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Cablegate: Rwanda and Opic - Projects Available, Obstacles

VZCZCXYZ0000
PP RUEHWEB

DE RUEHLGB #0414 1650941
ZNR UUUUU ZZH
P 130941Z JUN 08
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC PRIORITY 5382
INFO RUEHBS/AMEMBASSY BRUSSELS 0239
RUEHJB/AMEMBASSY BUJUMBURA 0327
RUEHDR/AMEMBASSY DAR ES SALAAM 1142
RUEHKM/AMEMBASSY KAMPALA 1910
RUEHKI/AMEMBASSY KINSHASA 0462
RUEHLO/AMEMBASSY LONDON 0245
RUEHNR/AMEMBASSY NAIROBI 1238
RUEHFR/AMEMBASSY PARIS 0506

UNCLAS KIGALI 000414

SENSITIVE
SIPDIS

DEPT FOR USTDA A. LUPO, OPIC J.SIMON

E.O. 12958: N/A
TAGS: ECON EAID ETRD PREL PGOV RW
SUBJECT: RWANDA AND OPIC - PROJECTS AVAILABLE, OBSTACLES
REMAIN

1. (U) Overseas Private Investment Corporation (OPIC)
Executive Vice President John Simon met with Government of
Rwanda (GOR) officials, members of the private sector, and
potential project partners during a visit to Rwanda June 4
and 5. In these discussions, Simon described to receptive
audiences the financial products and services OPIC can
provide to projects with U.S. investment capital, as well as
current and potential OPIC-supported projects in Rwanda.

2. (SBU) Over the course of several meetings, GOR ministers
and other officials from the Ministries of Infrastructure,
Investment and Industry, Finance, Agriculture, and Natural
Resources as well as the Rwandan Import and Export Promotion
Authority (RIEPA) expressed interest in attracting US
investors to Rwanda and in taking advantage of OPIC's
services. Officials cited housing, agriculture and forestry,
railway transport, and energy as priority sectors and
welcomed the prospect of OPIC providing support for projects
with U.S. investor involvement. One of these, a Burlington
Northern/Santa Fe (BNSF) railway project that would link
Isaka, Tanzania to Kigali, Rwanda, is under consideration to
receive up to USD $250 million in financing from OPIC.
Minister of Infrastructure Linda Bahire provided information
on the status of a feasibility study undertaken by Deutsche
Bank (DB) for the railway. Separately, Simon noted that
USTDA is also conducting a major study on railway
infrastructure in the region that will supplement the DB
study and address some issues missing from it. He emphasized
the need for coordination of efforts on the expansive
regional project whose cost is projected at USD $1 billion.

3. (SBU) GOR officials said resource constraints and an
underdeveloped local business culture created challenges for
their economic growth efforts, and for some potential OPIC
projects in particular. For example, Minister of Agriculture
Christopher Bazivamo expressed doubt that the GOR could
provide an advance of USD $2 million to a bamboo forestry
initiative that is seeking OPIC financing, although the
ministry had previously shown interest in pursuing the
partnership. Other potential OPIC-support recipients noted
difficulties they encountered due to regulatory and capacity
gaps within the GOR. An individual working on housing
financing shared his frustration with the lack of land titles
and other documentation necessary for establishing systems of
collateral and with an absence of government policy on and
understanding of liens.

4. (SBU) Comment: OPIC has a long history of working in
Rwanda and GOR officials seem very keen on its continued
presence in the country. Without sufficient U.S. investor
interest, regulatory progress, and in the case of the bamboo
initiative, GOR financial backing, however, the GOR will have
difficulty taking full advantage of OPIC assistance. End
comment.

5. (U) Vice President Simon did not clear this message.

ARIETTI

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