Dar es Salaam. European Investment Bank (EIB) Vice President Thomas Östros is in Tanzania leading the lending arm of the European Union’s high-level delegation to the East African nation aimed at improving the bank’s investment in the country.
A statement released Tuesday revealed that the visit provides an opportunity to assess EIB-supported projects, with a particular focus on the green private sector, public infrastructure, gender-lens investing, and boosting the blue economy.
Speaking during a briefing with journalists, Mr Östros lauded the government’s support to the country’s private sector, noting that the Tanzanian economy has shown remarkable resilience and growth over the past years.
“This has made Tanzania a key partner under the EU’s Global Gateway initiative and, hence, a key partner for the EIB,” he said. “We are more than happy to work with our partners in Tanzania to strengthen the country further, both its public and private sector.”
The delegation will meet with Presidents Samia Suluhu Hassan, Hussein Mwinyi, and other top government officials during the visit.
Handover
The meetings will cover the handover of the first phase of the Lake Victoria Water and Sanitation Project, which aims to increase the coverage of water, wastewater, and sanitation services to urban and peri-urban populations in the Mwanza, Bukoba, and Musoma areas.
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Talks will also centre on the ongoing airport rehabilitation and expansion works being supported by EIB Global in Bukoba, Kigoma, Tabora, Shinyanga and Sumbawanga. Once complete, the project is expected to stimulate investment in the area, create jobs, enhance income levels, boost commerce and trade with neighbouring areas, attract tourism, and increase social and economic interactions at the airports.
The project benefits include an overall increase in aviation safety as the five airports will comply with international safety and security standards.
The parties will also discuss potential support for other investments, such as the next phases of the Bus Rapid Transit system, Phase 2 of the Lake Victoria Water and Sanitation Project, the Zanzibar Water Security Project, and the Tanga Plastic Waste Management Project. These projects are all in different stages of evaluation.
In addition, Mr Östros will meet with representatives of the country’s leading banks and some SME beneficiaries of EIB Global’s partnership with local commercial banks.
Largest recipient
In 2023, Tanzania was the largest recipient of EIB support in Sub-Saharan Africa. The country benefited from Sh777 billion, or EUR 270 million, of new investment to support businesses across Tanzania through partnerships with Tanzanian Banks, namely CRDB, NMB and KCB-Tanzania.
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A statement released Tuesday noted that the Investment has so far facilitated lending to over 10,000 small—and medium-sized businesses, of which over 3,000 are women-led enterprises and over 900 are blue-economy enterprises and co-operatives in Zanzibar.
It added: “Micro- and small- and medium-sized businesses (MSMEs) are the economic lifeblood of African economies but are more vulnerable to crises than large enterprises. Improved access to finance is very important in boosting growth and creating jobs for the millions of young Africans entering the workforce each year. In developing countries, SMEs contribute more than one-third of GDP and more than 80 per cent of new jobs.”
EIB Global’s partnerships with local banks allow them to increase their lending portfolios, take more risks and thus provide greater access to credit for a wider range of business clients.
Financial intermediaries benefit from EIB Global’s more favourable financial terms compared to commercial borrowing, and banks transfer this advantage to the final beneficiaries: SMEs.
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In conjunction with the credit line, EIB Global will provide, with EU support, technical assistance to the financial intermediaries and beneficiary SMEs to roll out successful projects. This will increase the added value to EIB Global’s counterparts for the creation of sustainable enterprises.
This framework has helped commercial banks increase lending and focus on inclusive finance solutions and thus work with underserved private sectors they are reluctant to, due to the risks associated with the underlying projects.
Team Europe
Deputy Head of the European Union Delegation to Tanzania Emilio Rossetti said the high-level visit and meetings represent Tanzania’s enduring partnership with “Team Europe.”
“The European Union, its Member States and their implementing agencies and public development banks work together to deliver the Global Gateway vision: supporting smart investments in quality infrastructure, respecting the highest social and environmental standards, in line with the EU’s values and standards,” said Mr Rossetti.
The EIB started operating in Tanzania in 1977 and has since provided loans financing 36 projects, amounting to Sh2 trillion, or EUR 680 million.
EIB Global’s focus has been to invest in the sectors with the highest potential to create sustainable jobs, especially MSMEs in agriculture, green and digital services. During his visit, Vice President Thomas Östros will visit some businesses that have received support in the blue economy in Zanzibar, focusing on women and youth.
