- Resource mobilisation for Stiegler’s project
CRDB Bank and United Bank for Africa (UBA) have co-arranged the largest bank guarantee financial syndication of 1.7tri/- for contractors of the Rufiji Hydroelectric Project.
The banks’ syndication presents 10 per cent of the project’s local component of 30 per cent of the total required fund of 6.6tri/-. The joint venture of Arab contractors and Elsewedy Electric are executing the hydropower plant at Stiegler’s Gorge.
CRDB Group Managing Director Abdulmajid Nsekela said in Dar es Salaam yesterday that the two banks facilitated the historic syndication to enable the country to produce energy at affordable costs in support of the industrialisation drive.
“We [CRDB and UBA] are showing our readiness in providing financial support to the larger economic projects…this loan syndication shows our readiness,” Mr Nsekela said before handing over the guarantee to Tanzania Electric Supply Company (TANESCO)— the project owner.
He thanked the Bank of Tanzania (BoT) and ministries of finance and energy for their full support towards facilitation of the syndicated bank facility.
BoT Deputy Governor, Financial Stability and Deeping,Dr Bernard Kibesse described the facility as important to the nation, arguing that without cheap and reliable power, the envisaged semi-industrial economy by 2025 will hardly be achieved.
“This is the counter guarantee to secure foreign lenders to provide the required protection to TANESCO and the contractors,” Dr Kibesse said. UBA Tanzania Managing Director and CEO Usman Imam Isiaka said under the syndication, the foreign component carries 70 per cent and the local part is 30 per cent, equivalent to 1.7tri/-.
The foreign component is backed by foreign lenders and the domestic banks are handling the local part. “This is the biggest syndication in Africa, involving huge amount of money…the biggest so far to be executed by lenders within the continent,” Mr Isiaka said of the syndication for the project whose cost is 2.95 billion US dollars (about 6.6tri/-).
The Ministry of Energy Permanent Secretary Hamis Mwinyimvua said the guarantee, which is a contractual agreement, is geared towards speeding up construction of the biggest dam in East Africa.
“The guarantee safeguards the construction agreement to avert delays…the advance payment will be made soon,” said Mr Mwinyimvua, adding that the project execution period is 42 months, including six months for site mobilisation.
Elsewedy Electric Head of Human Resources Gabriel Mwita said site mobilisation is scheduled for completion by mid next month and thereafter comes the actual construction.
“We are finalising deployment of construction equipment and mobilisation of human and financial resources… this will end by mid-May,” he said.
The human resource professional said the project will employ between 6,000 and 8,000 Tanzanians but will start with 1,000 people next month and increase the number progressively.
CRDB and UBA have partnered with Africa Export- Import Bank (Afriexim) and other Egyptian lenders to provide the bank guarantee to TANESCO.
Upon completion, the project will generate 2,100 megawatts and help to reduce the country’s power shortage by doubling production capacity.
The Stiegler’s Gorge produced electricity will be transported through the new 400kV power lines to the Dar es Salaam-based national grid.
The mega power project is highly important for the country, which strives to diversify the energy mix and reduce power charges to attract more industrial investments.