African Development Bank mobilizes US$20 million loan to boost water supply in Kigali

21/12/2015
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The Board of Directors of the African Development Bank (AfDB) through its private sector window approved a USD 20 million loan to the Kigali Bulk Water Supply Project in Rwanda.

The project involves the design, building, operating and maintainance for 27 years a 40,000m³/day bulk water production facility comprising a water treatment plant, well field with existing and new wells, three storage reservoirs, three pumping stations and water pipelines (in total approx. 14km) located at Kanzenze, Kigali, Rwanda to be implemented on Public Private Partnership (PPP) basis.

The Project will extract groundwater at Kanzenze, close to the Nyabarongo River, treat water to required water quality standards and deliver water to service reservoirs for the distribution into the Kigali network of Water and Sanitation Corporation (“WASAC”).

 WASAC currently has to apply water rationing schemes as water production capacity is not sufficient to fulfil demand. Water demand in Kigali is currently estimated at approx.150, 000 to 200,000 m³/day, whilst WASAC produces only approx.110, 000m³/day. Furthermore, the population in Kigali is expected to double from its current 1 million to 2 million in 2020.

The project aligns with Rwanda’s Economic Development and Poverty Reduction Strategy and the country’s Vision 2020, which is articulated through the National Policy and Strategy for Water and Sanitation Services (2010); and the two operational priorities of the Bank’s Ten Year Strategy through developing sustainable water infrastructure and enabling private sector development. It also aligns with the Bank’s Private Sector Development strategy for supporting infrastructure development and thereby creating favorable environment for the private sector as well as the second pillar of the Bank’s Country Strategy for Rwanda by benefiting enterprises and institutions through providing improved water supply.

The project is expected to have strong development outcomes by: 1) providing clean potable water to the population therefore contributing to improving public health, 2) addressing Rwanda’s growing demand in industry sector for reliable water, 3) economic growth due to improved productivity particularly for women and redeployment of Government budgetary savings to the Health sector and other economic sectors. and 4) strong demonstration effect given this is the country’s first Independent Water Producer (“IWP”) project on a large scale in the continent therefore contributing to private sector development.

This project stands as an innovative structure as it is one of the first largest water supply PPP projects in Sub Saharan Africa as well as the Bank’s first private sector operation in the water sector. Furthermore, there is a clear rationale for the Project as it provides high quality, reliable and sustainable potable water to supplement existing water supply.