Cape Town – Tanzania has entered the green bond market with the launch of a 10-year $20.8 million green bond.
The bond, issued by the Tanga Urban Water Supply and Sanitation Authority (Tanga Uwasa), aims to raise funds to boost the supply of drinking water in the northerly port city of Tanga in an attempt to achieve universal coverage in the city and neighbouring towns.
Backed by Financial Sector Deepening Africa, the bond will be listed on the Dar es Salaam Stock Exchange with a 13.5% annual yield.
Tanzania aims to ensure all people in the country have access to clean water by 2030; currently only 86% of urban areas and 72.3% of rural areas have access to clean drinking water, Afrik21 reports.
According to the United Nations Impact Capital for Development, it is the first subnational water green bond in Tanzania and East Africa.
Tanzanian Vice President Philip Mpango believes such bonds will ease pressure on the government’s budget, allowing it to focus on vital social initiatives instead.
“This bond and others like it will also reduce pressure on the Tanzanian government’s budget by strengthening capital in the country,” Mpango said.
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Compiled by Samantha Machele
