RWANDA – Rwanda’s dairy sector, which contributes 10% to the country’s agricultural GDP, is set to receive a boost with a US$24.3 million loan from Poland.
The loan agreement was signed by the Ministry of Finance and Economic Planning in Rwanda on October 26 with the Bank Gospodarstwa Krajowego (BGK), the Polish national development bank.
The financing represented the first sovereign loan provided by a Polish bank, highlighting the growing cooperation between the two countries.
The funds will be utilized to acquire a milk cooling system and related equipment from the Polish refrigeration solutions provider, Faspol.
This investment aims to enhance the handling and preservation of fresh milk in Rwanda, which is a significant challenge for the local dairy industry.
The operation involves the delivery of nearly 400 cooling installations to local milk collection points in Rwanda aiming at reducing losses resulting from improper storage practices and increasing the production capacity and accessibility of dairy products in the country.
Rwanda’s fresh milk production reached over 861 million litres in 2019, according to data from the Ministry of Agriculture and Animal Resources.
The investment in cooling and storage infrastructure is expected to further boost the dairy sector and contribute to the socio-economic development of Rwanda.
“The buyer’s credit for Rwanda is a cutting-edge financing within the Polish banking sector. It opens a new chapter in Poland-Rwanda trade relations, as Rwanda is considered one of the friendliest countries for doing business in Africa,” Marek Tomczuk, a member of the management board at BGK, stated.
“I am glad that the Polish Development Bank supports Polish exporters while addressing the developmental challenges of African countries.”
Dr. Uzziel Ndagijimana, the Minister of Finance and Economic Planning, emphasized the significance of this agreement as a testament to the growing bilateral cooperation between Rwanda and Poland, with both parties exploring further economic opportunities.
“This investment is vital for Rwanda’s dairy sector development, as it offers a pathway out of poverty for many Rwandan households,” he said.
Meanwhile, the national milk production in Rwanda has increased from 142,511 Metric Tons in 2005 to almost 1 billion Metric Tons in 2022 and is expected to reach 1,274,554 Metric Tons of milk per year by 2024 as per the National Strategy for Transformation (NST1).
The government of Rwanda and its development partners have deployed efforts to establish Milk Collection Centers (MCCs) to ensure a smooth gathering and quality testing of produced milk as well as dairy processing establishments for value addition.
Presently, according to MINAGRI, the country counts a total of 132 MCCs with a total milk cooling capacity of 483,000 L scattered in different districts; and 50 dairy processing units including 7 large processing plants and 43 Dairy Small and Medium Enterprises (SMEs) with the total processing capacity of 254,000 liters per day.