AfDB and Rwanda sign financing agreements to support skills development in the energy sector and local government revenue mobilization

18/12/2013
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The African Development Bank (AfDB) and Government of Rwanda signed on Monday, December 16, 2013, in Kigali, two financing agreements to support skills development in the energy sector and local government revenue mobilization. The Fund for African Private Sector Assistance (FAPA) has provided US $800,000 to support the development of critical skills in the energy sector in line with the Government’s objective of increasing the energy generation capacity from the current 110.8 MW to 563 MW by 2017-2018. The technical assistance for skills development in the energy sector is a joint operation initiated by the Bank’s Private Sector and Human and Social Development Departments. Support from the Governance Trust Fund (GTF) amounting to US $482,700 will be used to establish a modern and efficient local government revenue management system in three urban local governments – the districts of Gasabo, Nyarugenge and Kicukiro – to improve tax administration and collection in tandem with the country’s goal of reducing its dependence on donor aid. Claver Gatete, Rwanda’s Minister of Finance and Economic Planning, and Negatu Makonnen, AfDB Resident Representative in Rwanda, signed on behalf of the Government and the Bank, respectively.

The overarching goal of the FAPA technical assistance grant is to finance certain expenditures required for Rwanda Skills Development in the Energy Sector that will contribute to increasing the competitiveness and productivity of public and private companies operating in the energy sector, through the provision of employable and skilled human capital. The assistance is timely within the implementation of the Rwanda’s Poverty Reduction Strategy and reforms in the Education Sector, through responsiveness in matching skills needs to emerging and priority economic sectors, while also catering to youth employment. Support from the GTF will fund the four key activities including: customization of a revenue management software license; installation of the software and conducting robustness tests in the three districts; development of business processes for the revenue management system; and conducting change management for tax administration staff in the three districts and Rwanda Revenue Authority staff in charge of local government taxation. In addition to improving local government revenue mobilization, the Rwanda automated local government revenue management system is expected to improve access to local government revenue information through an online portal allowing local citizens to hold their leaders accountable on the utilization of these revenues, and thus improve demand-side accountability and public service delivery.

The Fund for African Private Sector Assistance (FAPA) is a multi-donor thematic trust fund that provides grant funding for technical assistance and capacity building to support implementation of the Bank’s Private Sector Development Strategy. The Government of Japan, African Development Bank, the Austrian Development Bank and the Government of Austria are the contributors to the FAPA, which to date has provided US $42 million to 47 projects across the African continent. The FAPA portfolio includes regional and national projects in sectors such as business enabling environment, financial intermediation, infrastructure, trade and micro-, small- and medium- enterprises. The Governance Trust Fund (GTF) is also a multi-donor thematic trust fund that was established in 2010 with the aim of assisting the AfDB’s regional member countries (RMCs) to build capable and responsive states by strengthening transparency and accountability in the management of public resources, in line with the Bank’s Governance Action Plan (GAP). Specifically, the GTF supports innovative ideas in the field of economic and financial governance that demonstrate potential to promote change and achieve results within the context of the GAP. The fund is supported by total financial commitments of US $6.8 million from the Governments of Norway, Sweden and Switzerland, and the Nordic Trust Fund for Governance and has provided support to 21 projects across the African continent.