The East African country is new to the global green bond market but has quickly become one of Africa’s most active issuers.
The water management body of the northern coastal city of Tanga is floating a 53.1 billion shilling ($20.8 million) green bond on the Dar es Salaam Stock Exchange. The Tanga Urban Water Supply and Sanitation Authority hopes to be able to provide water piping and 24-hour delivery to 100% of the city and to 95% of nearby townships by next year.
The “Tanga Bond is a demonstration that capital markets are a viable option for financing national development needs without increasing the national debt limits,” said Peter Malika of the UN Capital Development Fund, which is providing technical assistance for the bond alongside FSD Africa.
Just eight countries in sub-Saharan Africa have issued green bonds; their engagement accounts for less than 1% of more than $2.5 trillion in global green bond issuances. Tanzania’s CRDB Bank issued a $300 million green bond last year to fund climate mitigation projects in renewable energy, manufacturing, water and infrastructure. NMB Bank issued a $400 million green bond to fund sustainable energy, transport and water treatment projects.
The Tanga Bond is part of Tanzania’s three-year-old Alternative Project Financing strategy with UNCDF to mobilize domestic capital for infrastructure projects.
