TANGA UWASA BRINGS EAST AFRICA’s FIRST SUBNATIONAL GREEN BOND TO LuxSE

 

During a visit by a Tanzanian delegation to Luxembourg which included representatives of the country’s Ministry of Finance, Ministry of Water and other public authorities, the Luxembourg Stock Exchange (LuxSE) and Tanga UWASA celebrated the listing of the Tanzania-based water authority’s pioneering green bond on LuxSE. The bond is displayed on the Luxembourg Green Exchange (LGX), the world’s reference platform for sustainable securities.

This historic achievement was made possible through the critical support and coordination of the UN Capital Development Fund (UNCDF), which played a pivotal role as the lead development finance advisor and technical partner to Tanga UWASA throughout the entire bond issuance process. UNCDF's support included project development, raising national awareness, creating and financing the issuance roadmap, and developing innovative risk mitigation strategies tailored to the Tanzanian market. This project serves as a model for UNCDF's efforts to develop sustainable finance mechanisms across East Africa and beyond.

Accessing global investors

The TZS 53 billion bond, equivalent to EUR 17.8 million, is the first green bond to be issued by a public institution in East Africa. It has a 10-year maturity and aims to finance water infrastructure projects and environmental conservation initiatives.

“As we appreciate that LuxSE is a place where ideas meet capital, become reality and create real impact; we aspire for our future Tanzanian issuers – both public and private sector – to access Luxembourg markets, get connected with a pool of global investors, raise capital, and drive growth. In other words, we would want to see more subnational, corporate, and even sovereign debt products listed in Luxembourg. We are developing a pipeline of transactions to facilitate this positive trend of sustainability investments; and remain committed to improving our country’s enabling environment to attract foreign investors and private sector,” said Dr. Mwigulu Lameck Nchemba, Hon Minister of Finance for Tanzania.

Transforming access to water in Tanzania

The bond, which was open to both domestic and international investors, was met with great interest when issued earlier this year, and twice oversubscribed. Around 65% of the funding came from domestic investors while 35% came from international investors. This is seen as an indication of the growing interest of the international investor community in sustainable investment opportunities in Tanzania.

The issuance highlights the important role subnational entities such as Tanga UWASA can play in unlocking capital market financing in local currency to fund sustainable development projects in Tanzania. The proceeds of the bond will go towards propelling thousands of households' access to safe and affordable water in the East African country and protecting the natural resources of the nation's famous Zigi river, among other key environmental projects.

The Managing Director of Tanga UWASA, Eng. Geofrey Hilly, emphasised that, “the listing of our green bond on LuxSE, underscores the utility’s commitment to advancing sustainable water services to our customers while remain a pioneer and an excellent model for replication by other public entities. We are thankful to all our investors and partners who supported our transaction, and we reaffirm our assurance in meeting applicable standards including our investment obligations.”