Africa Growing Together Fund provides $50 million loan for Phase 1 of Transformative and Sustainable Water and Sanitation Program (Linked to Umbrella Record ID#36104)

Project narrative

On May 22, 2014, the African Development Bank (AfDB) and the People's Bank of China (PBOC) signed an agreement for the Africa Growing Together Fund (AGTF) (see Umbrella Record ID#36104). The purpose of this $2 billion loan facility was to finance large development projects in Africa between 2014 and 2024. The AGTF is sponsored by the PBOC and administered by AfDB. Then, on December 19, 2023, AGTF signed a $50 million loan agreement (ID#2000300000902) with the Government of Rwanda for Phase 1 of the Transformative and Sustainable Water and Sanitation Program. On the same day, the African Development Bank (AfDB) issued a $199.5 million loan (ID#2000300000902) to the Government of Rwanda for the same project. The borrowing terms of these loans are as follows: an annual interest rate of SOFR plus a 1% margin, a 25-year maturity, an 8-year grace period, a 0.25% commitment fee, and a 0.25% upfront (management fee). The borrower is responsible for making consecutive semi-annual and equal payments after the grace period. The scope of Phase 1 includes the rehabilitation of the Nzove water treatment plant (WTP) and the construction of Nyaruguru-Huye-Gisagara, Mwanje, Muhazi, Mugesera, and Kivu Belt water supply systems. Phase 1 goals include: (i) reduction in school dropout due to long hours of fetching water, (ii) facilitation of retention of adolescent girls in school due to improved dignity on sanitation, and (iii) facilitation of acquisition of governance skills through participation in the water management committees. The entire Program involves investments in water supply and sanitation infrastructure for Mwange-Gicumbi, Nyaruguru-Huye-Gisagara, Mugesera/Sake, Muhazi, Kivu Belt, Kagaga, Musogoro, Volcano Belt, Ngoma River, Makasa, Gasabo, Bugesera Centralized Sewerage System, Huye, and Muhanga. The direct beneficiaries of the program are expected to be the population of towns and districts where water supply and/or sanitation schemes will be financed by the program. Water supply investments are expected to directly benefit about 2,330,000 people (50% women) in various towns and communities of Kigali City, Gicumbi, Nyaruguru, Huye, Gisagara, Gatsibo, Karongi, Nzove, and Ngoma Districts by 2029. Among people residing within the service area of the urban sanitation networks, about 371,549 people (50% women) are expected to have access to improved quality of sanitation services through connection to the sewer network or have their sludge safely collected and treated. Additional beneficiaries include people benefiting from hygiene practices through behavior change communication (SBCC) and nutrition education. The project’s environmental and social risk category was confirmed and validated as Category 1 on March 15, 2023. The borrower prepared Environmental and Social Impact Assessments (ESIA) for the 6 sub-projects (Mwange, Nzove, Nyaruguru-Huye-Gisagara, Muhazi, Kivu Belt, and Mugesera) and Resettlement Action Plans (RAPs) for 5 sub-projects (Mwange, Nyaruguru-Huye-Gisagara, Muhazi, Kivu Belt, and Mugesera). All the ESIAs have been cleared by the AfDB, approved by RDB, and disclosed both in-country and by the AfDB. The Nzove ESIA was disclosed in-country on July 21, 2023, and by the AfDB on July 26, 2023. The rest of the ESIAs were disclosed both in-country and by the Bank on July 31, 2023. However, owing to the delayed completion of the RAPs, 3 RAPs (Mwange, Nyaruguru-HuyeGisagara, and Kivu Belt) were cleared by the AfDB and disclosed in the country on October 26, 2023, and by the AfDB on October 27, 2023. The RAPs for Muhazi and Sake (Mugesera) were disclosed by the borrower on October 28, 2023, and by the AfDB on October 30, 2023. Evidence of stakeholder engagement and public consultation by the borrower is clearly and adequately demonstrated in the ESIA reports, which contain a list of participants consulted, consultation dates and venues, including issues and responses emanating from the stakeholders consulted. Prior to stakeholder engagement and public consultation, the Bank confirms that stakeholder identification, mapping, and analysis were undertaken, followed by consultations via key informant interviews (targeting key informants like technical staff, district authorities) and public meetings (targeting interested and affected communities) in the program Area of Influence (AoI).