Investment Guarantee in Rwanda

Provision of the Constitution on Investment

Article 30 Constitution of Rwanda puts the responsibility on Government to   protect the capital invested and shall not acquire the rights of an investor on a registered investment enterprise except due to public interest according to periods and procedures provided by law in consideration of prior payment of adequate compensation in foreign convertible currency in a period not exceeding twelve months from the date of acquisition and such amount is freely repatriated to a country of the investor’s choice without being subject to any form of tax.

Investment Treaty between Government of Rwanda and Government of America

Article 10-11 the Investment Treaty with Rwanda signed in Kagali on 19 February 2008 between Government of America and Rwanda Government by the committee of Foreign Relations concerning the protection of investment. Its provisions are aimed at ensuring transparency to investors under laws of regulations, procedures, administrative rulings of general application provided to interested persons and other party reasonable opportunity.

International Centre for the Settlement of Investment Disputes (ICSID) and African Trade Insurance Agency (ATI)

Rwanda is a member of the International Centre for the Settlement of Investment Disputes (ICSID) considered to be the leading international arbitration institution devoted to investor state dispute settlement supported by the World Bank and Lloyds of London.

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Benefits of membership with ICSID include the following;

  • ICSID removed major impediments for free international flows of private investment posed by non-commercial risk.
  • ICSID is an impartial forum providing facilities for the resolution of legal disputes between eligible parties through conciliation or arbitration procedures.
  • ICSID plays an important role in international investment and economic development.

Rwanda is a member of the African Trade Insurance Agency (ATI) supported by the World Bank and Lloyds of London.

Benefits of membership with ATI include the following;

  • ATI covers risk against restrictions on import and export activities, inconvertibility, expropriation, war, and civil disturbances.
  • ATI is a commercial Insurance Agency that provides insurance policies that cover uncommon risk that have been scaring investors from investing in Africa.

East African Court of Justice for the settlement of disputes

Rwanda is also a member of the East African Court of Justice for the settlement of disputes arising from or pertaining to the East African Community (EAC)

International Insurance Schemes

February 19 2008, a Treaty was signed between the Government of the United States of America and Government of Republic of Rwanda by the Committee of Foreign Relations

to protect investors from any discriminatory measures during the full cycle of investment as regards establishment, acquisition, expansion, management, conduct and operations.

Multilateral Investment Guarantee Agency (MIGA)

In October 27, 1989 Rwanda signed and ratified a guarantee with Multilateral Investment Guarantee Agency (MIGA) against non-commercial risks to enterprises that invest in member countries. MIGA promotes foreign direct investment into developing countries by insuring investors against political or non commercial risk specialised in high risk in low income Countries. The insurance covers risk relating to currency transfer restrictions, expropriation war, civil disturbance and breach of contract

The overseas Private Investment Corporation (OPIC)

OPIC has provided a single investment guarantee in Rwanda to Sorwathe, an American-owned tea factory because of Rwanda’s political, economic and currency stability, officials have expressed interest in expanding OPIC involvement in Rwanda and are currently evaluating several projects in Energy, Education, Construction and Tourism.

The Export-Import Bank (EXIM)

EXIM has a program to insure short-term export credit transactions involving various payment terms, including open accounts that cover exports to the U.S. of consumer goods, services, commodities, and certain capital goods.

SWISS RE-BACKED MICRO INSURANCE PROJECT

Swiss re-backed micro insurance project is a partnership between Swiss Re Corporate Solutions, the Syngenta Foundation for Sustainable Agriculture, the Rwanda Ministry of Agriculture and Animal Resources, the One Acre Fund and Rwandan insurer SORAS. The highlights of the project include the following;

  • It’s offering low-cost insurance to 20,000 farmers in the southern and western provinces of Rwanda to protect them from financial losses against repeated bad weather destroying their crops.
  • Insures low income people against specific perils in exchange for premium proportionate to the likelihood and cost of the risk involved.

Agriculture Guarantee Fund

This is a fund that was put in place by the Rwandan Government that covers any productive projects developed in agricultural value chain. The fund is managed by the central Bank to boost investment in the agricultural sector and aimed at promoting financing viable rural projects without enough collateral or regarded risky by Banks.

SME Guarantee Fund

The fund guarantees loans made by participating financial institutions within the framework of promoting SMEs in Rwanda in any productive investment other than in the agricultural sector.

Women Guarantee Fund

This was established in 1998 by the Ministry of Gender and Women in Development, in association with the Commercial Bank of Rwanda to promote women projects. The goal of this fund is to make financing businesses for women easier. The government has endeavoured to make the process easier by enacting laws to make lending more accessible. It is allowing the use of all possible moveable assets to be used as collateral .

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