First Buyer's Credit for the Government of Tanzania
Supporting Export of Machineries and Equipment for Power Generation by Japanese Company to TANESCO
- Area: Africa
- Export Loans
The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed on March 27 a loan agreement in buyer's credit (export loan) totaling up to USD175 million (JBIC portion) with the Government of United Republic of Tanzania (the Government of Tanzania). The loan is cofinanced with Sumitomo Mitsui Banking Corporation (lead arranger), bringing the total cofinancing amount to USD292 million, with Nippon Export and Investment Insurance (NEXI) providing the insurance on the cofinanced portion.
This loan is intended to finance the procurement of a whole set of machineries and equipment for a gas-fired combine cycle power plant (240MW) in Dar es Salaam, Tanzania to be constructed by SUMITOMO CORPORATION including gas turbines made by MITSUBISHI HITACHI POWER SYSTEMS, LTD. The owner of the power plant is TANZANIA ELECTRIC SUPPLY COMPANY (TANESCO).
This is the first export loan that JBIC is to extend to the Government of Tanzania. Due to the fast-growing demand for electricity in Tanzania backed with steady economic growth, the Government of Tanzania established the Power System Master Plan which lays out plans to expand power supply capability and reduce power generation costs, utilizing abundant domestic gas resources discovered in recent years. This loan is expected to contribute to strengthening and maintaining the international competitiveness of Japanese companies through JBIC's support for the export of a whole set of machineries and equipment for a gas-fired combined cycle power plant, as well as contributing to the economic growth of Tanzania through stable supply of electricity.
JBIC launched the JBIC Facility for African Investment and Trade Enhancement ("FAITH")*1
to support the promotion of private sector-led growth and the acceleration of infrastructure development in African countries, as the Government of Japan expressed that it would work toward expanding trade and investment in African countries in tandem with the private sector at the 5th Tokyo International Conference on African Development (TICAD V), and this loan is provided as financial support under the FAITH.
As Japan's policy-based financial institution, JBIC will continue to financially support the export of machineries and equipment related to infrastructure and overseas business deployment of Japanese companies, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
- *1 See Information on June 3, 2013.