Why subnational water infrastructure green bond crucial

TANGA: VICE-PRESIDENT Dr Philip Mpango yesterday launched the first ever subnational water infrastructure green bond worth 53bn/-, for boosting water accessibility and sanitation in Tanga Region.

Speaking during the launching ceremony, Dr Mpango said the 10-year Tanga Water Green Bond was an innovative financing approach for implementing water projects that would reduce over reliance on funding from the central government.

“This is the way to go as financial resources from loans become scarce and loans come with high interest rates,” he said, adding; “Raising funds through green bonds is suitable because it enables obtaining long-term loans and the desired amount of funds at once.” He said capital intensive projects such as water supply require a diversified source of funds.

Dr Mpango demanded other Local Government Authorities (LGAs) to borrow a leaf from the Tanga Water Green Bond approach in order to fast track execution of water projects and improve social services to the people Detailing the benefit of the water project in the region, he said after an expansion and renovation of water infrastructures, the Tanga’s Urban Water Supply and Sanitation Authority (UWASA) water production capacity will increase considerably to 60 million litres from the current 42 million litres. More significantly, he said upon effective implementation of the water projects by June next year, water availability in the Tanga City will reach 100 per cent from 96 per cent being tapped today.

He added that clean water availability is expected to reach 95 per cent from 70 per cent available today at Muheza and Pangani townships. Dr Mpango said the water project under TangaUWASA will benefit about 458,000 people residing in Tanga City, Muheza and Pangani while serving another 74,000 people in Mkinga District.

The VP announced that the Tanga Region’s transition to green bonds was approved by President Samia Suluhu Hassan after a productive discussion with the United Nations Capital Development Fund (UNCDF) delegation on October 25, 2021.

During the talks held at the State House in Dar es Salaam, Dr Samia underscored the need for LGAs and government entities to use the bond as alternative source for their projects financing.

He said as the result of the discussion, the National Municipal and Subnational Stakeholders Task Force and the National Facilitation Team were established as main bodies for monitoring progress of the new innovative financing strategy.

In another development, the Dr Mpango commended the UNCDF, TangaUWASA and the Ministry of Water for good collaboration, which led to the realisation for the Tanga Water Green Bond. He directed Tanga UWASA to ensure the funds which will be raised from the bond are diligently utilised to improve clean water and sanitation services access and collect revenue for timely repayment.

The VP ordered the Capital Market and Securities Authority (CMSA) in collaboration with the Ministry of Planning and Investment to develop an early warning system which will be identifying any threat that impedes functioning of the green bond.