AfDB plans $400m investment in Rwanda’s agriculture sector

The African Development Bank (AfDB) plans to invest more than $400 million (about Rwf588 billion) in Rwanda’s agriculture sector over the next three years, as the bank seeks to shift more financing toward productive sectors.

The planned investment follows a request by the Rwandan government and is aligned with the country’s second National Strategy for Transformation (NST2), according to the bank’s Rwanda 2025 Country Portfolio Performance Review Report released on Thursday, August 20.

The move would mark a significant shift in AfDB’s financing portfolio in Rwanda, where infrastructure projects currently account for the overwhelming majority of the bank’s investments.

As of January 31, AfDB had 29 active operations in Rwanda, including 27 public-sector and two private-sector projects, with total commitments of about $2.6 billion (about Rwf3.8 trillion).

Infrastructure accounts for 87 percent of the portfolio, a concentration the bank said poses a significant risk and could make it more difficult to justify additional infrastructure-only investments.

“In response, and in direct alignment with NST2, the Government of Rwanda has requested a strategic pivot, with the Bank expected to invest over USD 400 million in agriculture over the next three years,” the report said.

The reorientation is expected to help rebalance AfDB’s country portfolio, reduce concentration risks and increase financing for priority productive sectors, the bank said.

Infrastructure remains dominant

AfDB said its Rwanda portfolio reflects the country’s development priorities under its 2022-2026 Country Strategy Paper, as well as the bank’s Ten-Year Strategy for 2024-2033.

Water and sanitation account for 34 percent of the portfolio, making it the largest sector, followed by energy at 30 percent.

Finance accounts for 10 percent, transport 9 percent and multi-sector operations 11 percent.

Agriculture, communications, social and urban development together account for the remaining 6 percent.

The bank said its infrastructure investments have already contributed to improvements in key areas of Rwanda’s development.

Following the 2024 Mid-Term Review of the Country Strategy Paper, AfDB reported more than 195,000 new energy connections, 300 kilometres of upgraded regional roads and access to clean water for 67 percent of the population.

The bank also mobilised $127 million (about Rwf187 billion) in additional financing from development partners, including the Asian Infrastructure Investment Bank and the OPEC Fund, to support energy and aviation skills projects.

Agriculture gets bigger financing role

The planned investment is expected to give agriculture a much larger role in AfDB’s Rwanda portfolio at a time when the government is seeking to increase productivity and accelerate growth in productive sectors.

Agriculture remains central to Rwanda’s economy and rural livelihoods, while NST2 places emphasis on transforming the sector through increased productivity, value addition and private-sector participation.

AfDB had already signalled increased support for the sector.

In 2025, the bank announced plans to inject about $300 million (about Rwf432 billion) into Rwanda’s agriculture sector in 2026.

The new three-year commitment would therefore take the bank’s planned agriculture financing to a significantly higher level and represents a broader effort to diversify its investments in Rwanda.

The shift also reflects AfDB’s wider objective of aligning its country operations more closely with Rwanda’s development priorities while maintaining support for infrastructure that has traditionally dominated its portfolio.

By Prince Ruzigana