Tanzania says seeking US$300 million loan from Credit Suisse

A vehicle passes along the road in the Hie district, Tanzania, with Mount Kilimanjaro in the distance
A vehicle passes along the road in the Hie district, Tanzania, with Mount Kilimanjaro in the distancePHOTO: REUTERS FILE

DAR ES SALAAM, Dec 31 (Reuters) - Tanzania is in talks with banking giant Credit Suisse for a US$300 million (S$434 million) loan that would go towards financing infrastructure projects, the country's finance minister said on Dec 31, 2016.

Philip Mpango said Tanzania was also in separate talks with other lenders, including the Kuwait Fund for Arab Economic Development, the Abu Dhabi state fund Mubadala Development and the OPEC Fund for International Development (OFID) for an unspecified amount of loans.

"The government has initiated negotiations with Credit Suisse in the United Kingdom for a loan of $300 million following recent improvements in the cost of borrowing in European markets," he said in a statement.

Mpango said Tanzania plans to borrow a total of $936m (S$1.35 billion) from external non-concessional sources in the 2016/17 fiscal year to support domestic revenues and finance public spending.

The finance and planning ministry said earlier this month Tanzania aims to issue its first Eurobond in the fiscal year 2017/18 to fund new infrastructure projects after repeated delays as the country sought a credit rating.

The government has not said how much money it wants to raise in the Eurobond sale.

President John Magufuli, a former public works minister, has promised to revamp ageing infrastructure and has also led an aggressive anti-corruption drive since his election a year ago, both aimed at restoring efficiency to public services.

The government said in 2015 it had concluded talks with ratings agency Fitch for a sovereign credit rating and also hoped to finalise similar discussions with Moody's Investors Service, paving the way for a possible debut Eurobond issue.