GuarantCo provides USD 50 million TZS equivalent portfolio guarantee to CRDB Bank to support the bank’s focus on infrastructure in Tanzania
First GuarantCo transaction in Tanzania
GuarantCo, a Private Infrastructure Development Group (PIDG) company, has provided CRDB Bank, the largest bank in Tanzania, with a USD 50 million TZS equivalent, 5-year portfolio guarantee to enable the bank to grow its infrastructure loan book.
Infrastructure development is undoubtedly critical and a priority for Tanzania’s long-term economic growth and competitiveness as it impacts economic activities by increasing productivity, facilitating trade and promoting innovation. The sector also provides the foundation upon which other sectors such as agriculture, manufacturing and services can grow. Mobilisation of non-traditional sources of finance, including those from the private sector, are necessary in Tanzania which has a population of 54 million people.
CRDB Bank is a leading bank with a focus on the infrastructure sector. The portfolio guarantee, as provided by GuarantCo, will create a risk-sharing partnership which will allow the bank to invest more in Tanzania’s infrastructure sector without breaching regulatory and capital limits set by the Bank of Tanzania. GuarantCo’s involvement does not stop with this transaction. It will also enable CRDB Bank to grow its loan portfolio and signify the beginning of a capacity building partnership whilst providing an opportunity to support the bank’s gender strategy.
PIDG Technical Assistance will be supporting a project finance capacity building workshop for financial institutions in Tanzania, together with CRDB Bank, aimed at building the capacity of local developers and financiers to create and deliver more infrastructure projects.
Lasitha Perera, CEO at GuarantCo said: “We are delighted to have built this important strategic partnership with CRDB and work with them to explore further innovative transaction structures to finance infrastructure projects in Tanzania in the longer term. This guarantee by GuarantCo reflects our ongoing commitment to enabling local financial institutions to deliver more essential infrastructure to improve the lives of those living in lower income countries.”
Abdulmajid Nsekela, Group CEO and Managing Director at CRDB Bank Plc said: “Our partnership with GuarantCo demonstrates our long-standing commitment to support economic growth and, will go a long way in improving the economic prospects of Tanzania. Our focus is to create an enabling environment for investment by pursuing mutual partnerships to mobilize the finances required for growth. We remain steadfast in supporting infrastructure development in Tanzania to support government initiatives to build a middle income semi industrialized economy whereby infrastructure is the key enabler.”
GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through PIDG, and the Netherlands, through FMO and PIDG. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.baymoonstudio.co.za/gcod
The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 157 infrastructure projects to financial close and provided 209 million people with access to new or improved infrastructure. PIDG is funded by six governments (the UK, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC. www.pidg.org
About CRDB Bank
CRDB Bank Plc is an innovative, publicly-listed commercial bank headquartered in Dar es Salaam Tanzania. We operate two main subsidiaries, CRDB Bank Burundi – a wholly owned affiliate based in Bujumbura in the Republic of Burundi and CRDB Insurance Brokers Limited – a leading insurance brokerage service provider operating in Tanzania. We are one of the East Africa’s leading banks, serving individuals, micro, small & middle businesses and large corporations with a full range of Retail, Treasury, Insurance, Trade Finance, Syndications, Premier Banking, Agriculture and Microfinance services.
CRDB Bank is the first bank in Tanzania to be rated amongst the top ten stable and safer to invest African banks by the world’s most respected rating agency, Moody`s Investors Services. Moody`s rated CRDB Bank with a “B1 stable outlook” which is the highest rating to have been acquired by banks or financial institutions in Sub Saharan Africa. We are listed on the Dar Es Salaam Stock Exchange (DSE). In 2019, CRDB Bank Group became the first commercial bank in East and Central Africa to be accredited by the United Nations Green Climate Fund (GCF) as a financial intermediary for Green Financing in Tanzania. www.crdbbank.co.tz