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The Polish Development Bank (BGK) has provided direct financing to the Rwandan treasury for the purchase of a Polish milk cooling system. The credit, with KUKE insurance, amounts to EUR 23 million. This is the first financing of its kind provided by any Polish bank.

Bank Gospodarstwa Krajowego (BGK) has provided direct financing to the Rwandan treasury in the structure of a buyer's credit. The long-term credit, up to EUR 23 million (approximately PLN 88 million), is for the purchase of a milk cooling system from a Polish manufacturer. The value of the order significantly exceeds the previous annual value of Polish exports to Rwanda, which hovered around several million euros.

"The buyer's credit structure, where the buyer is the government of another country, is pioneering financing in the Polish banking sector. Thanks to it, the annual value of Polish exports to this market will increase from several to tens of millions of euros. Rwanda is perceived as one of the most business-friendly countries in Africa. We have been observing increased interest in this market from Polish exporters for some time now. This mainly concerns sectors related to agriculture, mining, and services. I am pleased that BGK supports Polish entrepreneurs with international ambitions, is breaking new ground in domestic banking, and at the same time responds to the development needs of poorer countries," – points out Marek Tomczuk, member of the BGK management board.

Support for the Rwandan Economy The contract for the purchase of the Polish milk cooling system is of strategic importance for the socio-economic development of Rwanda. The delivery of nearly 400 installations to local milk collection points is intended to reduce milk losses due to improper storage and increase production capacity and access to dairy products.

"The agreement we have signed is a testament to the rapidly developing bilateral cooperation between Rwanda and Poland. Both sides are exploring further opportunities for economic cooperation," – says Dr. Uzziel Ndagijimana, Rwandan Minister of Finance and Economic Planning.

Increased Presence of a Polish Company in Africa The Polish exporter and beneficiary of the credit funds is Faspol, a company from Łódź. It is a medium-sized company that designs and manufactures specialized tanks for industries including food and chemicals. The contract financed by the BGK credit was concluded by the Polish manufacturer with the Rwanda Agriculture and Animal Resources Development Board. Rwanda is not Faspol's first export market. The Łódź-based company has been operating in Africa since 2016. Previously, it supplied products and services to customers in Kenya, Tanzania, Ghana, and Senegal. Its largest contract in Africa was the delivery of 350 milk cooling installations in Kenya under a credit agreement between the Polish and Kenyan governments.

"These were two intensive years of visits to Rwanda, preparing concepts and projects, and difficult negotiations. That's why we are happy that Rwanda will be the next market where our solutions will contribute to increasing food security. Thanks to our installations, daily milk production will increase by almost 2 million liters. This means that this raw material will become more accessible to Rwandans," – notes Marcin Kaleta, co-owner of Faspol.

Export Secured by Insurance In this transaction, the debtor is a public entity – the Rwandan Ministry of Finance and Economic Planning, which significantly reduces the risk of non-payment. However, the BGK credit is additionally secured by a KUKE policy against political risk. Insurance guaranteed by the Polish State Treasury is commonly used for financing exports and investments to developing countries. KUKE instruments protect against the consequences of commercial or political risk, or force majeure events – such as war or natural disasters – that may prevent payments from being made.

"Although Rwanda belongs to the group of least developed countries, it is also perceived as a market with relatively low investment risk and good prospects for business. So far, it has avoided the troubles of many other African countries that, due to excessive borrowing, the pandemic, the consequences of the war in Ukraine, and global interest rate hikes, have found themselves on the brink of insolvency. The transaction supported by BGK and KUKE for the Polish manufacturer will serve to modernize agricultural production in Rwanda and develop local communities. We are working on further investment projects that – by stimulating our exports – will also contribute to raising the living standards of the country's inhabitants," – emphasizes Janusz Władyczak, President of KUKE.

Since 2009, BGK has supported over 120 export transactions in 19 African countries. The largest share was in the markets of Egypt, Kenya, Angola, Mali, and Tanzania. Contracts were carried out by Polish entrepreneurs from the food, medical, furniture, manufacturing, agricultural, hi-tech, and transport sectors.