The World Bank Group today launched the Development Finance Forum in Kigali, Rwanda, for global public and private sector leaders to explore and demonstrate strategies to boost private sector investment in East Africa’s priority sectors, notably, housing, agriculture and tourism.
Highlighting the efforts by the World Bank Group to mobilize private investment, the forum hosted the signing of an IFC agreement that envisions developing affordable housing in Rwanda with Chinese construction giant Broad Homes Industrial International.
The proposed financing plans to use the recently created International Development Association’s (IDA) Private Sector Window to mitigate risk and encourage commercial investment in the housing sector.
The two-day Development Finance Forum was inaugurated by President Paul Kagame, who spoke about Rwanda’s efforts to increase private investment by creating a business enabling environment, where companies can thrive and contribute to local economic growth. This year’s forum marks the fourth edition of the event, and was attended by more than 300 participants, including representatives of governments, and leading companies.
The agreement signed today demonstrates a new World Bank Group approach to encouraging investment in Africa. Broad Homes envisions partnering with IFC, the Rwanda Social Security Board, the Development Bank of Rwanda, and BSMART Technology – a leading research, development and design firm – to develop over 10,000 housing units in the Kinyinya district of Kigali. The project, which consists of residential and commercial units, would be expected to benefit nearly 50,000 members of the Kinyinya community. The total project cost is estimated to be over $200 million.
Karin Finkelston, IFC’s Vice President for Partnerships, Communication and Outreach said, “The private sector can play a central role in addressing housing shortages in Africa’s growing towns and cities. IFC supports projects that mobilize global expertise in housing construction and design, to increase the supply of high quality, affordable homes in Africa Our partnership with Broad Homes plans to on the IDA Private Sector Window, a tool that enables us to hasten private sector solutions by addressing commercial constraints.”
Over the past two years, the World Bank Group has developed several innovative products to crowd-in private finance for development. In December 2016, the World Bank Group’s IDA completed a record $75 billion replenishment, a pivotal step in the movement to end extreme poverty. $45 billion of this is targeted to Africa.
A groundbreaking new initiative under IDA18 is the new $2.5 billion Private Sector Window (PSW)—a joint initiative of IDA, IFC, and MIGA—to mobilize private sector investments with strong development impact in the most challenging areas: those countries eligible for IDA support and post-conflict environments.
“The Development Finance Forum is an action driven gathering to facilitate a dramatic scale up of private investment in Africa”, said Axel van Trotsenburg, World Bank Development Finance Vice-President. “Increase private investment is a must to cratering jobs in Africa. The World Bank Group is fully committed to support this effort to this end and is going to invest over 50 billion dollars to African development within a three-year period” he added.
Over the past decade, IDA, IFC, and MIGA have together supported more than $100 billion in private sector investment in IDA countries to create an enabling environment, make complementary investments, provide guarantees, and directly invest in the private sector.
“African governments have ambitious plans for drawing in private sector investment,” said Vijay Iyer, Vice President and Chief Operating Officer of MIGA. “We are committed to supporting this aspiration by helping reduce risk for foreign investors and lenders. The Development Finance Forum provides us with a platform to bring together business, government and development partners to find solutions for scaling up quality private investment in Africa.”
The Development Finance Forum will help create a pipeline of projects and programs by offering a pre-investment platform for the public and private sectors to explore new markets and opportunities.