Basket financing for inclusive poverty-oriented infrastructure

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The aim of the FC module is to improve the rural poor's access to public utilities and their use in selected districts. The basket financing builds on the progress made in the past with FC in local economic development (LED) and the existing systems and regulations. It ensures their application and further develops the framework conditions for LED and infrastructure projects as required. Existing potential for citizen participation is better leveraged and expanded by strengthening the role of civil society. The module thus pursues a systemic and transformative approach that supports Rwanda's political and strategic goals for local economic development. The approach consists of measures in three integrated and complementary pillars. At the overarching strategic level, existing challenges for LED projects are analyzed and improvements to the framework conditions and operational processes are proposed and implemented (pillar I). At the local level, the basket finances poverty-oriented infrastructure projects in rural poor districts that are implemented by the district administrations using existing systems and guidelines (pillar II). A consultant will also provide support for setting up the basket and strengthening capacity at local level (pillar III). We estimate the initial cost of equipping the basket for the first three years to be EUR 32 million, which will be financed from FC funds of EUR 16 million (grants) and funds from the Agence Française de Développement (AFD) of EUR 16 million (loans).