Rwanda and the Polish development bank Bank Gospodarstwa Krajowego (BGK) have inked a finance deal worth €23 million (about Rwf29.9 billion).

After the export contract between the Rwanda Agriculture Board and Faspol for the delivery of milk cooling installation with extra equipment and building components is finalized, the long-term loan will be utilized to buy a milk chilling system from a Polish company, Faspol.

The goal of delivering around 400 systems to nearby milk collection locations is to boost production capacity, improve accessibility to dairy products, and minimize milk losses from correct storage.

This project’s implementation could have a significant impact on the nation’s socioeconomic development, particularly in a sector where value addition has not yet been added.

According to Uzziel Ndagijimana, Minister of Finance and Economic Planning, the credit financing agreement has a 12-year term with a three-year grace period. “The agreement we are signing today is a testimony of the fast-growing bilateral cooperation between Rwanda and Poland. The two parties are exploring more opportunities for economic cooperation.”

The BGK management board member Marek Tomczuk praised the speed at which the arrangement was negotiated and mentioned that Rwanda is the first nation in Africa to use the bank’s funding facility.

He stated that the sovereign bank will keep collaborating with Rwanda’s public and private sectors in addition to the agriculture sector. In addition, it has already selected a number of industries, including IT, infrastructure, mining, food processing, education, and defense, in which Polish companies may be active.

“This agreement will open a new chapter in cooperation between our countries and it should also be a trigger for other Polish companies to start doing business here,” he said.

According to Eric Rwigamba, State Minister for Agriculture and Animal Resources, the development will drastically alter people’s means of subsistence, particularly for those who raise animals. They will be able to sell their goods in more organized and secure markets and at better prices.

Rwanda pledged in December 2022 to raise milk output by 34% in one way. Rwigamba claimed that despite several factors being addressed, there has been little progress towards reaching the target.

The largest agro-processing company in Rwanda, Inyange Industries Ltd., has earlier declared plans to establish a milk powder factory with an anticipated expenditure of $45 million (about Rwf55.6 billion). It was planned for the production to begin in May 2023.

As one kilogramme of milk powder is produced from every ten liters of liquid milk, the plant is anticipated to be able to handle 500,000 liters of milk in liquid form every day, or 50 tons. With that, it will have an annual milk powder capacity of about 15,000 tonnes.