Tanzania’s NMB Bank opens $400 mln green bond program

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Reuters

Tanzania’s NMB Bank (NMB.TZ) is launching a 10 year multi currency medium term bond of 1 trillion Tanzanian shillings ($400 million) under a green bonds initiative, it said on Monday.

African nations and businesses have been vying to increase their share of climate finance, to combat climate change and invest in sustainable development.

The so-called green bonds are fixed income securities that raise capital for projects in renewable energy, energy efficiency, green transport and waste-water treatment.

NMB kicked off the sale of the first tranche of the sustainable note, dubbed “Jamii Bond”, to raise 75 billion shillings with the option of raising an extra 25 billion shillings if there is sufficient demand, it said.

The tranche will also raise $10 million from offshore private investors, NMB said, with the option of taking an extra $5 million depending on investor demand.

The cash will be used to finance environmental and social projects, NMB said, without providing details.

The bond will be for a period of three years and it will come with an annual interest rate of 9.5% to be paid quarterly, NMB said, and it will be on sale until Oct. 27.

NMB’s green bond issuance has been supported by FSD Africa, an organisation that helps to deepen financial inclusion on the continent.

NMB’s move follows that of another Tanzanian commercial bank, CRDB Bank (CRDB.TZ), which announced its own $300 million green bond issuance program last month.

Tanga cement narrows Q2 losses to 2.1bn/-

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DAR ES SALAAM: Tanga Cement Company reported a 2.1bn/- loss in the second quarter of 2023, a slight improvement from 2.4bn/- loss before tax made in a similar period last year.

The Dar es Salaam Stock Exchange (DSE) listed cement maker which trades under the Simba Cement Brand, posted a marginal decline of five per cent in sales revenue, reaching 55bn/- down from 58.3bn/- recorded during the second quarter of 2022, according to its financial statement for the second quarter of 2023.

Despite a decline in sales revenue, the company’s gross profit showed an increase of 25 per cent to 14.1bn/- up from 11.2bn/- attained in the equivalent period last year.

The increase in gross profit has been credited to the implementation of cost containment strategies.

However, the financial statement shows interest expense increased by 61.35 per cent from 3.9bn/- in the second quarter of 2022 to 6.3bn/- in the second quarter of 2023.

The cement maker which is a subsidiary of AfriSam (Mauritius) Investment Holdings Limited with production facilities in Pongwe area in Tanga recorded a significant increase in cash generated from trading activities and net cash flows from operations, attributed to improvements in gross margin and EBITDA.

Cash generated from trading activities surged by 438 per cent from 1.7bn/- in June 2022 to 9.0bn/- in June 2023. Net cash flows from operations increased by 558 per cent from 1.4bn/- recorded in June 2022 to 9.0bn/- in June 2023.

This increase was attributed to an improvement in the gross margin and EBITDA of 6 per cent and 63 per cent respectively as a result of management’s adept execution of cost management and cash‑ flow enhancement strategies.

Tanga Cement is optimistic about future prospects for growth due to anticipated increase in cement demand from major infrastructural development projects across the country which include the East African Crude Oil Pipeline Project (EACOP), the standard gauge railway and Dar es Salaam and Tanga Port upgrade.

The Group is optimistic about the positive impact of infrastructure development under government’s Development Vision 2025 and lauds the government’s initiatives to counteract oil price increases and scarcity of major foreign currencies.

The Chairman of the Board of Directors, Patrick Rutabanzibwa said in the statement that the growth outlook is tied to the growth in cement demand in Tanzania’s construction industry and opportunities available in the regional market where Tanzania is a significant player East African construction market.

“The Group is confident with the initiatives that the government has taken to combat the effects of increase in oil prices as well as the impact of the scarcity of major foreign currencies and commits to working together with the government in growing the economy,” said Mr Rutabanzibwa in the statement.

Tanga Cement Company is set to be acquired by Scancem International DA (Scancem), a subsidiary of Heidelberg Cement AG, which owns Twiga Cement, another major cement maker in Tanzania.

Scancem International DA signed an agreement to acquire a 68.33 per cent stake in Tanga Cement Public Limited Company from AfriSam (South Africa) (Pty) Ltd.

However the planned acquisition is subject to continuing legal twists after a tribunal judge nullified Fair Competition Committee (FCC) decision to sanction the merger at a second attempt in February this year.

The FCC approved the Scancem International DA’s acquisition of AfriSam’s Tanga Cement following a second application after the Fair Competition Tribunal (FCT) had blocked the initial application following an appeal by the now deregistered Chalinze Cement and Consumer Advocate Society.

CRDB Kijani Bond

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TMX goes from strength to strength

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DAR ES SALAAM: THE Tanzania Mercantile Exchange (TMX) has facilitated sale of more than 100,000 tonnes of commodities worth over 200bn/- in five years.

TMX is the government institution under the Ministry of Finance established to help farmers, traders, exporters and other various market actors access domestic and global markets and as well obtain a fair price in selling or buying of commodities.

According to the TMX Chief Executive Officer (CEO), Mr Godfrey Malekano from 2019 to 2023, the mercantile has been able to facilitate sale of a total of 135,103.721 tonnes of various commodities worth 287.98bn/-.

Speaking on Thursday in Dar es Salaam during the working session between journalists, editors and TMX coordinated by the Treasury Registrar (TR) office, Mr Malekano mentioned coffee as among the top commodities that were traded.

“Among the commodities that have greatly traded and contributed to TMX sales of more than 100,00 tonnes (worth 287bn/-) in a period of five years included coffee, cocoa, green grammes, sesame seeds, chickpeas and raw cashew nut,” he pointed out.

On top of the achievements, Mr Malekano said there is the need to continue addressing the challenges of quality and quantity of produces to meet the international standards.

Besides that, he underlined the need of adhering to the quality and standards of the produces by investing in the construction of silos, adding that by doing so, the country will increase exportation and address existing challenges of foreign currency.

“If we can well improve our systems and bring the desired results in terms of quality, it will be very easy to do international trade as we now know implementing the African Continental Free Trade Area (ACFTA),” he added.

Elaborating, the CEO noted that mercantile exchanges are relied upon by AfCFTA to be a link between countries in doing business, adding that the institution continues to look at investment areas and places, which require sufficient capacity building to support AfCFTA move.

In a related development, Mr Malekano also highlighted some of the reasons for the establishment of the TMX as including the ruling party CCM election manifesto (2015-2020 and 2020-2025), Agricultural Sector Development Programme Phase II (ASDP II) and the Kilimo Kwanza (Agriculture First) programme.

Mr Malekano said currently the TMX conducts only one type of mercantile ‘the spot exchanges’ which involves direct trading between farmers, traders, exporters and other market actors.

He added that in the future, the institution will jump into another type of mercantile exchanges which is a future option.

Moreover, he said the TMX’s vision is to become the leading and most diverse and dynamic commodity market place in East, Central and Southern Africa.

“TMX intends to provide a modern, efficient, transparent and reliable market platform for commodities to serve the national development goals through state-of-the-art technology and integrity,” he added.

Mr Malekano also commended President Samia Suluhu Hassan for developing the commercial and economic reforms adding that for the institute like TMX to operate it needs strong legal and commercial basics