Tanga UWASA’s Water Green Bond oversubscribed, officially listed on DSE

Tanga UWASA’s Water Infrastructure Green Bond, the first ever Sub-national bond to be issued in East Africa, has been oversubscribed by 103%. The green bond, worth TZS 53.12 billion, and launched on 22nd February 2024, was successfully listed at the Dar es Salaam Stock Exchange (DSE) on 15th May 2024. It performed impressively with 65% of collection being from local investors while attracting 35% of foreign investors. This is a clear indication of the growing interest in sustainable investment and confidence of international investors to the Tanzania market.

The Tanga UWASA bond will now be traded at the DSE, and funds raised will propel sustainable water supply infrastructure and environmental conservation efforts in Tanga. Listing of the Tanga UWASA bond signifies a successful demonstration that the existing regulations and frameworks can be used by municipalities, cities, and sub-national entities to raise significant capital from domestic markets, in local currency to finance development, and in turn reduce pressure on Government budget.

On his address, the guest of honor, Hon. Dr. Mwigulu L. Nchemba, Minister of Finance, said

this event and similar events by Corporates in the recent past, is a clear testimony that the Alternative Project Financing Strategy (APF) launched by the Government in May 2021 is doable not only to corporates, but also to Government institutions. And considering that the fully amount required for project implementation is now available, the Ministry of Finance will keep on following up to ensure that this project is successfully implemented as planned.

Hon. Jumaa Aweso, the Minister for Water highlighted that,

financing needs for water infrastructure across the nation is still very high. Competing government priorities, and limited budget, results in delay of projects implementation. Bond issuance such as this one, complements government efforts and expedite provision of water services to the citizens. I urge other water utilities to learn from the Tanga UWASA bond and commence replication in their localities”.

On his key remarks, the Head of United Nations Capital Development Fund (UNCDF) in Tanzania Mr. Peter Malika congratulated the government for achieving this historic milestone. He added

“In collaboration with the government, our significance and support as a development finance institution has resulted in clearing and clarifying technical and policy hurdles that existed before this transaction, so that future transactions can use Tanga UWASA’s bond as a national template, fit for replication and taking to scale to other sectors such as energy, agriculture, health, education, income generation and productive sectors. I want to recognize the National Municipal Bond Taskforce, with this team we have built and entrenched a lasting crosscutting national capacities that ought to be emulated as a winning formula in other initiatives”.

From the regulator perspective, Mr. Nicodemus Mkama, Chief Executive of the Tanzania Capital Market and Securities Authority (CMSA) highlighted that,

Successful issuance and listing of Tanga Water Bond on the Dar Es Salaam Stock Exchange, solidifies the position of Tanzanian capital markets on the map of global capital markets that offer innovative and sustainable financing products attracting both domestic and international investors. He further urged other subnational institutions and municipalities to emulate the path taken by Tanga UWASA, in financing revenue-generating projects through capital markets.

In addition, “The listing of the TANGA UWASA bond demonstrates the power of collaboration between the public and private sectors, as well as the commitment of stakeholders to make investments that generate financial returns and positive impacts on society and the environment. Therefore, DSE invites public institutions, companies, and the private sector to continue this path of raising capital aimed at promoting and building a competitive economy for the development of peoplesaid Ms. Mary Mniwasa, the Chief Executive Officer of DSE.

On his side, the Managing Director of Tanga UWASA, Eng. Geofrey Hilly, expressed immense pride and honor in witnessing the successful listing of the Tanga Water Bond. He emphasised its significance in advancing sustainable water infrastructure and environmental conservation, extending gratitude to investors, partners, and stakeholders for their unwavering support and trust. He assured the investors,

as the pilot, we are determined to maintain a strong and unwavering commitment to our investors and the government, on professionalism, proper use of funds, honoring our obligations, and delivering quality water services to our customers”.

Other stakeholders involved in preparations of the Tanga water green bond includes 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).