By Ian Walker

LONDON--Bob Diamond's Atlas Mara Co-Nvest Ltd. (ATMA.LN) said Friday it has agreed to buy the government of Rwanda's 77% shareholding in the commercial arm of the Development Bank of Rwanda for an undisclosed sum.

Atlas Mara, an investment vehicle that the former Barclays chief executive co-founded late last year to buy up African banking assets, last month signed a memorandum of understanding with the Rwandan government to develop BRD, the commercial arm of the Development Bank of Rwanda.

BRD provides long-term financing to the private sector and offers a range of products including loans, leasing, mortgage financing and trade finance.

Mr. Diamond formed Atlas Mara in partnership with Ashish Thakkar and floated it on the London Stock Exchange in December raising $325 million. Its shares are currently suspended under AIM rules as it is currently in reverse takeover talks with African bank ABC Holdings Ltd. and ADC African Development Corporation AG for up to $265 million.

Mr. Diamond resigned as chief executive of Barclays PLC in July 2012 after the bank paid U.S. and U.K. regulators $455 million to settle allegations that it had manipulated Libor, the London interbank offered rate.

Write to Ian Walker at ian.walker@wsj.com

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