DAR-ES-SALAAM, The African Development Bank (AfDB) has expressed support for Tanzania's push to secure a 16 per cent stake in mineral and oil projects in the country for mutual benefits to both the people and the investors.
The AfDB Vice-President for the energy sector, Amadou Hott, who expressed the bank's support here over the weekend, said some countries controlled between 14 and 16 per cent shares in mineral resource projects to ensure that both sides benefit from the resources.
The important thing is to ensure that agreements between the private investors and the government are open, fair and balanced. It's critical that the investors agree to the arrangement, Hott said during his talks with Finance and Planning Minister Philip Mpango.
The talks specifically focused on how the Bank can help improve Tanzania Electric Supply Company (TANESCO) to operate commercially and end its dependence on loans and State subsidies.
Hott cited countries such as Senegal which have applied the policy and have not experienced problems with investors, and he described Tanzania's demand for a bigger share in such projects as a good move to protect the nation's resources.
Recent concerns voiced by a major investor, Nigerian billionaire Aliko Dangote, as reported in some media, that the Tanzanian government's move to take a 16 per cent stake in mineral and oil sector projects could scare away investors has sparked heated public debate on the matter here.
Speaking on the debt that TANESCO owes various financial institutions, Hott said the AfDB intended to give Tanzania a 200 million US dollar grant to be used to repay the 370 million USD in loans, which the public utility firm owes various institutions. The loan payment is expected to enable the company to operate commercially.
Dr Mpango thanked the Bank for its various supports to the government, citing grants and soft loans, with the energy sector alone having received 1.1 billion USD from the Bank by 2019.
We are still in talks with the Bank over the best way to implement conditions on the 200 million USD grant that it wants to give the government for clearance of some Tanesco debts totalling 370 million USD, Dr Mpango said.
The minister further disclosed that the AfDB had expressed interest to support execution of the Stieglers Gorge mega power project to produce 2,100 megawats (MW) of electricity for supply to envisaged industries.
The Bank has also agreed to finance the first phase of a project to construct power infrastructure in Tanzania's North-West zone, from Mbeya through Sumbawanga to Nyakanazi, at a cost of 123 million USD.
The bank is on our behalf negotiating with Korea Development Corporation to give us another 60 million USD for the project, he said. In another development, the AfDB will fund a geo-themol project in Tanzania's Rift Valley region amounting to 65 million USD.
Dr Mpango said another major project which the Bank would finance was the supply of electricity to major cities in the country, requiring 274 million USD for completion.
Source: NAM NEWS NETWORK