HOMEGROWN CHAMPION INVESTMENT CORPORATION (CHIC) Eyes Rwf25billion Commercial Complex Project

HOMEGROWN CHAMPION INVESTMENT CORPORATION (CHIC)
Eyes Rwf25billion Commercial Complex Project


In the developed economies of Europe, Asia and America, part of their success stories is collective investments, called Investment Corporations. They carry different brands but the principle is the same—people with similar business mind and interest pooling financial resources to invest in sizeable investments to benefit economies of scale. Most of the top brands of today, especially Japanese origin like Phillips, Toyota, Suzuki etc are investment corporations. The logic behind their success is simple: pooling financial resources minimizes investment risks, and is a sure way of raising higher equity capital, among other benefits.

Back in 2008, the Private Sector Federation (PSF) started a programme of encouraging Rwandan business people to form Investment Groups so they can pool financial resources to invest in sizeable ventures. Rwanda Investment Group (RIG) was one of the pioneers, and has since expanded its investment empire into methane gas exploration and peat energy and cement manufacturing.

Building on RIG success, PSF went on to elaborate the programme to provinces. This saw Investment Groups initiated per province; Southern Province Investment Corporation (SPIC), Northern Province Investment Corporation (NORPIC), Eastern Province Investment Corporation (EPIC) and WESPIC for Western Province.
For Kigali Province, Champion Investment Corporation (CHIC) was also initiated. Talking to Mr. Ngabonziza Tharcisse the Board Chairman of CHIC, reveals that a group of Kigali traders already had the idea of Investment Corporation.

Mr. Ngabonziza is a renowned trader in Carte Mateous; at the heart of Kigali City specialized in importation and sale of assorted petroleum products.
He narrates, “In early 2000s, we formed an association of traders in carte Mateous called ACGEDR with an objective of advocating for the interests of members and Kigali City traders in general. As the city grew, so did the association, particularly in terms of mandate. I am privileged to be one of the founding members of ACGEDR”. 

Kigali city grows really fast. As such, ACGEDR‘s mandate gradually extended to being part of the city development. “Members agreed that besides advancing our concerns as traders, we could as well start thinking of how we can develop our businesses to cope with changing times of Kigali City,” he adds.
To this end, saw the incorporation of Kigali Investment Company (KIC) as the first born of the ACGEDR.

KIC, a joint venture of ten Carte Mateous traders owns the recently completed multimillion modern shopping complex located where used to be the former Nyarugenge market.  The storied complex will house over 300 businesses, including shops, offices and banking facilities.

Birth of CHIC
In 2008, when PSF started promoted provincial investment groups, commonly known as MINIRIGs, Champion Investment Corporation (CHIC) was formed as a complete public joint venture entity for Kigali Province (MVK) with functioning Board of Directors, chaired by Mr. Tharcisse Ngabonziza.

Basing on how KIC has been successful in developing the former Nyarugenge market into a modern shopping complex, Kigali City Council (KCC) did not hesitate in giving CHIC another expanse of land at ETO Muhima to also develop.    CHIC brings together a total of 70 shareholders with total share capital contribution of Rwf7billion.  Contemplating where CHIC would put its money first, shareholders zeroed on erecting yet another Rwf25billion complex at ETO Muhima. Mr. Ngabonziza confirms that groundbreaking of the project will be not later than February 2012.

Downtown Kigali still has patches of undeveloped land and a number of dilapidated shops. According to Kigali Master Plan, all these old structures will go and will be developed into a magnificent city with fantastic skyline, similar to those of Europe.
Mr. Ngabonziza says space in the complex will be for sale to, mostly to traders who will be relocating from old downtown shops and other startups. But priority will be given to members of CHIC. They are only 70 for now. “Government has been very supportive. We have now have the land after healthy negotiations with MVK and other public institutions”, he commends.

Although the project is rwf25billion, CHIC only has rwf7billion as equity capital. He says CHIC has a number of loan financing options on table and International Financing Corporation (IFC) the Private Sector lending arm of the World Bank would eventually be the best (option).

“This is where we need PSF’s support most because as members of CHIC we are not so exposed and knowledgeable about such international funding windows”, he confesses. Another area that CHIC will need technical assistance is when it comes to operationalization stage of these projects—they will need managerial expertise to profitably manage such huge sums of money.

In a recent interview with PSF Chairman Mr. Faustin Mbundu, he said the federation is ready to provide technical support to such operating Investment Corporations to become models of those still at very early stages.

CHIC in Mass Sugar Importation
With the biting scarcity of sugar in the region, Mr. Ngabonziza says CHIC is eyeing mass importation of sugar to supplement the insufficient local production by the only sugar factory; Kabuye Sugar Works. Working closely with PSF, we have fulfilled all the requirements the ministry of trade and industry is asking for, and the requirements by the bank to get the funds to import large quantities of sugar,” reveals the CHIC Board Chairman.  “This is the way we are looking at diversifying our financial resources to become a profit making corporation (CHIC)”, he remarks. 

By and large, Rwanda’s private sector is dominated by Small Micro and Medium Enterprises (SMMEs), majority of which struggle to survive. There are a few large companies, in the comfort zone…some enjoying total monopoly. As the country vies for Foreign Direct Investments (FDIs) to grow the economy, homegrown investment initiatives like RIG, CHIC should also be given attention and priority they deserve-both in terms of incentives and facilitation.

  • Posted 13th March 2012

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