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UK underwrites £373M upgrades to Zanzibar’s road network and airport

The UK government has enabled a financing package of €422M (£373M) for infrastructure projects across Zanzibar, Tanzania that will be driven by UK exporters.

The financing was underwritten by UK Export Finance (UKEF), the government’s export credit agency. The package will enable a historic upgrade of Pemba Airport – the smaller of two airports on the Zanzibar archipelago – and improvements to 103km of roads across the Pemba and Unguja Islands.

The upgrades to Pemba Airport will see it enabled to welcome international flights. This will see the runway extended, new terminal buildings, a new control tower and other infrastructure.

The road upgrades across Unguja and Pemba – Zanzibar’s largest islands – will see three major roads expanded to feature four lanes while fitting them with street lighting and additional paving.

UKEF worked with Citi Bank to unlock €180M (£159M) in loans for the airport upgrade and collaborated with Deutsche Bank to enable €242M (£214M) in loans to invest in the road improvements.

The projects will be delivered by strategic joint ventures, led by Propav Infraestructuras, a Spanish firm with extensive experience working in Brazil and Africa, in collaboration with global manufacturing company Mecco.

The terms of UKEF’s backing mean that these major projects are expected to create over £100M in export opportunities for UK companies. This follows on from £275M in exports from the UK to Tanzania last year and will be a boost for the UK’s construction sector.

United Republic of Tanzania minister of finance and planning Mwigulu Lameck Nchemba said: “I would like to emphasize the significant role that signing the loan agreements holds in financing infrastructure projects. These agreements will enable us to address critical infrastructure needs, boost tourism and improve the quality of life for our citizens.

“By securing this financing, we can embark on vital infrastructure development that will lay the foundation for a prosperous and sustainable future.”

UK minister for international trade Nigel Huddleston said: “Good local infrastructure is key to encouraging businesses to invest and work with local suppliers. This deal will support crucial development across Zanzibar, unlock new opportunities for UK companies in Africa, and grow sectors that will create jobs and boost the economy across our nations.”

British high commissioner to Tanzania David Concar said: “I couldn’t be more proud of this partnership. Developing countries need access to affordable infrastructure financing from reliable partners – and that is exactly what this initiative will deliver.

“It underscores the UK government’s commitment to working in partnership with Tanzania to support inclusive, sustainable economic development, including on the islands of Zanzibar. Congratulations to UK Export Finance, Tanzania’s Ministry of Finance and Planning, the government of Zanzibar and all other partners to the project for collaborating with such keen purpose to unlock this opportunity.”

Propav Infraestructuras financial structuring and institutional relations director Cristiano Becker Hees said: “We are excited to be part of these two ambitious projects that will have a significant positive impact. The expansion of Pemba Airport will create an international gateway, generating local employment and boosting regional trade.

“Simultaneously, the construction of 103km of roads in Zanzibar will enhance mobility and connectivity, driving economic growth. We take great pride in our involvement, working alongside esteemed British companies to ensure the quality of these projects.”

Source: New Civil Engineer