IFC Issues $17M Bond to Boost Rwanda’s Capital Markets and Digital Growth

In a significant boost for Rwanda’s financial sector and digital development, the International Finance Corporation (IFC)—a member of the World Bank Group—has issued a 24 billion Rwandan franc bond (approximately USD 17 million), marking its return to Rwanda’s domestic capital markets after more than a decade.

The eight-year amortizing bond, listed on the Rwanda Stock Exchange, is a critical milestone in strengthening local capital markets and demonstrates growing investor confidence in Rwanda’s economy. The proceeds from the bond will fund a digital infrastructure project, providing essential local currency financing to help mitigate exchange rate risks often associated with borrowing in foreign currencies like the US dollar.

Oversubscribed and Investor Confidence High

The issuance was met with strong demand from a diverse pool of institutional investors, including pension funds, insurance companies, commercial banks, and asset managers. It was 1.75 times oversubscribed, underscoring robust appetite for quality local currency instruments backed by a triple-A rated issuer like IFC.

The bond carries a coupon rate of 10.50%, about 0.55% below the interpolated government yield, making it not only attractive to investors but also cost-efficient for the issuer. BK Capital and Rand Merchant Bank served as co-lead managers on the transaction, reflecting the growing role of regional investment firms in structuring and managing complex financial products.

Supporting Local Currency Financing and Market Deepening

This is IFC’s second onshore Rwandan franc-denominated bond, and the first since 2014, when it introduced the concept of the “Umuganda bond”—a term coined for domestic Rwandan franc issuances by non-resident entities. The original Umuganda bond was a historic first for Rwanda’s domestic bond market and set the stage for future capital market innovation.

Yusuf Murangwa, Rwanda’s Minister of Finance and Economic Planning, emphasized the strategic value of the new issuance:

“IFC’s second Umuganda bond will support our work to deepen domestic capital markets in Rwanda. Bond issuances by international borrowers such as IFC create new investable opportunities for domestic investors while raising much-needed Rwanda franc financing for local businesses.”

Enhancing Digital Connectivity Through Infrastructure Investment

The capital raised will go directly into a digital infrastructure project aimed at strengthening Rwanda’s technological backbone. This is particularly vital as the country moves forward with its ambitious Digital Transformation Strategy, which envisions inclusive and sustainable access to ICTs as a pillar of economic development.

Mary Porter Peschka, IFC’s Director for Eastern Africa, highlighted the broader development impact:

“We are excited to return to Rwanda's domestic capital markets with this bond that will support critical infrastructure and deepen domestic capital markets in the country. The bond offers investors exposure to IFC’s triple-A rating, while also enabling IFC to provide local currency financing to an important project that will enhance digital connectivity.”

IFC’s Continued Role in Capital Market Development

Beyond issuing bonds, IFC has been a long-term supporter of capital market reform in Rwanda. Through the Rwanda Capital Market Development Project, a joint IFC–World Bank initiative, IFC is working with national stakeholders to:

• Improve secondary market liquidity in government securities

• Expand the supply and issuance of non-government bonds

• Develop a more diversified and professional investor base

• Enhance long-term access to local currency finance for priority sectors like infrastructure, housing, and SMEs

This work is central to Rwanda’s long-term vision of building a robust capital market that can serve as a reliable source of domestic financing for economic development.

Offshore Issuances Complement Local Strategy

While this bond marks IFC’s return to the onshore market, it has remained active in Rwandan franc-denominated debt more broadly. In 2023, IFC issued two offshore Rwanda franc-denominated bonds, listed on the London Stock Exchange and the Luxembourg Stock Exchange, respectively. These offshore issuances broaden global exposure to Rwanda’s currency and reinforce the growing internationalization of its financial system.

Building Blocks for Regional Integration and Investment

This latest bond is part of a broader effort to connect African economies to international capital markets while nurturing strong domestic ecosystems for finance and investment. It also aligns with the African Continental Free Trade Area (AfCFTA) goals of boosting intra-African capital mobility and investment flows.

As Rwanda continues to position itself as a regional financial hub, instruments like the Umuganda bond signal the country’s increasing ability to attract global finance into local projects that promote development, digital inclusion, and economic resilience.