Prime
Inaugural Tanga water bond oversubscribed by 103 percent
Vice President, Dr Philip Mpango launches the water bond on February 22, 2024. PHOTO | FILE
What you need to know:
- The 10-year water bond, which opened from February 22 this year to April 4, is the first in Sub-Saharan Africa, according to Tanga Uwasa managing director, Mr Geofrey Hilly
Dar es salaam. The first green bond for water development projects issued by Tanga Urban Water Supply and Sanitation Authority (Tanga Uwasa) has been subscribed to by 103 percent, a trend that shows a growing appetite for green financing.
According to the public notice posted yesterday, the water utility aimed to collect Sh53.12 billion to improve water supply infrastructure and accelerate environmental conservation in Tanga City, but the investors responded with bids worth Sh54.72 billion.
The 10-year water bond, which opened from February 22 this year to April 4, is the first in Sub-Saharan Africa, according to Tanga Uwasa managing director, Mr Geofrey Hilly.
He said the response was “very satisfying,” even though it was a new thing for a public institution.
He said many investors came forward in the last few days because they spent much time trying to understand the water institution.
“"Having achieved the targeted amount, we did not see the need to extend,” said Mr Hilly.
He encouraged other authorities to follow suit.
“We are seeing some water institutions in the country starting to make follow-ups so that they can do the same,” he said.
He said the process of getting contractors and consulting engineers to implement water infrastructure and expand distribution to districts, especially in Mkinga, where the supply of water is critical, has already started.
Through the financing, Tanga Uwasa targets increasing the supply of water to 60 million liters per day from 45 million liters currently and changing 10,000 water meters to prepaid meters.
In January this year, the commissioner for financial sector development in the Ministry of Finance, Dr Charles Mwamwaja, told The Citizen that other government institutions would soon start to raise funds for crucial development projects.
He said the government was in the advanced stages of drafting documents that comply with capital market standards so that it could issue green bonds and speed up various development projects.
“Many investors have an appetite for investment in things that concern them. Green bonds are currently the trend around the world. The government institutions, along with continuing to create an enabling environment, will soon start entering the markets,” he said.
Green bonds have recorded significant success in the banking industry in recent auctions.
Last year, Tanzania’s two largest commercial lenders, CRDB Bank and NMB Bank, issued multicurrency green bonds, but both were oversubscribed.
Green bonds are fixed-income securities that raise capital for projects that support the combating of climate change and investment in sustainable development such as renewable energy, energy efficiency, green transport and waste-water treatment.
