Govt inks 3trn/-loan accord for remainder of SGR railway

14Feb 2020
Francis Kajubi
Dar es Salaam
The Guardian
Govt inks 3trn/-loan accord for remainder of SGR railway

​​​​​​​THE government yesterday signed a USD1.46 billion (3.3trn/-) loan agreement with Standard Chartered Bank for the construction of 422 kilometers Morogoro-Makutupora section of the Standard Gauge Railway (SGR) project.

The amount is a concessional loan from 17 development financial institutions (DFIs) and bankers most of them based in Sweden and Denmark.

Speaking during the signing ceremony in Dar es Salaam, Finance and Planning Minister Dr Philip Mpango said the amount will facilitate completion of the remaining 70 per cent of the second phase of the project.

“The money has been deposited with the Treasury and payments to the contractor begin next week. The government will keep on borrowing for development projects but we are keen that the loans secured don’t contribute to unnecessary piling up of the national debt,” he stated.

  1. Chartered Tanzania acted as global coordinator, bookrunner and mandated lead arranger on the facility agreement that is the largest foreign currency financing raised by the Treasury to date. The biggest component of financing is treated as a covered facility of export credit agencies of Denmark and Sweden.

“These two nations, Sweden and Denmark, have shown us their true friendship not only in words but in action. Please convey our country’s sincere appreciation to the export credit agencies and lenders in your countries that have supported this signature project. As a country we shall honour our commitments as we have always done,” the minister underlined.

He also commended the Development Bank of Southern Africa (DBSA), the Trade and Development Bank (TDB) and the African Export-Import Bank (Afrexim), for supporting the project in partnership with export credit agencies of Denmark and Sweden.

Sanjay Rughani, Chief Executive Officer for  Standard Chartered (T), said that the agreement proves investors’ confidence in the market and demonstrates Standard Chartered’s international network capabilities and commitment to Tanzania.

“As a leading international bank for Africa, with over 100 years of being in Tanzania, the African continent remains a key corridor not only for Standard Chartered but also our global clients.

“We are delighted to have reached this milestone in Tanzania to fund the SGR project that will deliver massive benefits to Tanzania and support the government’s 2025 vision of making Tanzania a semi-industrialised country,” he said.

The bank will continue to leverage its unique network reach and the credibility it has built over time to further position Tanzania as the go-to destination for investments, he stated.

Masanja Kadogosa, the director general of the Tanzania Railways Corporation, said that the Morogoro to Makutupora portion is completed at 30 per cent and that the loan will facilitate speeding up construction work.

“Construction of the Dar es Salaam to Morogoro first phase has been completed for about 75 per cent and still on the right track. We are confident that before mid this year Tanzanians shall witness completion of the SGR first phase thanks to the president,” he elaborated.

Treasury Permanent Secretary Doto James, Bank of Tanzania Governor Prof Florens Luoga also attended the signing ceremony, along with Danish ambassador Mette Norgaard Dissing-Spandet and the Swedish ambassador, Anders Sjoberg.

Robert Mengoni, the Italian ambassador and Calumm Mcallum, the country director for international trade at the UK High Commission also attended, while others  included the country manager for the African Development Bank, Dr. Alex Mubiru and the resident representative for the IMF, Jens Reinke.

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