The Rwanda Innovation Fund (RIF) has finally kicked off, with two ICT startups having secured financing to support their growth and profitability, Government officials have said.
Officials from the Ministry of Finance and Economic Planning (MINECOFIN), and the Rwanda Development Board (under which RIF is implemented) confirmed this on Thursday, September 22.
They were appearing before the Parliamentary Public Accounts Committee (PAC) to respond to the delayed execution of this project and the associated loan commitment fee – a fee charged by a lender to a borrower to compensate the former for its commitment to lend – that the Government has started paying.
The project aimed to provide equity financing for tech-enabled small and medium-size enterprises, train tech-oriented entrepreneurs in business planning and management, and increase awareness and sensitisation with respect to intellectual property rights.
In March 2018, Rwanda and the African Development Bank (AfDB) signed a loan agreement worth $30 million to finance the establishment of RIF (on the side of the Government).
According to AfDB, the Fund Manager — Angaza — signed an agreement with Rwanda to be a key participant during all stages of the innovation life cycle from start-ups to the Initial Public Offering of the firms.
Under the agreement, the Fund Manager was required to raise $70 million from private investors to achieve a target fund size of $100 million.
According to RDB, the project targets early growth high impact tech-enabled sectors, with potential to scale up regionally.
Priority sectors include energy clean technology and energy access solutions, smart transport and logistics, e-commerce, agri-tech, digital health, medical and technology devices, inclusive finance tech, and education technology.
It is expected to support more than 150 tech companies at various stages. It is forecast to create more than 2,000 direct jobs and over 6,000 indirect jobs over its 10-year life cycle.
The initiative is part of broader efforts to realise the envisaged Kigali Innovation City, a $1.9 billion flagship project that seeks to catapult the country into a knowledge-based economy.
