Tanzania to issue first-of-its-kind green bond to address water challenges

Tanzania's Water Utility is gearing up to launch its first green bond with the support of the UN Capital Development Fund. The 10-year bond by the Tanga Urban Water Supply and Sanitation Authority will offer an attractive yield of 13.5% per annum and will be listed on the Dar Es Salaam Stock Exchange. The move is a significant step towards addressing water challenges in Tanzania, a country emblematic of broader water supply issues experienced across the continent. Peter Malika, UNCDF Tanzania's Senior Technical Advisor for Southern Africa, emphasized the importance of this green bond as part of the UNCDF's policy agenda for developing domestic capital markets to help countries finance their development plans. The bond aims to bridge the gap in infrastructure financing and integrate climate resilience into projects to meet global development goals like Agenda 2030 and Africa 2063. The Tanga bond is a historic milestone, utilizing a bankable portfolio of projects and adhering to international Green Bond standards. The issuance sets a precedent for other African cities and municipalities to leverage local capital markets for sustainable development. The bond's pricing at 13.5% aims to attract investors and pave the way for similar bond issuances in the region. Potential investors include national and regional institutional investors, insurance companies, banks, as well as retail investors, promoting financial inclusion. Malika expressed confidence in investor participation and hinted at future collaborations with partners like UNDP to scale up similar initiatives across Africa. The success of Tanzania's green bond issuance could set the stage for larger, more impactful investment opportunities in the future, contributing to climate resilience and sustainable development in the region.