Tanzania's President John Magufuli. He said the country is ready to finance its major infrastructure projects. PHOTO | NMG
Tanzania wants to fund its multibillion-dollar railway, aircraft
modernisation and energy projects with its own resources, President
John Magufuli has said.
“We already have the funds for
the construction of the standard gauge railway until its completion from
Dar es Salaam to Isaka. We also have the resources internally to fund
the construction of the Stiegler Gorge hydroelectricity project,”
President Magufuli said at the opening of a tobacco processing cigarette
factory on Monday.
Last week, it emerged that Tanzania
had already paid more than $500 million to Turkish firm Yapi Merkezi
and Portuguese firm Mota-Engil for the construction of the second phase
of the projects. The first phase was awarded in February last year, to
build the $1.2 billion 205-km railway that will run from Dar es Salaam
to Morogoro.
Last week, the contractors were given the
go-ahead to build the 422-km second phase between Morogoro and Dodoma
at a cost of $1.9 billion.
Tanzania has already released part of the funds for the projects.
The
agreement between Kigali and Dar on the design, tendering and financing
will see the two countries work jointly on financing.
From the previous design, the 1,320km SGR project was expected
to cost the two countries $2.5 billion. Tanzania was expected to pay
$1.3 billion and Rwanda $1.2 billion. However, opting for an electric
rail could increase the costs.
In the recent past, the
two countries have preferred a different mix of models to fund their
infrastructure projects. In the first two phases of its SGR, Tanzania
has opted for its own domestic’s sources to fund the $1.2 billion
contract.
“We will consider a financing that’s good for
our people,” Makame Mbarawa, the Tanzanian Minister for Works,
Transports and Communications said.
Tanzania is also
planning to build the Stiegler’s Gorge hydroelectric project along
Rufiji River. Once complete, the project is expected to generate 2,100MW
of electricity, effectively doubling Tanzania’s power generation
capacity, while also diversifying its energy mix and ending chronic
electricity shortages.
The country’s current available power generation capacity is 1,500MW, against a demand of 1,352MW.
Tanzania’s
recent budget statement paints a picture of a government struggling to
meet its revenue targets so it is unclear how the projects will be
funded.
The country plans to spend $14.3 billion in the 2018/19 financial year, with the bulk of this covering infrastructural projects.
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