Tanzania is set to receive a green bond of US $21M from the Tanga Urban Water Supply and Sanitation Authority (Tanga Uwasa) to boost water conservation efforts and increase access to water resources in the Tanga region.
The Tanzanian local water utility’s objective with the bond is to improve water supply to reach 100% of the population, up from the current estimated 96%, and support environmental conservation in the city and surrounding areas.
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Green bond
The bond which will be floated on the Dar es Salaam Stock Exchange (DSE), offers a return rate of 13.5%, paid semi-annually. The bond issuance supported by the Nairobi-based Financial Sector Deepening (FSD) Africa, marks the first time a sub-national public entity in East Africa has issued a green bond. It sets a precedent for utilizing sustainable finance to address local development challenges.
Tanzanian Vice-President Phillip Mpango highlights the potential of such bonds to reduce pressure on the government budget and redirect funds towards priority social initiatives. FSD Africa Chief Executive Mark Napier commends the issuance of the bond as a significant step towards inclusive growth and emphasizes the importance of strategic partnerships in driving positive change.
In general, Tanzania is considered to be water abundant, however, heterogeneous climate and geology contribute to significant seasonal, interannual, and geographic variability in water availability and water quality challenges.
Water stress is moderate according to the Falkenmark Water Stress Indexi as total annual renewable water per person is approximately 1,680 m3 and only 13 percent of its total water resources are abstracted by major economic sectors, which is less than SDG 6.4.2 water stress benchmarkii. However, increasing demand and a developing economy could increase water stress without improved management.
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