DODOMA (TANZANIA), African Development Bank (AfDB) has supported Tanzania's push for 16 per cent stake in mineral and oil projects for mutual benefits to both, citizens and investors.
AfDB's Vice-President, Energy, Amadou Hott, expressed the bank's support, saying some countries in the world control freely between 14 and 16 per cent shares in mineral resource projects for both parties to benefit from the resources.
The important thing is to ensure that agreements between the private investors and government are open, fair and balanced. It's critical that the investors agree to the arrangement, he said during his talks with Tanzanian Finance and Planning Minister Philip Mpango in the designated capital.
The talks specifically focused on how the bank can help to improve Tanzania Electric Supply Company (TANESCO) to operate commercially and get rid of dependence on loans and state subsidies.
He cited countries like Senegal which have applied the policy and have not experienced problems with investors, describing Tanzania's demand for more shares as a good move to protect the national resources.
Recent concern by Tanzania's major investor Aliko Dangote, as reported in UK media, that the government move to take 16 per cent stake in mineral and oil sector could scare away investors has sparked heated public debate.
Speaking on the debt that TANESCO owes various institutions, Hott said the bank intends to give the country a 200 million US dollar grant (about 450bn/-).
The money will be used to pay the 370 million dollar (about 800bn/-) 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 to have received 1.1 billion US dollars (over 2tr/-) from the bank by 2019.
We are still in talks with the bank over the best way to implement conditions on the 200 million dollar grant that it wants to give the government for clearance of some Tanesco debts totalling 370 million US dollars, Dr Mpango said.
The minister further disclosed that the AfDB has expressed interest to support execution of Stieglers Gorge mega power project to produce 2,100 MW for supply to the envisaged industries.
The bank has also agreed to finance the first phase project to construct power infrastructure in the North-West zone, from Mbeya through Sumbawanga to Nyakanazi, at 123 million US dollar (over 270bn/-).
The bank is on our behalf negotiating with Korea Development Corporation to give us another 60 million US dollar for the project, he said. In another development, the bank will fund the geothemol project in the rift valley areas at 65 million US dollars.
Dr Mpango said another major project that the bank will finance is the supply of electricity to major cities in the country, requiring 274 million US dollars to completion.
Source: NAM NEWS NETWORK