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This document does not constitute Government policy

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Investing in Rwanda – An OverviewNovember 2009

Rwanda – land of a thousand hills, home to a thousand opportunities

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A clear vision for growth through private investment set out by President Kagame (Vision 2020)

Politically stable with well functioning institutions, rule of law and zero tolerance for corruption

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Reasons for investing in Rwanda

Source: RDB

Robust governance

8.8% average year-on-year GDP growth since 2004, stable inflation and exchange rate

GDP growth rate in 2008 of 11.2%, highest among East African countries

Sustained high growth

Potential opportunities for investment abound, particularly in the following sectors: Infrastructure: Opportunities in rail, air transportation to further develop Rwanda as an EAC hub Agriculture: Backbone of economy, potential for growth through productivity and value addition Energy: Power generation, off grid generation and significant methane gas opportunities Tourism: Unique assets creating booming sector; growth potential in birding and convention Information and Communication Technology: Priority sector for achieving Vision 2020

Other attractive sectors include Real estate and construction , Financial services, and Mining

Untapped investment

opportunities

Most densely populated country in Africa with ~10M people, majority below the age of 20

A hub for rapidly integrating East Africa: located centrally bordering 3 countries in East Africa which has an existing Customs Union and forming a Common Market in 2010 for 125M people

Access to markets

Fastest global reformer of business regulations based on World Bank Doing Business Survey

Simple taxation, development of industrial parks and free trade zone, and creation of stock exchange

Increasingly attractive destination for FDI – $103M in 2008 represents 10x increase from 2005

Rwanda Development Board, an independent agency, created as a ‘one-stop centre’ for investors

Investor friendly climate

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A country of sustained growth and opportunity

3Source: Rwanda MINECOFIN, 2009; % of GDP minus adjustments (import duties), IMF World Economic Outlook 2009 *Industry – Non Manufacturing is mostly construction with a little mining and electricity and gas

Sustained Real GDP growth Outperforming the region on Real GDP growth

8.8% annual growth

‘08 Share of total ‘04-’08 growth rate

7%

9%

36%

48%

RWF (billions)

7.6%

15.0%

5.1%

11.0%

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A favourable and stable macro- economic environment

* Constant exchange rateSource: 2004-2007 NISR, 2008 MINECOFIN Projection, BNR, RDB analysis

12.2%

9.1% 8.9% 9.1%

15.4%

9.6%

5.8% 5.0% 5.0%

0%

5%

10%

15%

20%

2004 2006 2008 2010 2012

Single digit inflation 5 years of stable exchange rate (RWF to 1 USD)

0.0

0.2

0.4

0.6

0.8

2004 2005 2006 2007 2008

US

D B

illio

ns

*

Tax Non-tax revenue

Government revenues growing steadily

200

250

300

350

400

450

500

550

600

650Global food and fuel price increase

caused temporary spike, now under

control

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A country which is safe, secure and an easy place to live

Source: World Bank ‘Governance Indicators’ 2007, UN, press search, RDB

A country rebuilt and on the rise

Rwanda has been rebuilt since the traumatic events of 1994 and is a thriving, safe country

Kigali representative of this turnaround

A clean and green city, with the lowest crime of any capital city in the region

Winner of UN Habitat Award (2008) the highest award for an urban area

More stable than most emerging markets

World Bank Governance Indicator: Political stability (Higher is better)

Republic with elected President, Parliament of two houses (with most members elected from local bodies)

The judiciary system includes Supreme, High, District as well as Commercial courts

Robust governance creates long term stability

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Strong leadership has created a pro-business, near zero corruption country

Source: World Bank Governance Indicators, Rwanda ‘Vision 2020’, RDB

President Kagame, recognized as a ‘CEO President’, understands the need for private sector investment

Advised by a team of international business leaders

A bastion of near zero corruption

World Bank Governance Indicator: Control of Corruption (Higher is better)

A country with a clear vision

Vision 2020: “The major aspiration of Vision 2020 is to transform Rwanda’s economy into a middle income country...this will not be achieved unless we transform from a subsistence agriculture economy to a knowledge-based society, with high levels of savings and private investment.”

A President who understands business

“A mecca for venture capitalists”- CNN Money: Business 2.0

“Rwanda is the most undervalued stock on the continent and maybe in the world”

- Fortune Magazine

Respected by the business community

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A government committed to making it easier to do business

Source: World Bank ‘Doing Business’ Rankings 2010

Fastest reforming country in World Bank’s Doing Business 2010 rankingsBusiness regulations now easier in Rwanda than the average economy in Eastern Europe, Asia,

Middle East, Latin America and Africa

Rose record 76 places in World Bank’s global survey

4 major commercial laws passed in 2009 in addition to administrative changes that make it easier to start a business, employ workers, register property, get credit and be protected as an investor

Rwanda #11 in world for ease of starting business

2 steps in less than 3 days to register a company

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As an EAC custom union member, Rwanda has:

Duty free importation for products produced within EAC

Common external tariff: 0% on Raw materials and Capital Equipment; 15% on intermediate goods; 25% on finished goods

Constitutionally protected free repatriation of capital and profits

100% write off of R&D costs

Additional fiscal incentives in strategic sectors

Continuing work to simplify the taxation system

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A taxation system and infrastructure projects supporting growth in FDI

Source: RDB, BNR and MINECOFIN

Simple business taxation for investorsSpecialized infrastructure for industry and

trade

Kigali Industrial Park and Free Trade Zone under construction (completion end ‘09): Sites to have reliable infrastructure and

commercial services Easy access to the planned new Bugesera

International Airport

As a result of all these factors, FDI investment growing fast

Building robust capital markets

Stock exchange established in January 2008 with OTC transactions in bonds and equities

Global and Pan-African investors include Actis, Aga Khan hotels, MTN S. Africa, Starbucks, TiGO, Dubai World, Contour Global, Ecobank

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The Rwanda Development Board is proof that Rwanda is open for business

Source: RDB

Investor focused

Independent and influential

Built with global expertise

One stop centre for all investors

Created by consolidating all key agencies in government responsible for business registration, investment promotion, environmental clearances, privatization and specialist agencies which support the priority sectors of ICT and tourism as well as SMEs and human capacity development

Reports directly to the President

Guided by a Board composed of all the key Ministers (e.g., finance, commerce, infrastructure, agriculture)

Modelled on international best practices such as Singapore EDB

Advisory and hands-on support from global entrepreneurs and experts from Singapore Development Board, World Bank, IFC and the Office of Tony Blair

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Country Population in Millions

Kenya 35.3

Tanzania 39.7

Uganda 32.0

Rwanda 9.6

Burundi 7.9

A hub for investors to access the rapidly integrating East African market

Source: Data from IMF World Economic Outlook 10

A large market

EAC comprised of 125 million people with a combined GDP of over USD 70 billion

EAC: Taking real strides towards integration

Established a Customs Union (2005)

Working towards a Common Market in 2010, a Monetary Union by 2012 and, ultimately, a Political Federation

Functioning political and legal organs

Regional infrastructure projects are being financed and implemented and regional trade has increased

Efforts to combine the East African Community, the Common Market for Eastern and Southern Africa, and the Southern Africa Development Community underway, putting 600M people into a single market.

Existing bilateral trade agreements with the US and initiatives with the European Union (EU) and others in advanced stages

Rwanda: A gateway to Africa and the world

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Opportunities for investment

Source: RDB

Priority investment sectors: Infrastructure Agriculture Energy Tourism Information and Communications Technology Real estate and construction Financial services Mining

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Sector profile: InfrastructureRail, air, logistics investment opportunities abound to develop Rwanda as an EAC hub

Roads

Roads represent 90% of transportation in the country

Over 14,000 km (8,700 miles) of roads, ~20% of which is paved

Regional hub for road transport as it connects important regional players, from the east coast of Africa to the west coast

Source: RDB

There are no railroad systems available, but a new railway line is in the pipeline:

2 branches of the railway line are:

Isaka-Kigali railway project to link to the port of Dar Es Salaam

Rwanda-Burundi via Congo to link the southern Africa Cape Gauge railway network

Cost of $4B and is currently fundraising

Rail

The Kigali International Airport has an annual capacity of 4.4M passengers

Rwandair is the national air carrier with flights to number of regional destinations (Arusha, Entebbe, Nairobi and Johannesburg)

Other international airlines include Kenya Airways, Ethiopian Airlines, Brussels Airlines, China Postal Airlines, and African Star Airways

A new airport planned 40 km outside of Kigali, for estimated construction cost of $300M for Phase 1

Air

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Sector Profile: AgricultureWorld class exports but many opportunities for regional export expansion

Source: MINECOFIN, OCIR Cafe, RDB

Coffee – world class and winner of a number of international awards; main agricultural export with buyers including Starbucks and Sainsbury’s

Tea – relatively underdeveloped but high potential with 6% increase in volume creating 29% additional value to sector in 2008; buyers include Mark’s & Spencer’s in the UK

Many other opportunities – Dairy, fruits (many exotic varieties for juice), fresh cut flowers, silk and food crops for export to region

48%36%

16%

GDP Contribution, 2008

Services

Agriculture

Industry

Agriculture is the bedrock of the economy

Around 87% of the population is engaged in agricultural activities

Exports led by tea, coffee but many options

National strategy driving productivity, quality

Government and development partners have focused on improving quality through fertiliser distribution and farmer training programmes

This resulted in 15% growth in the agricultural sector in 2008 and rising prices for coffee

Privatization of tea plantations and factories has begun in 2009 and is ongoing

Further opportunities in coffee washing and roasting as the premium harvest grows

Also in distribution, markets and cold chain infrastructure for export products

Value addition is a major opportunity

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Sector profile: EnergyNew generation and methane gas can open access beyond Rwanda to neighbouring markets

Overview

Source: RDB, Ministry of Finance

80% of energy from wood combustion and electricity coverage levels low at 6%

Generation 60-69MW of electricity generation (50% hydro-

electric, 50% diesel) today

Recognising the strategic importance of the sector, the GoR has ambitious plans to more than double generation capacity to 130MW through methane gas, hydro (macro and micro) and 1 heavy fuel oil plant

For instance, in micro-hydro, 333 potential sites identified (50KW-1MW) by 2008, 2 constructed, 21 under construction and 10 scheduled

Methane Gas 50-55 billion m3 of methane gas in Lake Kivu:

1st Gas Concession and Power Purchase Agreement signed with Contour Global – 100MW KivuWatt power plant under construction expected to produce 4MW/hour for ~$324M

Further opportunities such as a 2nd concession at Lake Kivu and conversion of gas to liquid and gas to fertilizer

Power grid Power grid coverage is planned to expand to

67% of the region by 2012 through a $311M capital budget roll-out plan

Transmission and distribution networks to expand from 3,300km to 5,000km by 2012

Targeting 90% electricity from renewable source

246,000 ha of forests for carbon credit potential

Example: recent agreement with US/ UK based company funded by leading UK PE firm to produce biodiesel by planting 10,000 ha of Jatropha plants ($35M investment in 2 years) to address 15-20% of domestic diesel demand

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Renewable energy

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Visitor numbers have been booming

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Sector profile: TourismTourism sector booming, but significant opportunities remain

Source: ORTPN, KPS, RDB

Virunga National Park: natural habitat for 600 of the 800 rare mountain gorillas made famous by the work of Diane Fossey. Park includes a mountain lodge in the ‘Condé Nast Hot List’

The rainforests of Nyungwe National Park: home to rare chimpanzees, birds and elephants

Lake Kivu: surrounded by stunning beaches and dormant volcanoes covered by lush vegetation. A 4 star Serena resort is one of several hotels

Akagera National Park: offers the potential to be one of East Africa’s great safari destinations

Birding tourism: Rwanda has over 1/3 of Africa’s bird species, the highest concentration in Africa with 260 species in Nyungwe forest alone

In 2008, leisure visitors increased 50%

26% increase in business/conference visitors – a priority area of significant potential

There are 187 hotels and 4102 hotel rooms in Rwanda of which only 7 are upper range

The average room occupancy rate for upper range hotels was 70% in 2008 with foreign tourists accounting for 97% of bed nights sold

Rwanda has unique natural assets

In 2007, leisure tourists spent $209M, making the tourism industry the country’s largest foreign exchange earner

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Sector profile: ICTICT – Information and Communication Technology – top priority for 2020

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Overview of ICT

Attracted ~$500M in investment over the last three years by both private and public sector

The government has invested in building the ICT infrastructure through:

a 2,500km optic fiber that covers Kigali city and the entire country, with a total of 7 regional links to the neighboring countries

Kigali City Wireless Broadband due to be commissioned early next year

ICT park set up for investors in pilot phase

ICT in Rwanda currently encompasses, in varying degrees:

Wireline telephones

VoIP

Dial-up internet, ISDN based internet, broadband internet

Computer software use and development,

Computer hardware, assembly, and repair

Major players in telecom

Source: RDB

MTN Rwanda and Rwandatel are the dominant players ,offering fixed telephones, mobile telephones, and internet services. TiGO, the 3rd operator, is set to begin operation by end of ‘09

Between the two companies, there are approximately 2M mobile subscribers, representing 20% penetration

A sizeable private sector is growing around the networking and software development sectors, with Rwandan companies exporting services to Burundi and Eastern DRC

Rwanda is participating in a $24M World Bank project to connect its national backbone to submarine cable:

There are three optic Service Providers Seacom, Teams and Eassy, at the East Coast to link various African countries to the global network.

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Sector profile: Real estate & constructionGrowth creating boom in demand for commercial and residential real estate development

Source: RDB

Real estate is booming Residential real estate

In 2007, Rwanda’s development and public works sectors experienced a 10% growth creating a shortage of fully functional office space and residential housing

From 2003-2008,investment in the construction sector grew from $100M to $350M. In 2008, revenues from the general construction sector increased by 51% driven by:

Population growth of 2.8% combined with urban growth currently at 4% per annum

Growth of the middle class

Diaspora returning to Rwanda

As a result, there is also a shortage in construction material.

Rwanda imported $64.6M of construction materials in 2007 and $140M in 2008

This includes 100% of steel and a majority of other construction materials

GoR projects that by 2020 approximately 30% of the population will live in urban areas. To date, only about 5% of residents in Kigali own modern-style houses.

In Kigali alone, demand for housing is 8,000- 10,000 units per annum. The combined demand for housing countrywide is estimated to be ~25,000 units per annum

Commercial real estate

The recent increase in foreign investments has created a shortage of upper end office space with fully equipped telecommunications, utilities, and power. From 2003 to 2006 rent on these buildings increased between 50-200%

Type Rent price Construction cost

Residential $2500 - $4000 per unit

$200 – 215 per sq foot

Commercial $46 - $53 per sq foot $335 – 365 per sq foot

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Sector profile: Financial servicesThe banking sector remains relatively underpenetrated

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Overview

Source: RDB, Ministry of Finance

~ $200M of equity capital supporting ~$1B in total assets

Estimated 12% of the population had a bank account in 2007

20% sector growth rate in 5 years driven by:

GoR enforcement of banks meeting international banking standards

The “Financial Sector Development Program” which increased the minimum capital requirement from $2M to $8M and requires banks to prove they are qualified before receiving a charter

Policy, strategy and incentives in place to develop capital markets

The banking sector is comprised of eight commercial banks, one primary microfinance bank, one discount house, one development bank and one mortgage bank

Commercial banks represent 76% of the economy’s total financing while micro finance institutions serve 88% of depositors and 90% of borrowers

The microfinance sub sector consists of more than 50 relatively small institutions where ~ 11% of Rwandan assets and ~ 3.5% of the population hold accounts

The 3 largest local banks are:

Banque de Kigali (100% govt. owned)

BPR (98% private, including Actis)

BCR (80% private)

Ecobank, Access Bank and KCB are among the international banks with a presence in Rwanda

Key players

Interest rates in line with the region

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Sector profile: MiningUnexploited opportunities in ores, processing and diversification abound

Source: MINIRENA, RDB

Mineral exports have room for growth

Rwanda’s main mineral exports are ores processed to extract tin, coltan and tungsten

Only 25% of ~$ 200M potential output currently exploited

Significant opportunity to increase productivity through industrial mining

Work is being done to develop the sector

A national mining survey is being conducted to identify mineral deposits

A strong, investor friendly legal and policy framework being put in place

Opportunities in diversification and processing

Significant opportunities in processing ores

Diversification opportunities in quarries (for construction materials) and precious stones (gold, diamond, beryl, topaz, rubies, sapphires, gamets and other unexploited deposits have been identified

There are major peat deposits in the southwest of Rwanda which are only just being exploited and could be used for electricity generation or processed as an alternative to fire wood

Share of production volume by source, 2007

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Summary of selected potential investment opportunities

Source: GoR 20

Project/Company Sector Estimated investment Expected timing

Isaka Railway Infrastructure $4B Construction to start in 2014

Bugesera Airport Infrastructure $300M Construction to start in late 2010

Kigali Industrial Park (KIP) Infrastructure/Real estate $12M 2009

Convention Centre and Hotel Real estate/tourism $150M Construction to start in late 2009

ICT Park ICT/Real estate $115M TBC

Irrigation Project Agriculture $120M Construction to start in 2010

Fresh Food Market Agriculture $48M 2010

Flower Park Agriculture $21M As soon as funding is secured

Fruit Juice Concentrate Plant Agriculture $7M As soon as funding is secured

Milk Processing Plant Agriculture $7M As soon as funding is secured

Prodev Rwanda Agriculture $5M Implementation in Feb 2010

Planned Privatisations through the Capital Markets

Bralirwa Beverages 30% of the company 2009-10

BCR Banking 20% of the bank 2009-10

MTN ICT 50% of the company 2009-10

Planned Privatisations through trade sales

MATA Tea 60% of the company 2009-10

Shagasha Tea 60% of the company 2009-10

Gisakura Tea 60% of the company 2009-10

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www.rwandainvest.com

Bertha NIBATETE, Director of International Linkages and Initiatives bnibatete@rwandainvest.com ipd@rwandainvest.com +250 78875 8922

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Key contacts

Source: RDB