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- Aug 2, 2010
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By In2EastAfrica - Wed Jun 29, 11:00 am
Permanent Secretary in the Ministry of Energy and Minerals, Mr David Jairo
Exim Bank of China has submitted a USD700m proposal to the government to fund the 160MW Mnazi-Bay gas-to-electricity project, a clear indication that the venture will take off as planned, Energy and Minerals ministry permanent secretary David Jairo has said.
He told The Guardian in a telephone interview that the submission is in response to a government application to the bank for the loan.
The positive response is a clear sign that the Tanzanian government is on the "right track" in its fund sourcing quest for Mnazi Bay gas-for-electricity in Mtwara to take off, Jairo said.
"By itself, that's a good sign that the project would be implemented as planned," the PS said.
The government had applied for a USD700m loan from the Chinese bank to finance the project as one of the short-term measures aimed at resolving the prolonged power crisis.
According to the permanent secretary, in the proposal, the bank also gives details on the loan-issuing mechanism and conditions.
However, he would not disclose the contents of the bank's proposal saying: "I am not in a position to give the details of the document, because I have not seen the proposal…but I am certain they have already presented it to the Treasury."
Since the Treasury has all the technical and financial details on the planned power project, it may decide to go with the proposal independently, negotiate with the bank and enter a deal.
"Alternatively, the Treasury may form a task force comprising experts and officials from sector ministry (Energy and Minerals) to negotiate with the Chinese bank…both options can be used, but what we want is money for implementing this project (Mnazi Bay project)," he said.
According to the PS, the government has already allocated the domestic package (15 per cent of the total investment).
"At the moment talks between the government and the bank on the project's financing are going on well and are now at an advanced stage," Jairo said without disclosing when the discussions will be concluded.
The project will be implemented by Tanesco, but is likely to have other stakeholders, including, Artumas, a private power firm based in Mtwara and the Tanzania Petroleum Development Corporation (TPDC).
Artumas and TPDC own the gas infrastructure that the key implementer, Tanesco expects to use in undertaking the project.
"Once the loan is secured, the Treasury will transfer the money over to Tanesco so that implementation can start immediately," the PS said.
If all goes well, he said implementation of the project is expected to kick off at the end of this year.
"Implementation of short-term strategies such as the Mnazi Bay gas project will be a big boost to the daily power supply capacity, thus off-setting existing shortage," he concluded.
By Judica Tarimo, The Guardian
Permanent Secretary in the Ministry of Energy and Minerals, Mr David Jairo
Exim Bank of China has submitted a USD700m proposal to the government to fund the 160MW Mnazi-Bay gas-to-electricity project, a clear indication that the venture will take off as planned, Energy and Minerals ministry permanent secretary David Jairo has said.
He told The Guardian in a telephone interview that the submission is in response to a government application to the bank for the loan.
The positive response is a clear sign that the Tanzanian government is on the "right track" in its fund sourcing quest for Mnazi Bay gas-for-electricity in Mtwara to take off, Jairo said.
"By itself, that's a good sign that the project would be implemented as planned," the PS said.
The government had applied for a USD700m loan from the Chinese bank to finance the project as one of the short-term measures aimed at resolving the prolonged power crisis.
According to the permanent secretary, in the proposal, the bank also gives details on the loan-issuing mechanism and conditions.
However, he would not disclose the contents of the bank's proposal saying: "I am not in a position to give the details of the document, because I have not seen the proposal…but I am certain they have already presented it to the Treasury."
Since the Treasury has all the technical and financial details on the planned power project, it may decide to go with the proposal independently, negotiate with the bank and enter a deal.
"Alternatively, the Treasury may form a task force comprising experts and officials from sector ministry (Energy and Minerals) to negotiate with the Chinese bank…both options can be used, but what we want is money for implementing this project (Mnazi Bay project)," he said.
According to the PS, the government has already allocated the domestic package (15 per cent of the total investment).
"At the moment talks between the government and the bank on the project's financing are going on well and are now at an advanced stage," Jairo said without disclosing when the discussions will be concluded.
The project will be implemented by Tanesco, but is likely to have other stakeholders, including, Artumas, a private power firm based in Mtwara and the Tanzania Petroleum Development Corporation (TPDC).
Artumas and TPDC own the gas infrastructure that the key implementer, Tanesco expects to use in undertaking the project.
"Once the loan is secured, the Treasury will transfer the money over to Tanesco so that implementation can start immediately," the PS said.
If all goes well, he said implementation of the project is expected to kick off at the end of this year.
"Implementation of short-term strategies such as the Mnazi Bay gas project will be a big boost to the daily power supply capacity, thus off-setting existing shortage," he concluded.
By Judica Tarimo, The Guardian
