Rwanda Investments2

RCF. CoC No.27371119, The Netherlands Page 1

Opportunity for investors: Rwanda and the East-African Community (EAC)

F. Castelein MSc, Rwanda Chamber Foundation. July 2012 [email protected]

Introduction

“ How to invest $ 500 million in a country, adding huge value to development and getting a

solid ROI”? Rwanda, country for opportunities.

The Rwanda Chamber Foundation is a private independent organization, whose main

objectives are the promotion of Rwanda as a good professional and growing business

environment and the assistance to (potential) investors during their first steps in or their

investigation of Rwanda. We build joint ventures & partnerships, offer management &

administration, and support FDI. If we participate in business, we operate with one of our

for-profit companies.

Mission: Our objective is the promotion of business and investment opportunities in

Rwanda and assist and guide companies and persons who have an interest in Rwanda or

want to invest in Rwanda. We focus on sustainability and durability. We always think in

terms of chains, integrated solutions, and in cycles.

Chain: a good example is the poultry industry. “How to multiply the poultry & egg

production”? The chain starts with good feed. And that starts with the availability of maize,

corn, soybeans, lime and additives. Input for a feed factory. Next step is a good population

of parent-stock, producing fertilized eggs for a hatchery. Farms to rear one-day female

chick into 18 weeks layers ready producing eggs in layer farms, or growing one-day chick in

7 weeks to broilers for the market.

Cycle: an example is extracting methane from lake KIVU with a CH4 processing plant.

Deliver the gas to a 10 MW powerplant. Wash the exhaust and use the CO2 and some heat

for greenhousing (5 ha. produces 2,500 ton tomatoes / year)

Summary

This report gives an overview of synergy in related opportunities for investments in Rwanda

(with also a focus on the market of the EAC), with a high added value for the country and

the region. All investments, mentioned in this report, will deliver a solid ROI. Most of the

business cases are available already. Many (potentional) partners are selected.

Rwanda needs some help because it is not top-of-mind for many FDI. However, Rwanda has

great opportunities, with full support of the ambitious government, with good tax benefits,

and active local entrepreneurship. It is booming, safe, stabile, clean, with good institutions,

infrastructure and no corruption.

mailto:[email protected]


We address a total of investment opportunities of $ 90 M USD, having a huge impact on the

country, scaling to $625 M plus (excluding the new airport, railway, and some specific

factories).

One top priority sector is energy. Lack of energy is becoming a blocking factor for

sustainable growth. Rwanda produces just 100 MW. Opportunities are there but financing is

a bottleneck. Hydro can deliver 320 MW, Geothermic 310 MW, Methane 300 MW, Peat 200

MW. We offer the opportunities for Methane (investment from $20 M scaling to $125 M),

and for Peat (starting at $20 M and scaling to $150 M). We mention four additional

opportunities (factories for cement, waste, flat-glass, paper)

Next sector is agri- horticulture. Income for 75% of the population, 35% of GDP.

Investment opportunities in a long list of local initiatives ($15 - $20 million). Cultivating

land at $2000 / ha in average. Greenhousing top-class technology 20 ha ($20 M) and there

is a huge demand for maize, soybeans, vegetables and fruit.

In the sector livestock we selected the poultry industry and fish farming as ‘ low hanging

fruit”. Chicken & fish produces protein at low costs. Making Rwanda independent from

importing eggs, chicken meat, and one-day-chick we can upgrade the whole chain (feed,

parent-stock, hatchery, rearing layers, layer farms and broiler farms) for $ 2.9 million.

Scaling into an exporting country and knowledge center for additional $ 6 M.

Fish farming is underdeveloped in this country with 24 bigger lakes. Just to start with the

production of 1600 ton fish / year and building knowledge & skills we should invest $1.5

million.

Affordable housing is a big issue in this fast growing country. In total the estimate is over

400.000 DU’s (Dwelling Units & apartments) for the coming years. At least 80 % of the

houses should cost between $ 3,000 - $ 50,000. We can start building 2000 houses right

now. Total investment for flexible production of CEB’s is $ 7.5 million for > 5000 houses /

year. (The demand is far over 14,000 / year.). We can introduce the concept based on steel

frame by importing a steel frame profile factory ($1 M).

In addition we got the request from the Rwandan government to develop a completed,

sustainable neighborhood for 30,000 people on 204 ha near Kigali. Kigali area needs about

31,000 new DU/year between 2012-2022 (or about 60 neighborhoods of 500 DU each).

Including water, sewerage, power, solid waste, transportation, community facilities, (health,

education, market, other), and Jobs.

Market demand: households that can afford payment of DU without outside support --

reaches 180,233 DU, 16,384 DU/Y (52.4% of the total demand). So, affordable housing is

47.6%. (14,616 DU / year). Typology: 25% apartments and 75% single & terraced.

The estimate for the infrastructure in total (not housing) is $ 100 million.

All constructions in houses and other buildings between $ 200 - $250 million

The plan is completely designed into detail already. But all buildings are open for all kinds of

idea’s. Kinyinya sub area with its 11 neighborhoods should be an example for further

development.


Overview

About Rwanda P.3

Investment opportunities p.7

- Energy p.7

Methane plus powerplant p.8

Peat plus powerplant p.10

4 factories

- Agriculture & horticulture p.11

- Livestock p.14

Poultry industry p.15

Fish farming sector p.16

- Affordable houses , buildings p.17

- Development whole neighborhood p.19

Kinyinya sub are

- Infrastructure, logistics p.27

Bugesera International Airport

International Isaka Railway

About Rwanda:

Rwanda has a bewildering history…Every possible tension which can arise between

communities has occurred in this country. Interference from Germany (1899), Belgium

(1919) and France was disastrous in every respect. Rwanda has been independent since

1962. The genocide in 1994 was a culmination of turbulent events and only made possible

due to the passivity of the UN and the west.

Rwanda is a small country (3/5 the size of the Netherlands), heavily populated with 10.5

million people (most densely populated country of Africa, with too high a rate of population

growth and too few natural mineral resources

Therefore, a positive future can only be built by looking forward, working hard, attracting

investors and utilising the talents within the population. By creating economic prosperity to

prompt a decline in population growth. By making good use of this prosperity, mainly

technological and economical services, and becoming an innovative source of information

for Africa. All within a stable political climate. Rwanda is much more than genocide,

mountain gorillas, Akagera National park, Nyungwe Forest and lake KIVU.

According to the results of Vision 2020 (planning 2000 – 2020) so far, all of this is

possible. Possible, considering the mentality, eagerness to learn, precision, enthusiasm and

political stimuli for entrepreneurship. Possible, as investments are being made into the

latest technology and infrastructure, health, education, trade, services, innovative industry

with equal opportunities for all. Possible, as active investments are being attracted and the

country has accommodated for the creation and support of entrepreneurship.


Capital and largest city: Kigali, 900,000 p. on 1500 meters above sea level.

Ethnicity/race: Hutu 84%, Tutsi 15%, Twa (Pygmoid) 1% Today

The Unity of The Republic of Rwanda !

Religion: 56,5% catholic, 26% protestant 11,1% adventist ,and 4,6% moslim(2001).

Languages: English, French, Kinyarwanda

Agriculture (2009): 34% of GDP and 45% of export. Products--coffee, tea, pyrethrum

(insecticide made from chrysanthemums), bananas, beans, sorghum, potatoes, livestock

and nuts. Industry (2009): 14% of GDP. Types--cement, agricultural products, beer

production, soft drinks, soap, furniture, shoes, plastic goods, textiles, cigarettes,

pharmaceuticals. Minerals in 2009 accounted for 28% of export earnings, followed by

tourism, and tea, coffee. Services (2009): 46% of GDP.

GDP growth 2011 was 7%. GDP $6 billion:

Agriculture 33.6%, industry 14.1%, services 52.3%

Cultivated land is 46%, 1.8m ha..

Fertilizer us 16 kg / ha.

Export 2011, $300 million. Kenya 36.6%,

Democratic Republic of the Congo 14.7%, China

9.1%, Swaziland 5.9%, US 5.3%, Pakistan 4.6%

Imports 2011, $1,307 billion. foodstuffs,

machinery and equipment, steel, petroleum

products, cement and construction material

x1000

Agriculture, export & import


Export about $ 200 million. $91 mln (2009) coffee and tea (42,000 ton), $80 mln minerals

(tin, tungsten, wolfram, chromium), $10 mln. manufacturing, $15 mln. agriculture &

livestock. Export 2011 $300 million

Rwanda is booming business following the Worldbank figures and other independent

sources. Please look at www.rwandachamber.org Summarizing some statistics: GDP $ 5.6

B, growth 7%, inflation 6% (Rwandan Franc linked to the USD), and the finance sector is

well developed.

The climate is mild, always between 18 – 28 degrees with two rainy seasons. The economic

climate is great with a very stimulating government.

25% of the population lives in the cities. Over 60% is below 24 years old. 60% earns less

than $ 165 / Month. Only 5% earns more than $ 1300 / Month.

Rwanda is a landlocked country. Mombassa, Kenya, is 1400 km, Dar-Es-Salaam, Tanzania is

1600 km, Matadi, Congo is 2200 km and no option because there is no infrastructure.

Therefore, logistics is a challenge in time and costs.

Rwanda has a very good infrastructure and all over the country there is full access to mobile

networks and broadband.

Worldbank figures Economic ranking out of 183 economies

http://www.rwandachamber.org/


Rwanda has very low corruption, it is clean and safe with very good infrastructure and a UK

based legal system

Rwanda is part of the EAC common market: 125 million people (Rwanda, Kenia, Tanzania,

Burundi, Uganda) with Duty free access from country to country.

The Government of Rwanda has sought to privatize several key firms. Since 2007, the

telecom and mining sectors have been largely privatized, and the government has sold off

several government-owned tea estates and made great strides in completing privatization of

the banking sector. RECO, the utility monopoly, remains to be privatized, as do several

other parastatals.


Huge program in land registration (NL Kadaster) up to 12 mln registered ownerships of

land.

There is an open trade policy, a favorable investment climate, cheap and abundant labor,

tax incentives to businesses, stable internal security, and crime rates that are comparatively

low. Investment insurance also is available through the Africa Trade Insurance Agency, the

Overseas Private Investment Corporation, and the World Bank's Multilateral Investment

Guarantee Agency (MIGA)

The implementation of a value added tax of 18% and improved tax collections are having

a positive impact on government revenues and thereby on government services rendered.

Please find more information at www.rwandachamber.org

Today, there are about 20 institutions of higher learning in Rwanda. Between 1963-1993,

Rwandan university graduates numbered roughly 1,900; today, Rwandan university

graduates exceed 55,000. About 95% of all children go to school.

Investment opportunities, an integrated picture

Energy

Lack of energy is one of the biggest challenges for Rwanda today. The total capacity is

almost 100 MW and the peak demand > 93 MW. However, some factories are running on <

50% due to a lack of energy (like Steel Rwa Industries). Other companies like the cement

industry, a casave processing plant and others have started burning peat. This primitive



process is bad for the environment.

The tariff for electric power is $0.24 / kWh, the highest in the region. Only 15% of families

have access to electric power. 85% of the energy needed is from biomass. With this number

reforesting is a difficult process.

Many opportunities for investors:

Increase hydropower generation to about 320 MW

Develop geothermal power plants with capacity of 310 MW

Generate power from methane gas to deliver 300 MW

Generate power from peat to deliver 200 MW

For Hydro we can deliver the right information and contacts:

Rusumo hydro (30MW) will be fully public financing through the World Bank

and AfDB, while

Rusizi III hydro (48MW) will be developed under PPP

Rusizi IV hydro (96MW) will be developed under PPP

We are involved in two other initiatives and invite you to join as a FDI.

1. Methane gas from lake KIVU

2. Peat in a pyrolysing and gassification process

No.1: Methane

Extracting methane (plus CO2) from lake KIVU, is a delicate process. Proven reserves of

55-60 km3 (STP) of methane, of which 40 km3 believed economically exploitable;

Crude gas in deep water layers [270m-350m] contains a mixture of carbon dioxide and

methane [74% and 25%]. Electric potential of 700 Mw, 350 MW for Rwanda.

There are four concession owners.

• Kibuye Power1 is the earliest of the three and is a pilot plant, which was developed

by the GOR in partnership with a private firm. The GOR is presently looking for a

Joint Venture (JV) to enhance and scale-up the project; the new partner is expected


to bring new gas extraction technology to rebuild the plant to a capacity of 50 MW in

phases. Once the JV is established, the project will need financing. Status: This is

still not active.

• ContourGlobal, an American firm, has established KivuWatt to develop a 100 MW

concession for a methane-to-power plant on lake Kivu. The project is to be

implemented in two phases; with the first phase of 25 MW planned to be operational

in July 2012. The remaining 75 MW is planned for Phase II to be completed in 2014.

Phase I is expected to cost $140m and has achieved financial closure, but Phase II is

yet to be financed. Status: the extraction process is still not under control. The

powerplant is postponed to, hopefully second half of 2013

• The Rwanda Energy Company (REC), a subsidiary of the Rwanda Investment

Group (RIG) has a concession to develop a 50 MW methane-to-power project. The

project is encountering some technical difficulties relating to the gas extraction

platform, and the firm is seeking new partners and investors to revive the project.

Status: REC does not have a stabile CH4 winning process. They cannot control the

calorific value. They cannot guarantee delivering a specified volume. The

construction of a powerplant is not started.

KIVUgas & Hydragas Technology Ltd. Small firm with a loan of $ 4 million from IFC

(part of Worldbank). We as RCF are involved in this project. With proven technology we

will extract CH4 with a small floating factory and deliver the gas to a 5 MW powerplant.

This is a $ 20 million investment. In phases we will expand up to 50 MW, step by

step in separated installations. Total estimate is $ 125 million investment.

The 5 MW plant produces 40 million kWh / year to be delivered to the grid at $ 0.15 /

kWh. Total revenue $ 6 million / year.

We will also use the CO2 and some heat from the powerplant for horticulture with

greenhousing. Tomatoes & paprika. 5 ha. greenhouse produces 2,500 ton tomatoes /

year. One kilo tomatoes does $1 in the market. The business case for the greenhouse

only shows an ROI of > 12 %. The investment for 5 ha. is about $ 6.5 million, for 20

ha. $ 20 million. If CO2 and heat are available a good business case.


No.2: Peat.

In 1992 Rwanda estimated the availability of peat about 155 million ton over 50,000 ha.

Today it is estimated about 200 million ton. Only a few thousand ton is mined / Month

today in a concession from the Peat Energy Company. They deliver to the cement

industry where peat is burned in a primitive process, coursing a lot of pollution. The peat

delivers ashes for cement and fertilization of soil. And heat for fired bricks of concrete. A

small part is sold on the market for factories. The price of that peat is just 10% of

diesel.

The Rwandan government is developing a plan for peat mining and building a

powerplant. The third concession is from a Turkish company, just started.

We as RCF, KIVU gas & Portman Energy Ltd. have a process in place based on

pyrolysis & gasification of peat with an efficiency of 48%. This process delivers syngas

for a powerplant, bio-oil, char, heat and CO2. We will invest in the gasification

installation in the first place, delivering syngas to an existing powerplant. After that we

invest in a 10 MW powerplant. The heat is used for drying the peat and partly for green

housing. Part of the CO2 is also used for green housing. Most of the CO2 is in the char.

Char is used for cooking and for fertilizing soil.

We are after our own concession and we can scale to 50 – 100 MW.

The initial investment is $ 20 million. We will scale to $ 150 million investment.

The ROI is huge. The business case is almost available. After mining the peat, the soil is

very good for agriculture, in specific rice, tea and soybeans. These products needs good

water management and the whole infrastructure for water management will be there

already, constructed for the mining process of the peat.

Additional remarks: energy related factories

When we can produce enough energy there are good opportunities to invest in four other

factories with high added value for Rwanda and the EAC, but using a lot of energy. None of

them exist in Rwanda today.

One is the cement industry. There are 3 companies for cement and concrete in Rwanda.

In USD: 19 million 39 m 34.4 m 39.6 m 50 m

1. Cimerwa

2. Kigali Cement

3. Great Lakes Cement in Musanze


Cimerwa is the biggest cement producer with current installed capacity of 100,000 tons per

year. It plans to increase capacity to 600,000 tons per annum by 2016.

Kigali Cement, with its new strategic shareholder ATI RIVER Mining (Kenya) is planning this

year to increase its production capacity from 20,000 to 60,000 tons and by 2013 the

production capacity will reach 100,000 tons.

Great Lakes Cement of Musanze is struggling to pay back bank debt and to handle other

related competitive challenges. It is currently being reviewed by BDF with a view to

implementing a turnaround programme, which may require the intervention of a strategic

investor. The company has a theoretical capacity of 70,000 tons per year but currently runs

at only 15% capacity.

In order to boost the country’s cement production capacity and reduce importation of

cement through increased affordable cement production; local Cement producers were

contacted to understand which GoR interventions would help most in increasing local

cement production. Therefore by 2016 installed capacity in Rwanda will have increased by 4

times. This capacity will enable Rwanda to significantly reduce imports as well export to the

Great Lakes regional markets. These are typically for Rwanda interesting plans but with a

lack of energy this will not work.

Two is a factory for flat glass.

Rwanda must construct 300,000 houses and 100,000 other buildings the coming years. All

glass is imported and very expensive. With 40,000 houses / buildings, and in average each

with 7 m2 of clear flat glass the demand is 280,000 m2 / year. For 4 – 5 mm glass that is

3,500 ton/year. Dubbel glass 7,000 ton/year. A small production line produces 150,000 ton

/ year. Investment about $150 million. This factory is a bridge too far at the moment.

Three is a factory for waste processing

Four is a factory for paper & cardboard.

Agriculture & horticulture

Expected fruit production 2014


In addition to the initiative of the greenhouse for tomatoes and / or paprika, Rwanda has

many challenges for expanding agriculture but also good investment opportunities. We

have, after coffee and tea, bananas, potatoes, the processing for beverages including the

dairy industry, fruits & food processing, wheat & maize milling, sugar, rice, pyrethrum, and

fertilizers (just 16 kg / ha in 2010).

Key challenges are:

- land availability and cultivation. 75 % of the population lives in rural area’s.

Mostly working together in cooperatives but not well educated in agriculture.

- Low productivity, low irrigation, bad post harvest management and storages, and

low access to loans

- Limited logistics and high international transport costs

Opportunities

- Rwandan tea commands premium prices at international auctions. The sector is

now fully privatised and many investors are improving yields and upgrading

capacities to produce value added products. Government is preparing a further

18,000 ha of land to be made available for new investors. This wills double the

productive capacity of Rwanda.

- Maize growing and milling, growing soybeans, sorghum, and more. The

demand is huge. An example, there are hundreds of ha. available from cow

farming cooperations. The productivity with 2 cows / ha is low. Most of the

farmers are willing to change into zero-grazing but have two bottlenecks. One is

they have no idea how to make the first steps in growing maize. Two is they have

no money. They have no idea how to feed the cows during the crowing season.

We estimate we can develop many ha with cultivation, irrigation, removing

stones, seeds, training, for in average $2000 / ha, however this is very

situational. Preparing & cultivation more or less flat soil is about $ 500 / ha. plus

investment in irrigation if needed. Marshland without constructing dykes is about

$ 5,700 / ha, but with the dykes up to $ 13,000 / ha. Hillside development up to

$ 16,000 / ha.

- Soybeans. High demand for soybean-oil, soy cake for feed. Soyco is investing $

15 million so far but the demand is much bigger. The company is contracting with

30,000 local farmers to grow soybeans. Soyco will produce cooking oil, and cake

for the animal feed industry. Soybean production takes four Month in Rwanda.

- The investment opportunity identified is the establishment of a greenfield

avocado packaging facility that will serve the growing and significant demand

for avocados in the EU. Avocado consumption has grown strongly amongst health

conscious consumers in developed markets; however unlike the U.S., the EU has

thus far struggled to find sources of increased supply. Rwanda’s good agro-

climatic conditions, favorable cost basis and the attractive investment

environment, enable Rwanda to meet some of the EU’s unfulfilled demand.

Investment USD 2.9 million, ROI 38%. After banana’s avocado is the most

widely produced fruit in Rwanda with an annual output of 82,000 ton.

- The investment opportunity identified is the establishment of a Greenfield beans

processing and canning facility that will serve a growing regional middle class

market driving demand for processed foods. Rwanda’s favorable supply-demand

dynamics, the gap in the market for processed beans products and the attractive


business environment, present an attractive opportunity to secure first mover

advantages to serve the rapidly urbanizing middle class within Rwanda and the

region. Investment USD 8.6 million, ROI 32%.

- The core product focus for Ikirezi Natural Products is the production of quality

organic geranium oil. Ikirezi currently has approximately 30 Ha of current land

under cultivation and distillation capacity to produce over 2.5 MT of geranium oil

annually. The five year plan targets an expansion to 400 Ha of geranium and

patchouli producing 6MT and 9MT respectively, with an annual turnover of

approximately two million USD/yr. Essential oils represents a key sector with the

opportunity to: Become regional leader as premium producer of essential oils.

Projected Investor / Shareholder ROI greater than 30% and IRR of 22%.

Provide return to farmers (1,600 families impacted; agricultural incomes total

2.5M USD)

- Rubirizi Dairy is one of the oldest dairies in Rwanda. It's current production

capacity now is about 3000L/day with a max. of 8000l., but equipement is old

and needs some "refining" or, for some of them, replacing.The owner of this dairy

is a fair man who has my boss for years. These days, the plant is closed due to

requirements of RBS (Rwanda Bureau of Standards) that Rubirizi Dairy is failing

to fullfill. That is why the owner is looking for an investor who is "serious" and

experienced in dairy sector to improve performance of the plant. This is unique

opportunity in Rwanda because the dairy is located about 5km from Kigali City

center, and it comprises about 50ha which can host a modern dairy farm in order

to have a minimum of own raw milk to supply a dairy plant.

Dairy value chain supported in Vision 2020 and EDPRS.

Generates profits in first year of operations

Projected 1.3B RWF (2.16M USD) by 2016; 25% Gross Margin; 10% Net Margin.

Positve income impact for thousands of Rwandan cattle farmers.

- Rwanda has good growing conditions for strawberries. Currently there is no

large scale production. There are about a dozen cooperatives producing

strawberries for a processing companies that produces jam and juice.

- Bamboo. We have a business case available from a local bamboo grower. He

wants to expand his area and invest into a plant for toothpicks and later for

intermediate products for constructions buildings / houses. The initial investment

is $ 500,000.

- Invest in fertilizer import, and distribution business as privatization, and

government’s commitment to addressing market barriers is creating opportunity

for players to secure first mover advantage. The Government of Rwanda’s

strategy to increase agricultural productivity through increased fertilizer usage

has grown the fertilizer market to 32,000 MT over the last 6 years. The

Government now plans to privatize the market and encourage the entrance of

more private sector players to increase market efficiencies, fertilizer utilization

and technical agro-capabilities. With privatization and the planned market

building initiatives, Rwanda’s fertilizer market has the potential to reach 48,000.

The annual revenue forecast of $15 million by 2019 requires an overall

investment of $1.2 million. MT in volume and over $46M in revenue over the

next 5‒7 years. Detailed report available.


Targeted Vegetable Production 2011-12

-

Livestock & Fisheries

Today just 1.7% of GDP (livestock contributes $ 60 million, fish $ 11.5 million). Chicken

doubled from 2 million to 4 million, goat from 2.5 million to 3 million. There are 1.5 million

cows producing 200,000 ton milk / year. However, 25% is lost due to bad logistics and lack

of knowledge. Also the poultry industry can grow with 30% just with better feed and

equipment, more knowledge and better management.

Livestock & fisheries in Rwanda is still a small sector. There is a lack of protein. Rwanda has

1.5 million cows, 4 million chicken (less than 400,000 commercial), 3 million goats, 850,000

rabbits, 700,000 pigs, 800,000 sheeps, 7000 ducks, 5000 pigeons, 350 turkeys.

Developing the whole small animal sector (except poultry and cows) needs an investment of

$ 8 million (report 2012 available).

We will concentrate on poultry and on fish. That is because poultry is a very efficient

producer of animal protein. 2 kg feed produces 1 kg meat or eggs (2 : 1). For cows that

production rate is 9 : 1.

Meat consumption in developed countries per capita is 80 kg / year, in Africa 32 kg / year,

in Rwanda 10 kg / year. Chicken meat is the most expensive meat available in Rwanda ($ 6

/ kg). Egg consumption is 5 eggs / year. Table eggs are $ 0.15 – 0.20.


Chicken meat production 2010 was net 2,500 ton, eggs was 2,900 ton (36 million). Egg

import was 19.6 million (partly sold to DRC). Import of eggs from Uganda is 900,000 /

week. Imports day-old-chick was 1,087,390 of (Uganda, Belgium, The Netherlands).

Import of chicken meat is 200 ton / Month, mostly for DRC.

Poultry industry

The poultry industry can expand twenty fold without a drop in price because of over

production. Preventing any import in the future needs an additional production of 1.3 million

chicken / year. That is not a big challenge if we invest in the total chain. We divide the chain

into 3 parts.

Part 1: Animal feed

There is no factory for animal feed in Rwanda. At the moment the demand for good feed

is about 30.000 T. The local production today is 5000 T, and the rest is imported in low

quality and in raw material, mixed by farmers themselves. The market (demand) is growing

quickly with 10,000 T / year. The value of the demand for feed today is $ 10 million / year.

To be able to produce 5 ton/hour good quality feed in different types for parent-stock,

rearing farms, layers & broilers, made from a variety of raw material, needs an investment

of $1.2 million. First step is silo’s and dosing, followed by grinding, mixing, pelleting,

finishing & packaging. Control and automation. Small laboratory. building, transport and

training. One can start without dosing (done by hand) and pelleting (just for broilers). That

lowers the initial investment with $ 450,000.

After some time a next step is a soybean processing installation, extruder plus, 2 ton /

hour. Investment is $ 600,000. To be coordinated with the initiative of Soyco Ltd.

If the availability of raw material is guaranteed, this is a solid business case.

Part 2: 10,000 parent-stock plus 4 farmhouses and equipment ($ 200,000), a hatchery for

net. 35,000 one-day-chick / week ($250,000). This production can be used for 1,750,000

broilers / year or 875,000 layers / year. Or in combinations.

Plus a rearing farm for the rearing of one-day-chick females up to 18 weeks pullets, ready

to start laying eggs (sold for $16 each). 100,000 layers / year in 20 week shifts of 40,000.

(Investment $ 400,000). In total part 2: $ 850,000.

Part 3: a layer farm for 5,000 animals is $ 70,000. A broiler farm for 10,000 animals is $

170,000. This is to decide by private local investors.

Finally a training center, train the trainer program, training locals in The Netherlands in

vocational training. Two experts for coaching / management locally for one year. We can

realize this in partnership with PTCplus (NL) and local institutions like INES and ISAE. We

can make the rearing farm a demo farm for training. Total $350,000

The upgrade of the poultry chain in total is an investment of $ 2.9 million


After 3 a 4 years one can invest in a state-of-the-art slaughterhouse for broilers.

Slaughterhouse for 10,000 broilers / shift of 8 hours, freezing (-18 degrees) of 15 ton

chicken meat / day, cleaning & rendering, a building and training is $ 4 million.

Fish farming

Rwanda has 24 big sweet water lakes with 1,390 km2 water surface. The national fish

production is estimated at 13,000 tons of which capture fisheries contribute 9,000 tons and

aquaculture 4,000 tons.

The capture fisheries production remains the major supply of fish locally but has reduced

over years and currently provides about 1.0 kg of fish per capita annually. Africa 7 kg /

capita (Burundi 3.6 kg/ year; DRC 6.9 kg/ year; Uganda 10kg/year and Tanzania 11.9

kg/year). If Rwanda‟s population growth continues as projected in the vision 2020, the

country will need 112,000 tons just to attain the average Sub Sahara per capita

consumption of 6.6 kg/person/year and 265,600 metric tons to reach the global average of

16.6. In 2006 Rwanda imported $104,000 fish. Fish is about $ 4.5 / kg for consumers,

Tilapia fillets $ 9 / kg.

The Paigelac project has so far trained 3,623 fish farmers and formed and supported 118

fishing cooperatives across the country. There are several facilities and stations throughout


the country for aquaculture extension, research and management which if rehabilitated and

developed can be a basis for fisheries and aquaculture development.

The water in the lakes in the East and South-East of Rwanda is warm enough and has the

right quality for farming the Nile Tilapia, Oreochromis niloticus, the African Catfish, Clarias

gariepinus, and Haplochromis spp.

We have calculated the development of a modern fish farming practice based on cages in

lakes. Round cages, 10 m and 6 m deep is good for 80 ton / year. To scale and to produce

1,600 ton / year we need 20 cages, seed & hatchery, office, storages, equipment,

transport, training & management. In total $1.5 million

All feed must be imported. At the start the production costs are estimated for $ 3.70 / kg.

We found an international supplier willing to deliver the feed and deliver management and

support over a longer period helping developing the sector.

Affordable Houses & other buildings

Houses and other buildings are expensive because of the high price for cement ($ 14,40 /

50 kg) concrete ($ 570 / m3), steel, wood ($600 m3), fired bricks ($ 1.20 each), tiles for

roofs ($10 - $20 / m2). All other material must be imported. Construction time is extremely

long. Interest rates for mortgages starts at 15%.

A nice 140 m2 house is sold for $ 150,000. A 150 m2 terraced or 2 by 2 houses, 2 levels

are sold for $ 100,000 - $ 160,000. The demand for affordable houses is hundreds of

thousands.

Only for Kigali area (1 million people) the projected growth is 1,957,312 @ 2022; 3,059,457

@ 2030; 5,347,178 @ 2040. KCMP (Kigali Conceptual Master Plan)

The official housing market demand in the Kigali area is calculated in study with support

from the European Union. Affordable housing is a key component in the city’s development

strategy.

In total the estimate is over 400.000 DU’s (Dwelling Units & apartments). At least 80 % of

the houses should cost between $ 3,000 - $ 50,000.

We have developed two concepts, both very innovative for Rwanda and both for

construction of houses, offices, shops, storages at lower costs than local constructions with

concrete, bricks and cement.

New Backlog Total Formal Informal Total

235.274 108.807 344.081 37.594 250.000 287.594 56.487 306.487

Supply

Demand Gap

Housing

ChallengeOverall Demand in Kigali 2022 Overall Supply (Current and Pipeline)


Our first concept is based on producing bricks / blocks. Compressed Earth Blocks (CEB) with

our own factory(s), using local clay, sand and lime and using local components like tiles or

metal for roofs, wooden frames for doors and windows, and imported sanitary and glass.

Our second concept is based on steel frame, ceramic bricks & tiles, composite board

material and glass. We can combine both concepts for example by building a house with our

local bricks and a steel frame floor, roof, prefab windows, doors, kitchen and bathroom.

We invite FDI to participate in the concepts.

We will start with an imported factory for bricks / blocks, using local material like clay, sand

and lime plus water. This factory can produce up to 12,000 bricks / week.

The bricks are Compressed Earth Blocks (CEB’s). This technologyb is known since the 18-th

century. Today after many hours of science and experiences, and new hydrolic technology it

is highly developed and competing with fired bricks and sand-cement blocks. CEB is very

sustanable and durable. The environmental footprint for a 50m2 house is just 12 l. of diesel

for a generator (or the equivalent of electric power).

The quality of the bricks is very good, proven technology in countries like Germany, Austria,

Belgium, Portugal, Spain, France, Morocco, Comores Islands, Guyana, Mali, Sierra Leone,

Tanzania, Uganda, Burkina Faso, Cameroon, and starting a project in Burundi in January.

A brick (29.5 x 14 x 9 cm) is pressed at both sides of the 9 cm with over 20 tons and

guaranteed for far more than 100 years under the conditions that you use the right mixure

of raw material, do not build in water but on a solid foundation and with a good roof.

In Europe there is more and more attention for this concept because it is very sustainable,

solid, and with very comfortable living internal climate for temperature and humidity. In

specific when you build a bungalow with 30 cm walls.

If we build on a foundation as best practice locally from stones and cement, with a local

constructed roof and windows with wooden shutters (standard in rural areas and for poor

people) we can construct turn-key houses of 45 m2 ( 6 x 9 m plot), 3 rooms, for about $

3,000. A nice 75 m2 house with lounge, dining, 3 bedrooms, kitchen, bathroom, storage

and 2 terraces, windows, concrete foundation, walls 14 cm and a roof with galvanized

sheets or ceramic tiles might cost in production (without the land) $ 12,000 - $ 15,000. We

can deliver all houses with solar panel.

The smallest factory offers work for 12 - 14 people of labor. Up to 60 m2 houses we can

produce 2 houses / week with the smallest factory.

Under dry conditions we bring the factory to the constructing plot.


We can build luxury houses up to two levels between $20,000 - $ 100,000


The demand for affordable houses is huge. We can start building low cost houses right now

on 4 ha.( 50 m2 – 80 m2), and 4 more luxury houses. The buyers have the land and money

available. We will work with solid international contracts (UK law).

Contacts with the government and some local constructors showed us a demand of over

5000 low cost houses ($3,000 - $ 50,000) on a short term. Our margin will be, depending

on the total costs of a house, between 15% - 50%. We have the intention to re-invest profit

in both concepts, CEB’s and steelframe.

Initial investment about $ 150,000 (factory including trucks, all equipment, transport,

working capital plus training). Total investment for scaling and flexible production is $ 7.5

million for > 5000 houses / year. (The demand is far over 14,000 / year. Please read next

chapter below: neighborhoods).

For the second concept we need to import a steelframe profile factory at $ 1 million.

We will import the steel in roles. This quality is guaranteed for 150 years. We can construct

roofs, floors, terraced buildings & apartments, storages, offices up to 4 levels. We have

found a local factory who can deliver the right ceramic bricks & tiles for pre-fab walls.

The two concepts will contribute to the next opportunity below.

We got the request from the Rwandan government to develop a completed,

sustainable neighborhood for 30,000 people on 204 ha near Kigali.


The Kinyinya Sub Area is located within the fastest growing area of Kigali in the Kinyinya

Sector, Gasabo District north of the Nyarutarama neighborhood, east of Gisozi, and south of

Batsinda. It occupies approximately 205 and is located about 4 km northeast of the Kigali

City Center.

Where 75% of the population lives in rural area, working on in average less that 0.4 ha of

land, getting 3.1 children / women, the productivity of the land is low, scaling is difficult and

younger people are moving to the cities. Rwanda wants to concentrate population more and

more in cities, scaling agriculture and facilitating communities with jobs, access to schools,

medical treatment, and other facilities. This will only work if the government facilitates

affordable houses, small business development, and good infrastructure.

For this migration process to cities it is important that families feel comfortable in small

neighborhoods and can continue their way of living as much as possible.

“Family/Neighborhood Centered Development: Kinyinya should provide a wide range of

family and youth needs, including neighborhoods that easily serve family and household

daily needs, as well as places for leisure, especially children’s parks, places for social

recreation and common space”.

Together with the the EU (Europe Aid /127054/C/SE/multi), the government developed a

plan (July 2012). Calculating the housing market demand, housing preferences,

neighborhood development, housing finance. Demand for Kigali región only:

A bottleneck is income. 60% has no money to spend in houses at all. 35% earns an income

between $350 - $ 1,300 / Month. 5% earns more. About 257,406 DU (Houses / Dwelling

Units 79%) of demand concentrates in Q1(80% of the population), of which 163,838 DU

(47%) is demand constituted by HH with income of Rwf 100,000/month ($170) and less.

Kigali area needs about 31,000 new DU/year between 2012-2022 (or about 60

neighborhoods of 500 DU each). Including water, sewerage, power, solid waste,

transportation, community facilities, healthcare, education, markets, other), and Jobs.

Affordable Housing = Cost of DU - Payment Capacity(= 30% of income), facilitated by the

government. Market demand: households that can afford payment of DU without outside

support -- reaches 180,233 DU, 16,384 DU/Y (52.4% of the total demand). So, affordable

housing is 47.6%. (14,616 DU / year.). Typology: 25% apartments and 75% single &

terraced.

Preferences for low income households: (density 80 - 140 DU/ha in ‘rural’ neighborhoods)

1. A house that is affordable compared to the household’s income,

2. A low-rise dwelling built with materials that could resist rain,

3. Low maintenance costs,

New Backlog Total Formal Informal Total

235.274 108.807 344.081 37.594 250.000 287.594 56.487 306.487

Supply

Demand Gap

Housing

ChallengeOverall Demand in Kigali 2022 Overall Supply (Current and Pipeline)


4. Indoor toilet facilities,

5. Private and separate bedrooms,

6. ( No adjacent walls.)

7. Orderly distribution in urban setting,

8. A dwelling that could be upgraded and developed over time.

9. Access to utility infrastructure (water, sewerage and waste collection/recycling,

electricity and transport),

10. Located in proximity to schools and other services and to work place,

11. Possibility to install a home-base family business,

Privacy,

12. Safety from natural risks, and

13. Security, especially for female children.

There are 35,590 Ha for new development in Kigali. There are around 300 Ha for

redevelopment in informal areas. Typology for the total demand:

TYPE % NET

m2

GROSS

m2

HH

SIZE

Four bedrooms 11% 96 120 11 +

Three-bedrooms 42% 80 100 5-10

Two-bedroom 41% 64 80 2-4

One-bedroom 6% 48 60 1

38 m2 and 43 m2:


Kinyinya sub area site plan: 11 neighborhoods, 204 ha, 30,000 people, 8.292 houses.


The Kiniynya development program includes the following development zones:

• High Density Mixed-Use Commercial/Retail/Offi ce/Residential

• Retail includes both Class A and Production Retail

• Offi ce includes both Class A and Cooperative/Multi Tenant

• High Density Residential

• Medium-High Density Residential

• Medium-Low Density Residential

• Neighborhood Centers

• Civic Uses

• Schools (Primary, Secondary, Higher Education)

• Government and Non Governmental Agencies (NGOs)

• District Library, Museum, Performing Arts Center

• Recreation Center

• Transit Centers


The estimate for the infrastructure in total (not housing) is $ 100 million.

All constructions in houses and other buildings between $ 200 - $250 million

The plan is completely designed into detail already. But all buildings are open for all kinds of

idea’s.


“Neighborhood Blocks. Blocks are designed with buildings close to the setbacks so that

streets are “living” and peoples “eyes are on the street” for safety and security. Pedestrian


and bicycle traffic on neighborhood streets are maximized while automobile traffic is

minimized.” Overview: what has to be build: 8,292 houses plus other buildings


Infrastructure

- Bugesera Airport. PPP. Still working on financing.

New airport South of Kigali. Construction not started. Phase 1 $600 M.

- Isaka Railway. PPP with BOT model.

Railway to connect Kigali with the ports of Dar-Es-Salaam and Mombassa. Not started.

Estimate $ 3.7 B for 2 new lines from Kigali to Isaka and Gitega and Musongati to Isake.

$1 B for the rehabilitation of Dar-Es-Salaam-Isaka line.

Estimated ERR of 29% on the overall project and 23% on the Rwandan section according to

base case scenario, 5 year construction and 30 years operation period.

Contact: F. Castelein. Rwanda Chamber Foundation (www.rwandachamber.org )

+31629075200


Documents

Rwanda Investments2