UTT facilitates funding for Ushirika Towers

UTT facilitates funding for Ushirika Towers

UTT arranged the funding through a zero-coupon bond with maturity of 10 years at an interest rate of 30 per cent.  The bond, unlike its peers does not make periodic payments until the maturity date, when the holder gets principal amount plus interest.  

The UTT, the project finance manager for Tanzania Federation of Cooperatives (TFC), sold for the first time the zero-coupon corporate bond in the market to Exim Bank, NIC bank and itself. UTT's Chief Executive Officer Dr Hamis Kibola said the bond raised  enough funds to warrant the construction of 20-storey structure and renovating the existing 12-floor building.

"They (TFC) approached us seeking financial help and we designed the zero-coupon bond and we sold the idea to other financial intermediation," Dr Kibola told the 'Daily News'. The CEO added: "We are happy the deal paid off, as the lender will have no problem on paying interest rate which is due after 10 years when the bond matures."

The bond tenure is ten years which is enough period for the TFC to start receiving revenue from rent of the offices, restaurants, parkings, shops spaces and other related activities. According to the TFC Chairman, Mr Hassan Wakasuvi, the project will be under the supervision of UTT until the last debt is paid to the financiers. Exim invested 12bn/-, UTT 10bn/- and NIC 3bn/-.

"The building will be ready to receive tenants later this year ...the loan will be paid from revenue to be raised through rent," Mr Wakasuvi told the invitees during the soft laying of the foundation stone by President Jakaya Kikwete on Tuesday.

The China Civil Engeering Construction Corporation (CCECC), Project Manager, Mr Ke Changliang, said they have completed the hardest part of laying the foundation and basement which is 20 per cent of the construction period.

"Constructing 20 floors will be completed at the end of this year and finishing will commence early next year," Mr Ke told the 'Daily News', "actually we are ahead of the deadline."  The project manager said each floor will have 800 square metres of office space, shops and restaurants plus 2400 square metres for car parking, enough for over 70 cars per floor.

The CCECC established its office in Tanzania in  1981, five years after it completed construction of Tanzania and Zambia Railway (TAZARA) in 1976 and made it its headquarters. The Cons Africa's Architect, Mr Henry Mwoleka, said the challenge on designing the state-of-the-art building was to blend the CBD features and emerging Kariakoo trading rhythms, while adhering to city master plan.

"Due to power problems and high bills, solar energy will be used for security lights, especially at the parking lot," Mr Mwoleka said. "We have considered using wind to save extensive use of electricity for air conditioning." The Architect said the building also was designed to withstand earthquake shocks as Dar es Salaam seats at a moderate seismic region.

The 12-floor old structure of Ushirika Building was inaugurated in 1966 by the first president of Tanzania and the Father of Nation, Julius Nyerere.  Its construction took two years.

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