VZCZCXYZ0010
RR RUEHWEB

DE RUEHLGB #1114/01 3441512
ZNR UUUUU ZZH
R 101512Z DEC 07
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC 4964
INFO RUEHDS/AMEMBASSY ADDIS ABABA 0145
RUEHJB/AMEMBASSY BUJUMBURA 0206
RUEHDR/AMEMBASSY DAR ES SALAAM 1022
RUEHKM/AMEMBASSY KAMPALA 1782
RUEHKI/AMEMBASSY KINSHASA 0341
RUEHNR/AMEMBASSY NAIROBI 1092
RUEHFR/AMEMBASSY PARIS 0385

UNCLAS KIGALI 001114 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR AF/C 
DEPARTMENT PASS USTDA: EEBONG 
DEPARTMENT PASS USTR: WJACKSON 
DEPARTMENT PASS COMMERCE: RTELCHIN 
DEPARTMENT PASS OPIC: BCAMERON 
ADDIS ABABA FOR LISA BRODEY 
 
E.O. 12958: N/A 
TAGS: EFIN ECON PGOV EINV ENRG ETRD EPET BTIO RW
SUBJECT: RWANDA MONTHLY ECONOMIC REVIEW 
 
REF: KIGALI 1092 
 
 DONOR SUPPORT 
--------------- 
¶1.  EU Increases Aid:  The European Union (EU) Commissioner 
for Development and Humanitarian Aid Louis Michel announced 
that the EU will increase its aid to Rwanda by 30 percent to 
USD 313 over the next five years.  Michel announced that the 
EU considers Rwanda one of the three best performers among 
the Africa, Caribbean and Pacific (ACP) countries, and the 
increase is in recognition of that accomplishment.  In fact, 
80% of the EU's aid will be channeled to direct budget 
support.  In the last five years, the EU has given Rwanda 
approximately USD 204 million in aid. 
 
¶2.  UN Consolidates Assistance:  Finance Minister James 
Musoni announced that under the "One UN" program, UN agencies 
will make a contribution of USD 488 million to Rwanda over 
the next five years.  The "One UN" program consolidates UN 
agencies operating in Rwanda under one roof to achieve the 
eight Millennium Development Goals (MDGs).  A single UN 
budgetary framework will provide a complete picture of total 
support to Rwanda under the UN Development Assistance 
Framework (UNDAF).  The program will focus on five key areas 
drawn from national priorities articulated in the Economic 
Development Poverty Reduction Strategy (EDPRS):  good 
governance, education, health, social cohesion, and 
environmental protection.  Rwanda was selected as one of the 
eight pilot countries for the "One UN" program. 
 
¶3.  Hydro Power Grant:  The EU announced a USD 3 million 
grant to carry out feasibility studies that will help Rwanda 
produce hydroelectric power at the Rusizi River falls, which 
has the potential to produce 82 megawatts (MW) of electricity 
(Note: total annual electricity demand for Rwanda in 2006 was 
80MW.  End Note).  If successfully developed, Rwanda would be 
able to export power to countries in the energy-hungry Great 
Lakes Region.  The study is expected to take two years and 
will be carried out by German firm Bureau Fichtner. 
 
¶4.  New Weaving Center:  The German Cooperation (GTZ) opened 
a USD 35,000 training center for a basket weavers' 
cooperative in the Muhanga district of the Southern Province. 
 The baskets will also be sold at the center.  GTZ will also 
attempt to find new markets in Europe. 
 
¶5.  Development Partners Meeting:  The Government of Rwanda 
(GOR), in collaboration with the donor community, hosted a 
two-day conference under the theme "Stimulating Growth for 
Poverty Reduction."  The conference's goals were to provide a 
framework for predictable funding to successfully implement 
Rwanda's EDPRS andarticulate Rwanda's key strategies for 
development (reftel). 
 
NEW LOANS 
--------- 
¶6.  Infrastructure Loans:  The Arab Bank for Economic 
Development in Africa (BADEA) approved a loan of USD 10 
million to the GOR to rehabilitate the Gitarama-Mukamira 
road.  BADEA's total loan portfolio in Rwanda is now USD 82 
million, all for infrastructure projects - road repairs and 
hydroelectric power station rehabilitations. 
 
DEVELOPMENT INDICATORS 
---------------------- 
¶7.  Increased Life Expectancy:  According to the recently 
released World Bank Africa Development Indicators (ADI), 
Rwandans have made the greatest gains in life expectancy in 
Africa over the last decade.  Rwanda  registered a 12-year 
increment (FYI:  For the purposes of comparison, Uganda had a 
seven-year increase. End FYI).  Rwanda's life expectancy 
increased from 38.99 years in 2001 to 52.73 in 2007. 
 
ENVIRONMENT AND CONSERVATION 
---------------------------- 
¶8.  Annual Tree Planting:  The Ministry of Lands, 
Environment, Forestry, Water and Mines announced plans to 
plant at least 100 million trees across the country during 
the annual tree-planting campaign.  The UN Environment 
Program (UNEP) ranked Rwanda among the world's best 
performers in terms of planting trees.  Rwanda is ranked 
sixth in the world and third on the continent  behind 
Ethiopia and Kenya after planting over 50 million trees from 
January to the beginning of this  December. 
 
COMMERCIAL NEWS 
--------------- 
¶9.  Increased Airport Charges:  The Civil Aviation Authority 
(CAA) announced plans to increase airport charges, some by 
more than 50 percent in 2008.  This increase would double 
CAA's revenue from the current USD 8.5 million to an expected 
USD 17 million.  CAA is also looking to raise money from 
increased rent charged to duty-free shops and airline 
companies. 
 
¶10.  Cement From China:  The Ministry of Commerce Secretary 
General Justin Nsengiyumva announced plans to import cheap 
cement from China to augment the local supply, as the price 
of cement in Rwanda has increased by 25 percent in the past 
three months alone.  The country's current annual demand is 
estimated at 25,000 tons while domestic production is only 
12,000 tons.  Imports of cement from China will reduce the 
price of imported cement to USD 16 per bag of 50 kilogram 
from USD 20. 
 
¶11.  Oil in Rwanda:  Vangold Resources Limited, a Canadian 
firm specializing in the exploration of energy resources, 
signed a technical evaluation agreement with the Ministry of 
Infrastructure to explore potential oil deposits in the Kivu 
Graben basin along the frontiers of Rwanda and Democratic 
Republic of Congo (DRC).  Structurally, Kivu Graben is the 
southern extension of the Albertine Graben in Uganda, where 
companies Tullow Oil and Heritage Oil have made major oil 
discoveries.  The aeromagnetic and gravity surveys will be 
conducted over a period of 18 months at an estimated cost of 
USD 1.2 million.  Vangold was also granted a "Right of First 
Option" to negotiate and execute a contract for the 
exploration and exploitation of the hydrocarbons if deposits 
are identified. 
 
¶12.  Regional Farmer Support Center:  Starbucks chairman 
Howard Schultz announced that his company will open a 
regional Farmer Support Center in Rwanda.  The facility will 
have an agronomist on its staff and will collaborate with 
farmers in Rwanda and in the East African region on 
production volume and quality.  Starbucks' commitments 
include doubling the amount of East African coffee purchased 
by 2009 and more than USD 4 million to help East African 
coffee farmers improve their communities through funding 
projects such as schools and bridges.  Schultz also announced 
plans to provide USD 1 million to provide access to low 
interest loans to East African coffee farmers through the 
non-profit lender Root Capital. 
ARIETTI