BY FAVOUR AGBI

The Government of Tanzania has secured a $250-million seven-year loan facility from a consortium of local and global financiers led by Stanbic Bank Tanzania and its parent bank, Standard Bank Group, to fund development projects such as road and rural electrification.

The deal is a first of its kind for a sovereign government involving local and international commercial banks as well underwriting by multilateral financial institutions and commercial insurers.

The loan also signals that African governments are serious about commercial banks as alternative sources for much-needed capital.

The signing ceremony for the loan facility was held in Dar-es-Salaam today.

Speaking on behalf of the United Republic of Tanzania, Minister for Finance Mustafa Mkulo said that the Tanzanian government chose to raise the funding from the loan market as a first step in its diversification of funding sources for its long term needs.

This transaction arranged by Stanbic Bank Tanzania is a testament of how a good partnership between the government and the private sector can benefit the nation. With this loan we aim to invest in infrastructure development especially in the areas of power and roads,” continued the Minister.

Helmut Engelbrecht, Standard Bank’s Head of Investment Banking in Africa says the deal is syndicated in three ways which collectively amount to $250-million. Standard Bank acted as the global coordinator of the components of the funding.

Says Mr Engelbrecht: “Standard Bank was able to mobilise several private and public sector institutions to raise this amount of credit for the Tanzanian government. This is a feat that few banks can achieve.

Standard Bank was able to source, originate and sign up the deal because of our geographic footprint, established in-country presence and localised experience, and our relationships with the government and multilateral institutions.