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Rwanda accepts India loan to build 27.5-MW Nyabarongo

Rwanda lawmakers have approved legislation allowing the government to accept the first US$20 million tranche of an US$80 million loan for construction of the 27.5-MW Nyabarongo hydroelectric project on Rwanda's Nyabarongo River.

Rwanda's New Times reported approval was given to a funding agreement signed in October by the governments of Rwanda and India. India is providing a line of credit via the Export-Import Bank of India. Finance Minister James Musoni said the project is to cost US$97.7 million, with the Rwanda government contributing the funds beyond the US$80 million credit.

The Ministry of Infrastructure recruited consultants in March to perform inspection and construction supervision. (HNN 3/5/08) Musoni said, under terms of the financing, India companies are to build the project with 85 percent of the equipment to come from India.

The loan is to be repaid over 20 years at an interest rate of 1.75 percent with a five-year grace period.

Musoni said work is expected to begin in September and be completed in 2011.

Nyabarongo (also called Nyaborongo) is to be located between Ngororero District in Western Province and Muhanga District in Southern Province.

Late last year, Rwanda recruited consultants to perform an environmental impact assessment of the project. Previously, the ministry awarded a contract to Delphos International of the United States to help determine how Nyabarongo and the 9-MW Rukarara project should be implemented and financed.

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