The agreement was signed in Rome by H. E. Jacques Kabale Nyangezi, Ambassador and Permanent Representative of the Republic of Rwanda to IFAD, and Kanayo F. Nwanze, President of IFAD. The Rwanda Dairy Development project will cover 12 districts and involve an investment of US$65.1 million, which includes a $43.6 million IFAD loan, a $1.1 million IFAD grant, a $4 million grant from Heifer International and contributions from the Government of Rwanda, the private sector and project beneficiaries.

Current annual milk production in Rwanda is valued at approximately $162.4 million. Over the past decade, the government has made significant investments in the industry, with the dairy subsector being the largest and fastest-growing segment of the livestock sector in the country, accounting for 10.5 per cent of agricultural GDP.

Despite the progress made in developing the dairy sector, there are still significant challenges such as limited support services (such as artificial insemination, veterinary services, extension and inputs), inadequate farmers knowledge of dairy cattle management, their limited ability to organize and market milk collectively, low milk productivity, and limited access to finance.

In Rwanda, the dairy subsector is crucial for rural development, poverty reduction, and food and nutrition security, said Nwanze. It offers a pathway out of poverty for the large number small dairy producers and service providers throughout the supply chain.

The new project will improve milk quantity and quality, farmers processing capacity through promotion of climate smart technologies and practices, and support the development of dairy cooperatives to benefit from market driven production, processing and trading of dairy products improved. It will also help strengthen an inclusive policy and institutional framework for the sector.

Since 1981, IFAD has financed 16 rural development programmes and projects in Rwanda, for a total amount of $283.8 million and directly benefiting about 634,300 rural households.