group.
The bond had been intended to finance the construction of the new cement factory for Cimerwa, in which RIG has a controlling stake. Earlier RIG had announced that it had signed an agreement with a Chinese manufacturer, Pengfei, to upgrade the fuel-fired plant into one that burns peat and to increase production from 100,000 metric tons to 600,000 metric tons. RIG Director General Fiacré Birasa was reported in the newspaper as saying the group will contribute 30% of the funding to build a $70m cement plant in Cyangugu. The rest is to be raised from other equity investors and other channels.
M. Birasa was reported as saying that RIG has put the plans on hold as they wait for better market conditions: “The market has high interest rates and as investors we should closely watch the trend, see the growth possibilities of having slightly low rates.” He also reportedly said the the $50m bond could be too much for local market capacity and that RIG was considering partnerships with regional and international stakeholders. “We are still holding because the market is not responding. RIG’s equity is $25m which is bigger than local banks’ liquidity.”
The Central Bank recently lowered its key repo rate (at which it lends to commercial banks) by 0.5 percentage points from 7.5% to 7% to boost liquidity.
Rwanda is set to hold presidential elections in August.

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