RMB (www.RMB.co.za) acted as Joint Lead Manager alongside BK Capital Ltd, and the sole Sustainability Coordinator, for the Development Bank of Rwanda Plc’s (BRD) inaugural FRW150 billion Medium Term Note (MTN) Programme and maiden FRW30 billion Sustainability-Linked Bond (SLB) issuance. The bond is partially credit-enhanced by a World Bank facility. The capital raise which was marketed to and supported by a diverse pool of investors sets a new benchmark for the region in developing sustainable finance instruments.
The bond program provides BRD with access to diverse sources of long-term funding and the SLB will enable BRD to mobilise public and private capital while promoting sustainable economic development. It also effectively links funding and sustainability strategies and helps to diversify funding sources while nurturing BRD’s commitments to achieving key performance indicators (KPIs) aligned with Rwanda’s sustainable economic development objectives captured in Rwanda’s Vision 2050.
“A key feature of sustainability-linked bonds is the sustainability performance targets (SPTs) for each KPI, which link financial performance to sustainability performance. BRD’s KPIs are aligned to their updated 2024-2028 strategy and the SPTs are an ambitious commitment to contribute to addressing socioeconomic imperatives in Rwanda,” says Beth Rivett-Carnac, Sustainable Finance at RMB.
This includes access to finance for women-led SMEs and affordable housing, as well as driving implementation of an environmental and social management system (ESMS) across financial sector participants in Rwanda. The aim of the ESMS is to improve ESG risk management and promote sustainable implementation of financed projects.
RMB and BK Capital assisted BRD in structuring the transaction, securing requisite regulatory approvals and engaging both domestic and international prospective investors for the issuance.
“Supporting BRD to access the capital markets for the first time, to diversify their funding sources and enable their growth strategy through a structure like a SLB, serves to showcase the innovation and value-add that RMB can provide to African clients. This will help them benefit from the debt capital markets in general, and the sustainable finance market specifically, in a credible way,” concludes Kwasi Kwarteng, Head of International Capital Markets&Public Sector at RMB.
BRD is the first national development bank to issue a SLB globally, demonstrating their innovative approach to market development and positioning Rwanda to be on the front line of international debt capital market developments. This issuance is also the first SLB issued in Rwanda and East Africa.
Recognising its role in developing the capital markets, BRD also expects the SLB will act as an important catalyst for the wider use of debt capital markets and to promote this form of sustainable financing among other potential issuers in the region. This is expected to position Rwanda as a leader in sustainable finance regionally, in line with Rwanda’s strategy to develop Kigali as an international financial centre.
Distributed by APO Group on behalf of Rand Merchant Bank.