CRDB Bank’s Samia Infrastructure Bond, issued under its medium-term note programme, is a transformative initiative aimed at financing critical road infrastructure projects in Tanzania.
This bond is designed to address persistent funding challenges faced by projects under the Tanzania Rural and Urban Roads Agency (TARURA), with a focus on ensuring the timely completion of construction and rehabilitation efforts across the country. By leveraging capital markets, the bond underscores the pivotal role of financial innovation in supporting the country’s national development objectives.
Launched on November 29, 2024, and expected to be listed on February 10, 2025, the bond has a principal value of 150bn/-. It features a fixed interest rate of 12 per cent per annum, with quarterly coupon payments scheduled for February, May, August and November.
The bond is set to mature in February 2030, offering investors a medium-term investment horizon. An additional draw for investors is the tax-exempt status of interest earnings, enhancing its appeal to both retail and institutional participants. Furthermore, the minimum investment denomination of 500,000/- promotes accessibility, aligning with CRDB’s efforts to support financial inclusion and democratise investment opportunities.
The proceeds from the Samia Infrastructure Bond are allocated to address liquidity challenges faced by contractors engaged in TARURA projects. This immediate access to funding reduces delays often caused by budgetary cycles, ensuring efficient and timely project execution.
These efforts align seamlessly with Tanzania’s Vision 2025, which prioritises enhanced connectivity and economic empowerment in underserved areas. Improved road infrastructure not only facilitates trade and mobility but also boosts access to essential services, fostering inclusive socio-economic growth.
The Samia Infrastructure Bond shares notable similarities with the earlier Tanga Urban Water and Sanitation Authority (Tanga UWASA) bond, which successfully mobilised over 53bn/- in private capital. The proceeds from the Tanga UWASA bond were strategically directed toward projects that enhanced water and wastewater management while simultaneously supporting renewable energy, energy efficiency and climate change adaptation initiatives.
As a pioneering financial instrument, the Tanga UWASA bond set a benchmark for sustainable development within the water sector, demonstrating how targeted investments can address pressing infrastructure needs while aligning with broader environmental and social objectives.
Both bonds exemplify the transformative potential of innovative financing mechanisms in bridging infrastructure deficits while delivering measurable public benefits. However, their focal areas differ, highlighting the versatility of capital markets in addressing diverse developmental priorities.
While the Tanga UWASA bond concentrated on improving water systems, the Samia Infrastructure Bond is dedicated to advancing road networks, emphasising the vital role of transportation infrastructure in fostering economic growth and connectivity. Together, these bonds illustrate the power of financial innovation in driving inclusive and sustainable development across various sectors.
This bond also builds on CRDB’s track record in sustainability and development financing, following the 429.55per cent subscription of its Kijani Bond, which supported environmentally friendly projects. By addressing the critical need for reliable road infrastructure, the Samia Infrastructure Bond furthers CRDB’s commitment to driving sustainable economic growth.
ALSO READ: Why subnational water infrastructure green bond crucial
The focus on supporting contractors ensures smoother project implementation, ultimately benefiting the broader economy by facilitating trade, reducing transportation costs and improving access to markets.
By offering competitive returns, tax incentives and a tangible developmental impact, the Samia Infrastructure Bond sets a high benchmark for future infrastructure financing initiatives in Tanzania. It is not just a tool for raising capital but also a catalyst for economic transformation, enhancing investor confidence in the role of financial markets in achieving sustainable development goals.
The successful implementation of this bond will enhance Tanzania’s road network and showcase how strategic financial products can align with national priorities, driving long-term progress and prosperity.
