- This project is expected to improve and increase water supply from 96 per cent to 100 per cent in Tanga City.
- The government of Tanzania adopted the Alternative Project Financing (APF) strategy in 2021
- Mark Napier, CEO of FSD Africa, commended the collaborative effort behind the Tanga UWASA Green Bond.
The first ever Sub-national Water Infrastructure Green Bond in East Africa, worth $20.8 million, has been issued by Tanga Urban Water Supply and Sanitation Authority (Tanga UWASA), an autonomous water utility.
This landmark transaction would fund the expansion and improvement of sustainable water supply infrastructure and environmental conservation within Tanga City and nearby townships. The 10-year project revenue bond listed at the Dar es Salaam Stock Exchange (DSE) offers an attractive interest rate of 13.5 per cent per annum to be paid semiannually.
The government of Tanzania adopted the Alternative Project Financing (APF) strategy in 2021 because of the need to broaden its domestic revenue base to finance various national development initiatives, including water, energy, health care, agriculture, and other productive infrastructure projects.
The Tanga bond is the first significant transaction demonstrating that municipalities, cities, and sub-national entities can use the existing regulations and frameworks to raise substantial capital from domestic capital markets in local currency to finance development.
Jumaa Aweso, the Minister for Water, emphasized the government’s mandate to improve water accessibility, particularly in urban and rural areas. He stressed the importance of deploying innovative financing mechanisms, similar to the Tanga UWASA initiative, to achieve ambitious water supply targets by December 2025.
” This project is expected to improve and increase water supply from 96 per cent to 100 per cent in Tanga City and reliability of water for 24 hours, by June 2025. Similarly, increase water supply network from 70Per cent to more than 95Per cent in the townships of Muheza and Pangani respectively by June 2025,” said Aweso.
Government officials, including Philip Mpango, Vice President of the United Republic of Tanzania, emphasized the importance of strategic revenue-generating projects like the Tanga Bond in alleviating pressure on the government budget. They underscored the significance of redirecting resources towards priority social initiatives that cannot be adequately financed through commercial means alone.
“Am directing the Treasury Registrar’s Office which supervises public institutions and the Minister of State, President Office, Regional Administration and Local Government (PORALG), to explore eligible public institutions, Local Governments, cities and municipalities to prepare to tap long term finance via revenue and municipal bond issuance,” said Mpango.
Mark Napier, CEO of FSD Africa, commended the collaborative effort behind the Tanga UWASA Green Bond, emphasizing its role in driving sustainable development across East Africa. Napier highlighted the transformative impact of strategic partnerships in reshaping the region’s financial landscape and fostering inclusive growth.
First Water Infrastructure Green Bond
“We are excited to witness the successful launch of the Tanga UWASA Water Green Bond, a testament to the power of innovative financing in driving sustainable development in East Africa. This milestone achievement not only underscores FSD Africa’s commitment to making finance work for Africa but also highlights the immense potential of collaborative efforts in transforming the region’s financial landscape,” said Napier.
“The Tanga UWASA Green Bond represents a significant step towards inclusive growth, and we are proud to have played a role in facilitating this historic initiative. It reinforces our belief in the transformative impact of strategic partnerships and underscores our unwavering commitment to driving positive change for communities across the continent,” he added.
Deputy Minister of Finance, Hon. Hamad Chande, highlighted that the Government of Tanzania is committed to ensuring that more public entities use its Alternative Project Financing strategy to finance local development instead of relying only on government grants, a leaf to be borrowed from the Private Sector and Corporates who operates in the same market.
Other stakeholders involved in preparations of the Tanga water green bond include NBC Bank (lead transaction advisor), FSD Africa (supported green framework), FIMCO and Global Sovereign Advisory (financial & investment advisory), ALN Tanzania (legal advisor), Innovex (reporting accountant), Vertex International Securities (stockbroker) and ISS Corporate Solutions (second-party opinion provider).
The general public, investors, Institutions, and individuals are welcome to visit any NBC Bank branches or any other authorized brokers to invest in the Tanga water green bond within the offer period of 6 weeks.
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