VZCZCXYZ0004
PP RUEHWEB

DE RUEHLGB #0442/01 1821508
ZNR UUUUU ZZH
P 301508Z JUN 08
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC PRIORITY 5417
INFO RUEHBS/AMEMBASSY BRUSSELS 0247
RUEHJB/AMEMBASSY BUJUMBURA 0338
RUEHDR/AMEMBASSY DAR ES SALAAM 1153
RUEHSB/AMEMBASSY HARARE 0295
RUEHKM/AMEMBASSY KAMPALA 1922
RUEHKI/AMEMBASSY KINSHASA 0473
RUEHLO/AMEMBASSY LONDON 0253
RUEHNR/AMEMBASSY NAIROBI 1250
RUEHFR/AMEMBASSY PARIS 0514

UNCLAS KIGALI 000442 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PASS TO OPIC: JFLEWELLING 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD PGOV OPIC RW
SUBJECT: RWANDA HOSTS FIRST EAST AFRICAN COMMUNITY 
INVESTMENT CONFERENCE 
 
REF: KIGALI 417 
 
¶1. (U) Summary: On June 26-28, Rwanda hosted the 9th East 
African Community (EAC - Kenya, Tanzania, Uganda, Rwanda and 
Burundi) Heads of State Summit in conjunction with the 
first-ever EAC Investment Conference.  EAC leaders focused on 
the need to improve transportation and energy infrastructure, 
reduce trade barriers, harmonize intra-EAC customs and expand 
regional agricultural production.  The Heads of State called 
for a dialogue between Zimbabwe's ruling ZANU/PF and 
opposition MDC parties.  Rwanda's President Kagame was named 
incoming Chair of the EAC.  End summary. 
 
¶2. (U) In opening remarks to the first EAC investment 
conference held June 26-28 in Kigali, the leaders of Rwanda, 
Kenya, Uganda and Burundi (Tanzanian President Kikwete was 
not present for the opening ceremony but attended later 
events) emphasized the need to improve regional 
infrastructure including roads, rail, and power generation. 
Ugandan President Museveni highlighted the poor quality of 
the regions road network contrasting "third world" roads that 
last 15 years to European roads that last 50 years.  Museveni 
noted Uganda has set up a tax payer-supported energy fund of 
$215 million to develop hydroelectric power and his 
government has also budgeted $666 million in its 2008/9 plan 
to build and repair roads.  Rwanda's President Kagami decried 
the antiquated regional rail system and congested and 
ineffective ports noting "all those obstacles ruin rather 
than foster the prosperity that we all seek".  Kagami called 
the 2008 World Bank report on trade indicators a sobering 
reminder that "we need to fix these infrastructures" and 
complained that it takes almost a month for cargo from 
Mombassa and Dar es Salaam to reach inland destinations in 
Uganda, Rwanda and Burundi.  Kagame said East Africa has a 
dynamic industrial and commercial sector that can drive 
private sector-led socioeconomic transformation and 
emphasized regional development lies in the hands of the East 
Africans. 
 
¶3. (U) Kenyan President Kibaki agreed the EAC needed to 
address the challenge of poor infrastructure which remains a 
major constraint to investors.  Kibaki noted the size and 
market potential of the EAC with its 120 million people and 
combined GDP of $50 billion has improved the attractiveness 
of the region for business and investment.  Kibaki remarked 
that since the EAC set up the regional Customs Union (Rwanda 
and Burundi joined the EAC in 2007 but have not yet joined 
the customs union), trade within the EAC has grown from $1.3 
billion in 2003 to $2.2 billion in 2006.  Kibaki also 
supported ongoing negotiations among the EAC member states to 
set up a protocol to facilitate the free movement of people, 
goods and services in the region and called for an East 
African Political Federation. 
 
¶4. (U) During the plenary and breakout sessions discussion 
ranged from promoting regional competitiveness and trade and 
investment opportunities to financial mobilization and the 
role of ICT in fueling regional trade.  A number of foreign 
investment groups attended the event.  New York-based Merrin 
Management Corp. Chief Investment Officer Michael Stern told 
Emboffs that his company is actively looking for investment 
QEmboffs that his company is actively looking for investment 
opportunities in the region.  Contour Global Project Manager 
Jarmo Gummerus said his company expects to sign a methane gas 
concession and power purchase agreement with the Government 
of Rwanda (GOR) on or before July 10, 2008.  The methane gas 
to power project (reftel) will cost an estimated $260 million 
and generate 100MW to the Rwandan power grid by 2012. 
 
¶5. (U) The conference attracted over 1,000 participants from 
the region and around the world, and the large number at 
times overwhelmed the organizers.  Conference organizer 
Rwanda Investment and Export Promotion Agency (RIEPA) 
initially planned for 600-700 participants.  There were 
frequent delays in processing delegates through security 
check-points and scheduled events were delayed by as much as 
2-3 hours.  Despite these difficulties, most participants 
appeared pleased with the conference and lauded the GOR 
initiative to hold the event. 
 
¶6. (U) In a joint communique issued at the end of the EAC 
 
Summit, the Heads of State called for member states to 
expedite the implementation of the East African Power Master 
Plan in order to insure regional power supplies and to 
modernize agriculture to fill the current gap in regional 
food supplies.  On political issues, the leaders commended 
the prevailing peaceful conditions in Burundi and reaffirmed 
their commitment to the on-going peace process.  On Zimbabwe, 
the Heads of State called for dialogue between ZANU/PF and 
MDC, and asserted that conducting an election in the 
prevailing (political) conditions could not offer a 
long-lasting solution to the current crisis.  The Summit 
leaders unanimously elected President Kagame as the new Chair 
of the EAC. 
 
¶7. (U)  Comment:  Not unpredictably, the 9th EAC Summit 
highlighted obvious regional developmental needs in 
infrastructure and energy.  However, the recent entry of 
Rwanda and Burundi to the group appears to have reinvigorated 
the organization, encouraged a new enthusiasm for stronger 
regional integration and fostered a "can do" attitude from 
the Heads of State.  The size of the gathering, with over 
1,000 participants including more than 250 from outside the 
region, was an encouraging sign that investors are looking 
for opportunities in the EAC. 
ARIETTI