Tanzania aims for debut Eurobond in 2017/18 – ministry

Tanzania aims to issue its first Eurobond in fiscal 2017/18 to fund new infrastructure, the Finance and Planning Ministry said on Thursday, after repeated delays in the launch as it sought a credit rating.

It did not say how much the bond would be worth, but said the government wanted to raise $900 million in the financial year starting July 1 to fund infrastructure projects.

President John Magufuli, a former public works minister, has promised to renew creaking infrastructure with transport links and other projects, and has also led an anti-corruption drive since his election a year ago.

“The funds will be raised through issuance of a Eurobond and other modalities including tapping the syndicated loan and export credit agencies,” the ministry said in a budget document.

The Finance Ministry had said last year it had concluded talks with Fitch Ratings for a sovereign credit rating and also hoped to finalise similar discussions with Moody’s Investors Service, paving the way for a possible debut Eurobond issue.

“It will help them meet their borrowing target to finance their infrastructure plans,” said Bhaswar Mukhopadhya, the resident representative of the International Monetary Fund, referring to the Eurobond plans.

A IMF mission in October recommended the government prioritise financing and procurement for infrastructure spending to sustain growth, he said. The IMF predicts that Tanzania’s economy will grow at 6.9 percent this year.

The ministry’s budget document also said: “The government will continue to maintain good relationship with traditional and new emerging creditors to sustain concessional borrowing as the most preferable source of external funding.”