EIB promises to grow its investment portfolio in Tanzania

The European Investment Bank (EIB) has set its sights on growing its investment portfolio in Tanzania beyond the current Sh1.8 trillion, senior officials have said.

EIB vice president Thomas Östros said the envisaged increase in support is a response to the current government’s strategic plan to improve the business climate and investment environment.

Mr Östros was speaking during the EIB team’s recent visit to Tanzania to assess the bank’s projects, according to a statement made available to The Citizen yesterday.

In addition to inspecting the projects, representatives from the EIB’s Eastern Africa hub office in Nairobi also met government officials from the ministry of Finance as well as representatives of other multilateral institutions stationed in Tanzania.

The EIB is the European Union’s long-term financing institution, owned by its member states.

So far, the EIB has funded 28 projects valued at Sh1.8 trillion (680 million euros) and has also extended credit lines to Tanzania’s commercial banks and microfinance institutions for lending to the private sector, especially SMEs.

Notable projects that EIB has supported include Lake Victoria Water and Sanitation Programme in Mwanza, Tanesco Power Project, modernisation of Dar es Salaam port, and Kihansi hydroelectric power plant.

“I am pleased that the EIB team from the regional hub in Nairobi is following up on a pipeline of projects that we wish to support the government in actualising,” Mr Ostros said, according to a statement availed to The Citizen yesterday.

According to the statement, the EIB is currently preparing several new projects, including a solid waste management project in Tanga that is currently in a pre-feasibility study stage.

The project is under the EIB’s Clean Oceans Project Identification and Preparation (COPIP), which aims at reducing the amount of plastic waste ending up in oceans in the coastal cities of Sub-Saharan Africa. Other examples are direct investments in ICT companies to boost digitalisation.

Speaking during the visit, Tanzania’s Deputy Permanent Secretary for Public Finance Management, Amina K. Shaaban, said they were thrilled with the EIB visit.

“The fruitful discussions we have had on their support for development projects we can cooperate on with them. Their current visit is happening at the right time, as Tanzania is currently updating its Development Vision 2050 from the current one, which will end in 2025.”

She also lauded the work EIB Global is doing around providing investment support to women-led and/or women-owned projects with EU support.

Mr Ostros said he was pleased that the EIB team from the regional hub in Nairobi is following up on a pipeline of projects that they wish to support the government in actualizing.

“Our business model looks at ensuring that we work with the government to achieve shared development goals, which are also government priorities that improve citizens’ lives,” said Mr Östros.

He added: Having invested in over 28 projects to date, EIB has already signed over Sh1.8 trillion (680 million EUR) of support to the Government’s public sector initiatives, as well as offering credit lines (loans) to the country’s commercial banks and microfinance institutions for on-lending to private companies, especially SMEs, as well as to individuals in the private sector.

According to him, the bank has already disbursed Sh1.34 trillion, with more set to be released as projects kick-off.

EIB Global finances projects alongside other African and international development partners. In Tanzania, the bank works closely with the government to support investment in public sector infrastructure, back private sector business investment through local and international banks, and cooperate with large-scale corporate partners.

EIB Global’s growing interest in Tanzania has been showcased in various initiatives, including the EU-Tanzania business forum in February 2023, which brought together government officials, development partners, and business people from Europe and Tanzania, highlighting the various opportunities for economic partnership.

It was during this forum that EIB Global announced a Sh721 billion (270 million EUR) investment in the country, which included the bank’s largest-ever support to the Blue Economy anywhere in the world through a Sh267 billion (100 million EUR) financing initiative that is being implemented through partnering local commercial banks.