Kagame Signed US$100 Million Indian Loan To Build Special Economic Zones

The Rwandan head of state Major-General Paul Kagame speaking in Rwandan parliament on September 19, 2018.

By David Himbara

General Paul Kagame is into large loans to build large projects in the capital city, Kigali. Kagame just acquired another mega loan as indicated by his Presidential Order No 51/01 of May 20, 2019. Kagame’s decree ratified the loan agreement between his regime and the government of India via the Export-Import Bank of India. The loan amount is US$100 million. The purpose of the loan is to develop ”two special economic zones and the expansion of the Kigali Special Economic Zone”. The loan period is 25 years; repayment begins in 5 years from now.

Contractors restricted to Indian companies

According to the loan agreement, ”the bidding should be restricted to Indian companies registered in India and or incorporated under any law in force in India.”

What kind of economic zones are built by US$100 million?

Kigali Special Economic Zone

Special economic zones (SEZs) are typically packages of strong incentives aimed at attracting foreign direct investments. SEZs provide infrastructure, such as land and access to utilities including water and electricity. Other facilities provided in SEZs may include prefabricated factory units and warehouses.

My question is — what kind of infrastructure is Kagame building in his SEZs to warrant a US$100 million loan?

Will the Indian companies, perhaps, build a power plant to supply the badly needed electricity? Otherwise, it is hard to imagine how prefabricated factory units and warehouses can cost that much money. And, has the existing Kigali’s SEZ attracted any serious foreign direct investment before blindly sinking in US$100 million?As always, Kagame’s Rwanda is unfathomable.