Investing in Rwanda An Overview November 2009 Rwanda

Investing in Rwanda – An Overview November 2009 Rwanda – land of a thousand hills, home to a thousand opportunities © Rwanda Development Board, Confidential This document does not constitute Government policy This document forms part of an oral presentation and should not be reproduced or distributed without prior permission

Reasons for investing in Rwanda Sustained high growth Access to markets 8. 8% average year-on-year GDP growth since 2004 sustained by a liberal macroeconomic policy GDP growth rate in 2008 of 11. 2%, highest among East African countries A clear vision for growth through private investment set out by President Kagame (Vision 2020) Politically stable with rule of law and zero tolerance for corruption 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 – $103 M in 2008 represents 10 x increase from 2005 Rwanda Development Board, an independent agency, created as a ‘one-stop centre’ for investors Most densely populated country in Africa with ~10 M 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 125 M people Potential opportunities for investment abound, particularly in the following sectors: Untapped investment opportunities Source: RDB 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 2 © Rwanda Development Board, Confidential – Not to be reproduced or distributed Investor friendly government and climate

A country of sustained growth and opportunity Sustained Real GDP growth 8. 8% annual growth 2000 1800 © Rwanda Development Board, Confidential – Not to be reproduced or distributed RWF (billions) Outperforming the region on Real GDP growth rate in 2008 1600 12% 1400 1200 10% 1000 8% 800 6% 400 200 4% a Af ric ia h an Source: 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 er 11. 0% ig 48% So ut Services N 5. 1% nd i 36% Bu ru 15. 0% nd a 9% ga Industry - non manufacturing Agriculture 0% U 7. 6% ia 7% da Manufacturing an ‘ 04 -’ 08 growth rate 2% nz 2008 Ta ‘ 08 Share of total 2007 ny a 2006 w 2005 R 2004 Ke 0 3

A favourable and stable macroeconomic environment Single digit inflation 5 years of stable exchange rate (RWF to 1 USD) © Rwanda Development Board, Confidential – Not to be reproduced or distributed Global food and fuel price increase caused temporary spike, now under control Government revenues growing steadily * Source: Constant exchange rate 2004 -2007 NISR, 2008 MINECOFIN Projection, BNR, RDB analysis 4

A country which is safe, secure and an easy place to live 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 World Bank Governance Indicator: Political stability (Higher is better) © Rwanda Development Board, Confidential – Not to be reproduced or distributed More stable than most emerging markets Robust governance creates long term stability Source: 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 World Bank ‘Governance Indicators’ 2007, UN, press search, RDB 5

Strong leadership has created a probusiness, near zero corruption country A President who understands business President Kagame, recognized as a ‘CEO President’ understands the need for private sector investment Advised by a team of international business leaders including Prof. Michael Porter of Harvard Business School World Bank Governance Indicator: Control of Corruption (Higher is better) © Rwanda Development Board, Confidential – Not to be reproduced or distributed A bastion of near zero corruption 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. ” Source: World Bank Governance Indicators, Rwanda ‘Vision 2020’, RDB Respected by the business community “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 6

A government committed to making it easier to do business Fastest reforming country in World Bank’s Doing Business 2010 rankings Business 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 Source: World Bank ‘Doing Business’ Rankings 2010 © Rwanda Development Board, Confidential – Not to be reproduced or distributed 2 steps in less than 3 days to register a company 7

A taxation system and infrastructure projects supporting growth in FDI Specialized infrastructure for industry and trade Simple business taxation for investors 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 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 © Rwanda Development Board, Confidential – Not to be reproduced or distributed As a result of all these factors, FDI investment growing fast Building robust capital markets Source: Stock exchange established in January 2008 with OTC transactions in bonds and equities RDB, BNR and MINECOFIN Global and Pan-African investors include Actis, Aga Khan hotels, MTN S. Africa, Starbucks, Ti. GO, Dubai World, Contour Global, Ecobank 8

The Rwanda Development Board is proof that Rwanda is open for business One stop centre for all investors Investor focused Independent and influential Built with global expertise Source: RDB © Rwanda Development Board, Confidential – Not to be reproduced or distributed 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 9

A hub for investors to access the rapidly integrating East African market A large market Population in Millions Kenya 35. 3 Tanzania 39. 7 Uganda 32. 0 Rwanda 9. 6 Burundi 7. 9 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 Rwanda: A gateway to Africa and the world Efforts to combine the East African Community, the Common Market for Eastern and Southern Africa, and the Southern Africa Development Community underway, putting 600 M people into a single market. Existing bilateral trade agreements with the US and initiatives with the European Union (EU) and others in advanced stages EAC comprised of 125 million people with a combined GDP of over USD 70 billion Source: Data from IMF World Economic Outlook 10 © Rwanda Development Board, Confidential – Not to be reproduced or distributed Country EAC: Taking real strides towards integration

Opportunities for investment Source: RDB Priority investment sectors: Infrastructure Agriculture Energy Tourism Information and Communications Technology Real estate and construction Financial services Mining © Rwanda Development Board, Confidential – Not to be reproduced or distributed 11

Sector profile: Infrastructure Rail, air, logistics investment opportunities abound to develop Rwanda as an EAC hub 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 Rail There are no railroad systems available, but a new railway line is in the pipeline: Air 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 $4 B and is currently fundraising Source: RDB © Rwanda Development Board, Confidential – Not to be reproduced or distributed The Kigali International Airport has an annual capacity of 4. 4 M 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 $300 M for Phase 1 12

Sector Profile: Agriculture World class exports but many opportunities for regional export expansion Agriculture is the bedrock of the economy Exports led by tea, coffee but many options 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 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 Source: MINECOFIN, OCIR Cafe, RDB © Rwanda Development Board, Confidential – Not to be reproduced or distributed Around 87% of the population is engaged in agricultural activities National strategy driving productivity, quality Value addition is a major opportunity 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 13

Sector profile: Energy New generation and methane gas can open access beyond Rwanda to neighbouring markets Overview 80% of energy from wood combustion and electricity coverage levels low at 6% Generation 60 -69 MW of electricity generation (50% hydroelectric, 50% diesel) today Recognising the strategic importance of the sector, the Go. R has ambitious plans to more than double generation capacity to 130 MW through methane gas, hydro (macro and micro) and 1 heavy fuel oil plant For instance, in micro-hydro, 333 potential sites identified (50 KW-1 MW) by 2008, 2 constructed, 21 under construction and 10 scheduled Power grid coverage is planned to expand to 67% of the region by 2012 through a $311 M capital budget roll-out plan Transmission and distribution networks to expand from 3, 300 km to 5, 000 km by 2012 Renewable energy Targeting 90% electricity from renewable source 5200 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 ($35 M investment in 2 years) to address 15 -20% of domestic diesel demand Source: RDB, Ministry of Finance © Rwanda Development Board, Confidential – Not to be reproduced or distributed Methane Gas 50 -55 billion m 3 of methane gas in Lake Kivu: 1 st Gas Concession and Power Purchase Agreement signed with Contour Global – 100 MW Kivu. Watt power plant under construction expected to produce 4 MW/hour for ~$324 M Further opportunities such as a 2 nd concession at Lake Kivu and conversion of gas to liquid and gas to fertilizer 14

Sector profile: Tourism sector booming, but significant opportunities remain Rwanda has unique natural assets Visitor numbers have been booming Total Leisure. Tourist Expenditure 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 Source: ORTPN, KPS, RDB 42% Transit 15% Relatives 16% Business 27% 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 15 © Rwanda Development Board, Confidential – Not to be reproduced or distributed In 2007, leisure tourists spent $209 M, making the tourism industry the country’s largest foreign exchange earner

Sector profile: ICT – Information and Communication Technology – top priority for 2020 Overview of ICT Attracted ~$500 M 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, 500 km 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: Source: Wireline telephones Vo. IP Dial-up internet, ISDN based internet, broadband internet Computer software use and development, Computer hardware, assembly, and repair RDB MTN Rwanda and Rwandatel are the dominant players , offering fixed telephones, mobile telephones, and internet services. Ti. GO, the 3 rd operator, is set to begin operation by end of ‘ 09 Between the two companies, there approximately 2 M 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 $24 M World Bank project to connect its national backbone to submarine cable: © Rwanda Development Board, Confidential – Not to be reproduced or distributed Major players in telecom There are three optic Service Providers Seacom, Teams and Eassy, at the East Coast to link various African countries to the global network. 16

Sector profile: Real estate & construction Growth creating boom in demand for commercial and residential real estate development 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 Go. R 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. From 2003 -2008, investment in the construction sector grew from $100 M to $350 M. In 2008, revenues from the general construction sector increased by 51% driven by: In Kigali alone, demand for housing is 8, 00010, 000 units per annum. The combined demand for housing countrywide is estimated to be ~25, 000 units per annum 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. Source: Rwanda imported $64. 6 M of construction materials in 2007 and $140 M in 2008 This includes 100% of steel and a majority of other construction materials RDB 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 17 © Rwanda Development Board, Confidential – Not to be reproduced or distributed

Sector profile: Financial services The banking sector remains relatively underpenetrated Overview Key players ~ $200 M of equity capital supporting ~$1 B in total assets Estimated 12% of the population had a bank account in 2007 20% sector growth rate in 5 years driven by: Go. R enforcement of banks meeting international banking standards The “Financial Sector Development Program” which increased the minimum capital requirement from $2 M to $8 M and requires banks to prove they are qualified before receiving a charter Policy, strategy and incentives in place to develop capital markets Interest rates in line with the region Lending rate % Deposit rate % 18 15 12 9 6 3 0 Rwanda Source: Kenya RDB, Ministry of Finance Tanzania 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 © Rwanda Development Board, Confidential – Not to be reproduced or distributed 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 Burundi 18

Sector profile: Mining Unexploited opportunities in ores, processing and diversification abound Mineral exports have room for growth Rwanda’s main mineral exports are ores processed to extract tin, coltan and tungsten Only 25% of ~$ 200 M potential output currently exploited A strong, investor friendly legal and policy framework being put in place 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 MINIRENA, RDB A national mining survey is being conducted to identify mineral deposits Opportunities in diversification and processing Significant opportunity to increase productivity through industrial mining Source: 19 © Rwanda Development Board, Confidential – Not to be reproduced or distributed Work is being done to develop the sector

Summary of selected potential investment opportunities Sector Estimated investment Expected timing Isaka Railway Bugesera Airport Kigali Industrial Park (KIP) Convention Centre and Hotel ICT Park Irrigation Project Fresh Food Market Flower Park Fruit Juice Concentrate Plant Milk Processing Plant Prodev Rwanda Infrastructure/Real estate/tourism ICT/Real estate Agriculture Agriculture $4 B $300 M $12 M $150 M $115 M $120 M $48 M $21 M $7 M $5 M Construction to start in 2014 Construction to start in late 2010 2009 Construction to start in late 2009 TBC Construction to start in 2010 As soon as funding is secured Implementation in Feb 2010 30% of the company 20% of the bank 50% of the company 2009 -10 60% of the company 2009 -10 © Rwanda Development Board, Confidential – Not to be reproduced or distributed Project/Company Planned Privatisations through the Capital Markets Bralirwa BCR MTN Beverages Banking ICT Planned Privatisations through trade sales MATA Tea Shagasha Tea Gisakura Tea Source: Go. R 20

Key contacts RDB www. rwandainvest. com Clare Akamanzi, Deputy CEO (Investment) cakamanzi@rwandainvest. com +250 78830 1661 © Rwanda Development Board, Confidential – Not to be reproduced or distributed Source: 21