Rwanda launches US$100M dairy project to boost rural incomes, climate resilience

RWANDA – Rwanda has embarked on a six-year, US$100.37 million dairy development project aimed at bolstering the income of rural households and fortifying the dairy sector against climate change.

Launched on the foundations of the previous successful Rwanda Dairy Development Project (RDDP), the new initiative addresses lingering challenges hindering the sector’s viability and sustainability.

The RDDP-2, slated for implementation from 2024 to 2029, targets 27 districts, including 14 from the original RDDP and 13 new districts.

The project aims to benefit approximately 175,000 rural households, corresponding to 700,000 direct beneficiaries, with a focus on enhancing the income, nutrition, and resilience of these communities.

The challenges identified in the RDDP Phase 2 Project Design Report by the International Fund for Agricultural Development (IFAD) include sub-optimal milk productivity, limited access to quality forage and water, low producer capacity, poor market information and infrastructure, and inadequate investment across the value chain.

Parliament approved the financing agreement between Rwanda and IFAD, totaling €18.9 million as the first batch of funding. The Minister of Finance and Economic Planning, Uzziel Ndagijimana, emphasized the project’s contribution to advancing Rwanda’s dairy sector.

“To address climate change and variability issues affecting feed and water availability for cattle, RDDP-2 will introduce climate-resilient fodder varieties and technologies, promote agroforestry systems, and deploy energy-efficient and greenhouse gas reduction technologies.”

The project also aims to “green” the dairy value chain, aligning with national and global commitments to carbon neutrality.

In addition, the objectives of RDDP-2 include an 80% increase in incomes for 80% of dairy households, the creation of 3,400 new jobs, and adoption of environmentally sustainable practices by 53% of beneficiaries.

The project plans to construct or rehabilitate 164 milk storage/processing facilities, equip 95 milk collection centers with digitalized transaction systems, and support 85,000 people in dairy entrepreneurship through improved access to finance.

The funding structure involves contributions from IFAD, OPEC Fund, Green Climate Fund, Equity Bank Rwanda, Heifer International, the Government of Rwanda, and beneficiary contributions.

The project’s total costs will be disbursed over six years across three components: increasing productivity and resilience, improving value chain efficiency, and policy support.

Meanwhile, as Rwanda aims to build a dairy sector resilient to climate change, RDDP-2 represents a significant step forward.

“With its comprehensive approach, the project seeks not only to boost the dairy industry but also to uplift rural livelihoods and contribute to Rwanda’s commitment to a sustainable, climate-resilient future.”

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