On July 8, 2011, MIGA issued guarantees totaling $14.8 million covering an equity investment in, and shareholder loans to, Bahkresa Grain Milling (Rwanda) Limited. The coverage is for a period of 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The individual investors: Said Salim Awadh Bakhresa, Mohamed Said Salim Bakhresa, and Abubakar Said Salim Bakhresa are from Tanzania. The investors are the shareholders of Said Salim Bakhresa & Co Ltd and other Bakhresa Group companies, based in East and Southeast Africa. The Bakhresa Group companies primarily operate in the agribusiness, food, and beverages sector.
Bakhresa Rwanda was incorporated in January 2009 to expand the Bakhresa Group’s grain-milling business in Rwanda and its export potential to neighboring countries such as Burundi and the Democratic Republic of Congo. In June 2011, Bakhresa Rwanda set up the grain-milling factory in the Kigali Industrial Park located at Bumbogo. The mill, with a total milling capacity of 250 tons per day, is now operational.
Rwanda is currently dependent on two milling companies and imports from neighboring countries for its supply of wheat flour. The current consumption of 120,000 tons per annum is projected to grow annually by about 5 percent because of urbanization and population growth. While the project will initially largely use imported grain for milling, building capacity in the food-processing sector can also help spur the domestic production of grain. With an estimated 52 percent of households food insecure or vulnerable, an increase in grain-milling capacity can contribute to improved supply—possibly easing pressure on food prices, which is a key concern identified in the World Bank’s Country Assistance Strategy. The project will also create jobs and contribute to the government’s revenues through increased corporate taxes.
The project is aligned with MIGA’s strategic priorities of supporting South-South investments and investments into countries eligible for concessional lending from the International Development Association. The International Finance Corporation (IFC) is also supporting the investment through IFC A-Loans.