In a landmark event for alternative project financing in Tanzania, the Tanga UWASA Water Bond, valued at 53.12 billion Tanzanian Shillings, was listed on the Dar es Salaam Stock Exchange (DSE). This milestone marks the country’s first-ever subnational bond, which was slightly oversubscribed, raising 54.72 billion Shillings—103% of its target.
The bond proceeds will significantly enhance water availability in Tanga, the first municipality in Tanzania. During the listing ceremony held in Dodoma, Minister of Works Innocent Bashungwa highlighted the bond as a model for other government entities seeking to supplement the conventional budget framework and promote Local Government Authorities' (LGAs) financial independence.
“This listing event clearly shows that our capital markets have the capability to finance major projects,” stated Mr. Bashungwa. The bond will enable Tanga to double its water supply capacity from 30,000 to 60,000 cubic meters per day, meeting the city’s current water demand.
Mr. Bashungwa also emphasized that this approach paves the way for other ministries to secure project funding independently of central government resources, which are often limited. He mentioned that the Ministry of Works is preparing an infrastructure bond to finance various transport infrastructure projects, including road construction.
Statistics reveal that 65% of the bond was purchased by local investors, with the remaining 35% acquired by foreign investors.
Minister of Water Jumaa Aweso acknowledged the ongoing high demand for water infrastructure funding nationwide. He encouraged other water utilities to emulate the Tanga UWASA bond to raise funds from the public, complementing government efforts and accelerating the provision of water services.
Peter Malika, head of the United Nations Capital Development Fund (UNCDF) in Tanzania, congratulated the government on this historic achievement. He noted that UNCDF’s collaboration with the government has helped clear technical and policy hurdles, setting a precedent for future transactions to follow the Tanga UWASA bond as a national template.
DSE Chief Executive Officer Mary Mniwasa praised the bond listing as a testament to the effective collaboration between public and private sectors. She urged public institutions, companies, and the private sector to continue raising capital to foster a competitive economy and promote sustainable development.
Tanga UWASA Managing Director Eng. Geofrey Hilly expressed immense pride in the successful bond listing. “As pioneers, we are committed to maintaining professionalism and ensuring the proper use of funds for our investors,” he said.
Key stakeholders involved in the bond preparation included NBC Bank (lead transaction advisor), FSD Africa (supported green framework), FIMCO and Global Sovereign Advisory (financial and investment advisory), ALN Tanzania (legal advisor), Innovex (reporting accountant), Vertex International Securities (stockbroker), and ISS Corporate Solutions.