Regional lender, Trade and Development Bank for infrastructure and other projects has approved a $1bn syndicated loan for Tanzania.
In a news report by Reuters, the government of Tanzania has confirmed receipt of the funds and is seeking an added $500 million from the bank.
“TDB has issued a $1 billion soft loan to the country and is now finalising procedures for releasing other additional loans worth $500 million for implementation of various development projects,” the presidency said in a statement late on Monday.
It will be recalled that in 2016, Tanzania’s government had agreed on terms for a $7.6 billion loan from China’s Export-Import Bank (Exim) to build a railway line that will link it to neighbouring countries, but for no reasons given, the money never got paid by the loaners.
East Africa’s third-biggest economy wants to profit from its long coastline and upgrade rickety railways and roads to serve growing economies in the wider East and Central Africa region.
TDB’s Chief Executive Admassu Tadesse, said the bank was in discussion with the Tanzanian government for additional loans worth “hundreds of millions of dollars” to finance infrastructure projects, which includes a new railway.
“We underwrote $500 million of that $1 billion and the other $500 million was mobilised and raised through some of our partners,” said Tadesse after meeting Tanzania’s president.
“There is more on the table right now. We’ll be putting in several hundred million going forward.”
In total, Tanzania wants to spend $14.2 billion over the next five years to build a 2,561 km (1,591 miles) standard gauge railway network connecting its main Indian Ocean port of Dar es Salaam to its hinterland.
Tadesse said the high-speed electric rail network that Tanzania is building is expected to boost trade with landlocked neighbours in the region.
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB), formerly the PTA Bank, is a multilateral, treaty-based development financial institution, with assets of about US$ 5.6 billion and is owned by regional states and other shareholders.