Magufuli’s Rufiji Hydropower Project Gets the Much Awaited Bank Guarantee

By Special Correspondent, Dar es Salaam

TANZANIA’s 2115MW Rufiji Hydro Power Project (RHPP) at the Steigler’s Gorge within the world-famous Selous Game Reserve in Morogoro Region has received a new major impetus. This is after the CRDB Bank Plc and United Bank of Africa (UBA-Tanzania) guaranteed financial syndication of TZS1.7 trillion for implementation by the contractors.

The two Dar es Salaam-based banks’ syndication represents ten (10) per cent of the project’s local component of 30 per cent of the required total project funding of TZS 6.6 trillion. 

Project implementation is by a joint venture between Arab Contractors and Elsewedy Electric Co S.A.E. Both are Egyptian construction companies and manufacturer of electrical products respectively. 

The two companies will be working hand-in-glove with the state power utility Tanzania Electric Supply Company Ltd (TANESCO) as representatives of the Fifth-Phase Government of the United Republic of Tanzania.

The Chairman of the Board of Directors of CRDB Bank Plc, Mr. Ally Leay, together with the Bank’s Managing Director, Mr. Abdulmajid M. Nsekela, formally handed over the financial syndication guarantee of TZS 1.7 trillion to the Tanesco Managing Director, Engineer Dr. Tito Mwinuka. 

For his part, the Chairman of the UBA Board of Directors, Ambassador Tuvako N. Manongi – who was accompanied by the Bank’s Managing Director, Mr. Usman Isiaka – handed similar documentation to Eng. Mwinuka.

Speaking in the nation's commercial capital Dar es Salaam when witnessing the CRDB Bank Plc and UBA-Tanzania officially handing the documentation regarding the US$737.5 million (over TZS1.7 Trillion) bank guarantee to Tanesco, the Permanent Secretary (PermSec) of the Ministry of Energy, Dr. Hamis Mwinyimvua, said the guarantee is a contractual agreement that is geared to speed up construction of the fourth biggest power dam in East Africa.

“The guarantee safeguards the construction agreement so as to avert delays, and the advance payment will be made soon,” said Mr. Mwinyimvua, adding that the project execution period is 42 months, including six months for site mobilization.

“This is the largest project to be implemented by the government of the United Republic in recent years, and it will help our country to completely solve the challenge of power supply,” the PermSec explained.

For his part, the Deputy BoT Governor, Dr. Bernard Kibesse, said implementation of the Rufiji Hydro Power Project is testimony to His Excellency President John Magufuli’s commitment to ensure that the country gets cheap and sustainable power supply. 

“Without cheap and reliable power, it's impossible to realize a semi-industrialized economy. Huge power-intensive projects such as the Standard Gauge Railway (SGR) the Mchuchuma Coal and Liganga Iron Ore projects need massive power supply," Dr. Kibesse stated.

 For his part, the Group Managing Director of the CRDB Bank Plc, Mr. Abdulmajid Nsekela, said the two banks – his bank and UBA-Tanzania – facilitated the historic syndication so as to enable Tanzania to produce reliable energy at affordable cost in support of Dr. Magufuli’s industrialization drive.

The UBA Managing Director, Usman Imam Isiaka, said that, under the syndication, the foreign component carries 70 per cent, while the local component is 30 per cent, equivalent to TZS1.7 trillion. The foreign component is backed by foreign lenders, and the two domestic banks are handling the local portion.

“This is the biggest syndication in Africa, involving a huge amount of money… The biggest so far to be executed by lenders within the continent,” Mr. Isiaka said of the syndication for the project whose total cost is 2.95 billion US dollars (about TZS 6.6 trillion).

Elsewedy Electric Head of Human Resources Gabriel Mwita said site mobilization is scheduled for completion by mid-next month (May 2019) – and, thereafter, comes the actual construction.

“We are finalizing deployment of construction equipment and mobilization of human and financial resources. This will end by mid-May,” he said. The human resource professional said the project will employ between 6,000 and 8,000 Tanzanians – starting with 1,000 workers next month, and progressively increasing the number. 

In his remarks, the Egyptian Ambassador to Tanzania, His Excellency Mohamed Yasser el Shawaf, said the Rufiji Hydropower mega-power project has been made possible because of the strong bilateral ties between Egypt and Tanzania, noting that the two nations’ bilateral  relations date back to the early 1960s following the latter’s Independence from British rule on December 9, 1961.

For his part, the TanESCO Managing Director, Engineer Dr. Tito Mwinuka, expressed gratitude that his institution’s role as the construction supervisor of the 2,115MW hydroelectric power project is assured.

"The current situation makes it possible for money to be paid to the contractor when needed, or where the contractor is eligible to be paid. So, from now on, implementation of the project will not have any hindrance on account of funding,” Dr. Mwinuka stressed.