Dar es Salaam. A Tanzanian company has signed agreement with five Zambian entities in which the firm will facilitate financing of projects worth $4.229 billion through Islamic bonds.
With its headquarters in Dar es Salaam, Mayzuh Company, which deals in general
merchandise business and specialised services in Islamic finance, signed the
four contracts for Sukuk bond to raise money for financing road, housing units,
renewable energy and agriculture projects.
The projects in which Mayzuh (Zambia) Company Limited, a subsidiary of Mayzuh
Company Tanzania, will facilitate alternative financing include Trans Africa
Road Infrastructure Development (Tarid), Housing Units Project, Renewable
Energy Innovation Project and ARMTRACK Agriculture Project.
“These projects are in need
of financing using an alternative financing instrument called the Sukuk bond,”
said the company’s chief executive officer, Mr Mohammed Issa.
He said two other contracts worth $19.297 billion are going to be signed in the
near future for Zambian projects.
“After all preparations for the issuance of these instruments have been done,
the applications for licensing by Zambia Securities Commission (SEC) will be
done and since they are public offer notes, they will be listed in the Stock
Exchange for Zambians to have an opportunity to invest in them,” said Mr Issa.
“We’ll then cross-list them outside Zambia in East, Central and Southern Africa
stock markets as well as globally such as in Dubai Stock Exchange to attract
investors from there as well,” he added.
Zambia is currently implementing the “Link Zambia 8000 Project”, which seeks to
transform the country from land-locked to land-linked. The project involves
paving 8,201 km of road at an estimated cost of $5.6 billion. With the Tarid
Sukuk financing agreement, the demand was reduced by $2.0 billion.
The financing will involve two Economic Corridor roads including 860km from
Kipushi to Namibia border. It will also cover border facilities, dry ports at
the DRC border, road toll gates, truck servicing facilities and dispensaries
for emergencies along the road.
The other is construction of 670km from Musomena border (DR Congo) to Nankonde
border (Tanzania).
The ARMTRACK Agriculture Project is for a plantation for palm oil trees towards
making Zambia self-sufficient.
As for the Renewable Energy Innovation Project, it will add value to Zambian
electricity at lower cost.
“Through consultancy, Mayzuh Company Limited will assist the entities to engage
in the process of linking them with those having capital and looking for
opportunities to finance projects so that the two sides get what they want,”
said Mr Issa.
There has been a rising apetite for the Islamic financing in many countries
recently.
In Tanzania, financing through Sukuk bond enabled corporates to raise a total
of Sh64.5 billion in a span of two years.
“As we speak here today, our sister company is processing fours (4) projects
with a total Sukuk bond volume of Sh126.0 billion from three companies,” said
Mr Issa, adding that the governments of Tanzania and that of Zanzibar are also
expected to issue maiden sovereign Sukuk bonds soon.
In Africa, Sudan, Nigeria, Senegal, Ivory Coast, Togo, South Africa, Togo and
Egypt have been issuing Sukuk.
The UK, Luxembourg, Hong Kong, Japan and even The World Bank Group, IMF and
International Financial Capital (IFC) have also issued Sukuk.
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