Rwanda and Africa50, a pan-African infrastructure investment platform, have signed a deal which will see the latter develop and finance the country’s grand Kigali Innovation City (KIC) project.
The agreement was sealed on the sidelines of the Africa Investment Forum in Johannesburg, South Africa, which ended on Friday.
Paula Ingabire, the Minister for ICT and Innovation, told The New Times that Africa50 is coming as an early stage project developer for the Kigali Innovation City.
“As we go into the project development stage we start to look for partners that will help us to do a number of activities. One of them is jointly working together to do a master-plan, look at the financing requirements for the project and start identifying financing partners to pitch for them,” she said.
She added that the Africa50 will work with the Government from the project development stage all through to the project financing stage.
The financing stage is a phase where the Government will work to secure equity and debt as well as begin the construction of buildings within the Kigali Innovation City.
The minister said Africa50 will work on what is called the Digital Innovation Precinct. This is a facility that will house all the technology companies, both the international firms that the Government is trying to attract into the ecosystem and local companies.
Another segment of the Digital Innovation Precinct will be a mix of residential facilities that will accommodate employees working for companies within the ecosystem.
“KIC has been designed as a mixed-use development where people can live and work. We have commercial rental offices, we have apartments and hotels and retail facilities,” Ingabire explained.
She disclosed that the Government has already done the financial modelling of these activities, highlighting that it will require $315 million (about Rwf278 billion) to implement the real estate portion of the project.
Part of the deal will see Africa50 invest money in the real estate section of the project. How much it will invest has not yet been disclosed, but the minister said Africa50 will come in as equity investor.
Under the terms of agreement, it will also help select additional partners, including other development finance institutions and private sector lenders.
Africa50 brands itself as an organisation that has vast experience in project development, financial structuring, as well as infrastructure development expertise.
KIC in detail
KIC, located in Kigali’s Special Economic Zone, is set to accommodate world-class universities, technology companies, biotech firms, and commercial and retail real estate on 70 hectares of land.
The project is valued at about $2 billion. This is according to the financial modelling done by McKinsey on behalf of Rwanda.
Some of the varsities that have started to set up campuses in the area or are in the process of doing so include Carnegie Mellon University (CMU), African Institute for Mathematical Sciences (AIMS), and African Leadership University (ALU). Each of these is already operating in Rwanda.
Carnegie Mellon University’s campus is nearing completion, while AIMS and ALU have secured investments to start building their own facilities. Another player is Kwetu seeks to build a world-class digital studio there.
With this project, Rwanda wants to attract players that will help achieve its vision of becoming a knowledge-based economy.
The project is expected to create over 50,000 jobs and generate some $150 million in ICT exports annually, as well as attract over $300 million in foreign direct investment.
Over 2,600 students are expected to graduate annually from the universities inside KIC over 30 years, adding to Rwanda and Africa’s pool of tech-savvy entrepreneurs.
Prime Minister Edouard Ngirente, who was also in South Africa for the continental investment forum, said the project will serve as an Africa-focused innovation hub and a holistic ecosystem of technology clusters.
“This innovative effort is the first of its kind in the continent. It will have pan-African development impact, both in terms of economic and human capital,” he is quoted in a statement as saying.
The premier added that the full success of the project requires concerted efforts to mobilise more private investors.
Speaking at the signing ceremony in South Africa, Africa50’s Ebobissé said the project “has significant socio-economic impact and aligns well with our vision of promoting innovation and ICT development in Africa”.
The New Times