DAR ES SALAAM: NMB Bank has raised a record of 400bn/- from the sale of its dual-tranche Jamii Bond, which was on Tuesday listed on the Dar es Salaam Stock Exchange (DSE) for trading.
The funds will be principally used to finance eligible climate, social and environment-focused projects that positively impact resilience against climate change, achieve sustainable infrastructure and promote efficient and sustainable use of natural resources.
The bank’s initiative is supporting President Samia Suluhu Hassan’s efforts to attract social and environmental investments into the country as a way to help climate change mitigation.
Addressing the Conference of the Parties (COP 28) in Dubai, United Arab Emirates (UAE) recently, President Samia called on the global community to ignite financing for climate adaptation by ensuring funds are accessible and predictable, with transparency for the developing countries that face the most burdens.
Dr Samia said that Tanzania is advocating for clean cooking energy and requested world leaders to support the cause through financing.
Gracing the NMB Jamii Bond listing on DSE and the release of its initial offering results, the Minister of State in the President’s Office, (Planning and Investment) Professor Kitila Mkumbo said the bank’s initiative supports national building efforts by advancing the financial inclusion agenda and attracting quality investments.
Prof Mkumbo said such initiatives are also helping the government to formalise businesses and integrate ordinary people into the mainstream economy.
“The success of this bond could not have been possible without the supportive business and investment environment the government has been creating for the development of capital markets and the whole financial sector in the country,” he noted.
“Products like NMB Jamii Bond are not only empowering people and enabling them to participate in the formal economy but also playing a foreign direct investment role and improving the supply of dollars in the economy,” he said.
Prof Mkumbo challenged banks and other entities to craft special bonds for promoting general industrial enterprises in the country.
NMB’s Chief Executive Officer Ruth Zaipuna said the three-year sustainability bond attained phenomenal success by attracting strong demands from local retail investors and offshore impact financiers.
“The collective amount received from NMB Jamii Bond is more than three times the amount that was earlier approved by the Capital Markets and Securities Authorities (CMSA),” she stated.
Whilst its TZS tranche marked a 284 per cent subscription level, mobilising 212.9bn/- against the targeted 75bn/-, the subscription of the USD tranche was 730 per cent fetched 73 million US dollars from the initial target of 10 million US dollars.
The lender floated NMB Jasiri Bond for a month from September 25 this year to mobilise funds for financing social and green projects with shoe options of up to 25bn/- and 5 million US dollars for the two tranches respectively.
Ms Zaipuna said that upon receiving approval from CMSA to further increase the green shoe options, the lender accepted all the received applications of which 99 per cent were through the bank’s 231 branch network.
Apart from showing the vibrancy of the local capital markets,the oversubscription of the first tranche of the bank’s 1tri/- Medium-Term Note (MTN) also proves the growing support for sustainable finance in the country.
“The net proceeds of the Jamii Bond will be used to finance activities that align to the bank’s updated Sustainability Financing Framework,” Ms Zaipuna noted.
Speaking at the event, CMSA’s Chief Executive Officer Mr Nicodemus Mkama said that the bond increases the value of corporate bonds in the capital markets by over 121 per cent from 325bn/- to 721.3bn/-.
He said the results of the bond depict that retail investors accounted for 53.8 per cent of the sale, while foreign investors absorbed 42.6 per cent of it.
“Tanzania’s capital markets are safe, sustainable and attractive to meet the demands of local and foreign investors. This huge response is also a result of investment education offered to the public and stakeholders of the capital markets over the available opportunities and benefits,” Mr Mkama stated.
He further attributed the success to an enabling environment put in place by the government under President Samia Suluhu Hassan.
The DSE acting Chief Executive Officer, Ms Mary Mniwasa, said the NMB Jamii Bond is the 28th corporate bond from 15 entities to have been listed on the bourse since 1999.
She added that it is the third sustainability security to be listed locally signifying not only the growing appetite for green financing but also the country’s commitment to sustainable development.