CRDB, UBA promise to provide funding for Stiegler’s Gorge

16Apr 2019
The Guardian Reporter
DAR ES SALAAM
The Guardian
CRDB, UBA promise to provide funding for Stiegler’s Gorge

TWO leading commercial banks have promised to provide funding for the construction of the 6.6trn/- Rufiji Hydro-electric Power Project if need arises in future.

United Bank for Africa (Tanzania) Limited acting Chairman Ambassador (L), Tuvako Manongi hands over a bank guarantee to Tanesco Managing Director, Dr Tito Mwinuka at a ceremony held in Dar es Salaam yesterday. Others in the photo are UBA Managing Director, Usman Imam (R) and Egyptian Ambassador to Tanzania (2nd L), Mohamed Yasser el Shawaf. Photo: courtesy of UBA Tanzania.

CRDB bank Plc’s Managing Director, Abdulmajid Nsekela and his United Bank for Africa peer, Usman Imam said in Dar es Salaam yesterday during a ceremony to sign a U$ 737.5 million (over 1.7trn/-) bank guarantee to Tanesco for the implementation of the RHPP, that the two bank have capacity and are ready to bankroll the mega project.

“Today is a special occasion for our country because this is a special event because we are marking an important step towards implementation of this mega project,” said Nsekela whose bank provided 51 percent of the guarantee with UBA providing the balance.

Nsekela pointed out that when approached to provide the guarantee for the 2,100 megawatts hydro-electric power project, the two banks accepted because they support the government’s industrialization agenda.

“In addition to this guarantee, our banks are also able to provide funding for the project if need arises in future,” the CRDB chief assured while pointing out that Stiegler’s Gorge power supply will not only provide the country with cheap electricity needed for rapid industrialization but also reliable power supply.

“Tanzanians have waited for a long time for this project to take off but now finally, the waiting is over,” said Nsekela while commending Bank of Tanzania and Ministry of Energy for ensuring that the project finally takes off.

Speaking at the same ceremony, UBA’s Imam said that as per the terms of the contract, the Arab Contractors joint venture led by El Sewedy Electric is required to provide foreign and local bank guarantees for the mega project in the form of performance guarantee and advance payment.

He revealed that in the first of its size, landmark financial deal, the two banks have partnered with Africa Export-Import Bank (Afreximbank) and other Egyptian banks to provide bank guarantees to state owned Tanesco with the foreign portion.

“The government of Tanzania has been considering establishing this power station since the 1960s which when fully developed, will be the largest hydro power station in Tanzania and East Africa,” Imam noted.

“CRDB and UBA as the co-arranger of the facility for this project commend the boldness and strategic focus of the Fifth Phase Government of President John Pombe Magufuli on this initiative to drive its industrialization agenda and raise the Tanzania economy and its citizens to a medium income countries status,” the UBA MD added.

In December last year, the government awarded the construction contract for the RHPP to Arab Contractors Limited at a budgeted cost of U$2.9 billion (6.6trn/-). In February this year, the consortium of Arab Contractors led El Sewedy Electric were given the construction site with an agreed six months to mobilize equipment and start actual construction this year.