AFRICAN Development Bank (AfDB) has supported Tanzania’s push for 16 per cent stake in mineral and oil projects for mutual benefits to the country and investors respectively.
AfDB’s Vice-President, Energy, Amadou Hott, expressed the bank’s support, saying some countries in the world control freely between 14 and 16 per cent shares in mineral resource projects for both parties to benefit from the resources.
“The important thing is to ensure that agreements between the private investors and government are open, fair and balanced. It’s critical that the investors agree to the arrangement,” Mr Hott said during his talks with Finance and Planning Minister Philip Mpango in the designated capital.
Finance and Planning Minister Philip Mpango
The talks specifically focused on how the bank can help to improve Tanzania Electric Supply Company (TANESCO) to operate commercially and get rid of dependence on loans and state subsidies.
He cited countries like Senegal which have applied the policy and have not experienced problems with investors, describing Tanzania’s demand for more shares as a good move to protect the national resources.
Recent concern by Tanzania’s major investor Aliko Dangote, as reported in UK media, that the government move to take 16 per cent stake in mineral and oil sector could scare away investors has sparked heated public debate.
Speaking on the debt that TANESCO owes various institutions, Mr Hott said the bank intends to give the country a 200 million US dollar grant (about 450bn/-).
The money will be used to pay the 370 million dollar (about 800bn/-) loans, which the public utility firm owes various institutions.
The loan payment is expected to enable the company to operate commercially.