KIGALI, May 28 (Reuters) - International efforts to end crippling debt in Africa may be hampering growth on the world's poorest continent, due to the conditions imposed on access to funds, Rwanda's president said on Monday.

Rwanda and 13 countries in sub-Saharan Africa categorised as Highly Indebted Poor Countries (HIPC) benefited from a 2005 debt cancellation initiative by rich nations, designed to help end poverty and disease in Africa.

"While debt cancellation has brought significant relief, it is evident that it has created some challenges as well, due to conditionalities attached to it," President Paul Kagame said.

The debt relief agreement was approved by finance ministers of the Group of Eight in 2005. But countries under HIPC initiative have to seek grants and highly concessional financing instead of loans to fund public investments, Kagame said.

"Debt cancellation is a very welcome deed, but it certainly does not provide solutions to the challenges of development financing in HIPC countries," Kagame told a meeting of international investors in the Rwandan capital Kigali.

Those countries under the HIPC initiative "are likely to be locked in a low growth-low debt scenario," unless other long-term and predictable resources are available, he added.

Seeking to revolutionise its economy after the trauma of genocide in 1994, the tiny central African nation has identified areas in energy, agriculture, tourism, mining, ICT, manufacturing and financial sectors as key for investment.

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