Building bonanza signed and sealed

Tanzanian infrastructure will be greatly improved after major deals in guangzhou

Tanzania has had a multi-million dollar investment windfall with the signing of deals with Chinese companies that will deliver infrastructure to the country in areas including, energy, housing mineral resources and power supply.

The seven agreements and memorandums of understanding were sealed in Guangzhou on Oct 24.

The signing ceremonies were witnessed by Mizengo Pinda, the Prime Minister of the United Republic of Tanzania, and Lu Youqing, the Chinese ambassador to Tanzania, at the first Tanzania-China Business Forum in the capital of Guangdong province.

The forum was jointly organized by the Tanzania Investment Centre and the China Africa Business Council. Officials from Chinese and Tanzanian enterprises and business executives at the one-day forum also discussed investment and trade.

Pinda praised the role played by the Tanzania-China Business Forum in helping to improve economic ties between the countries.

Pinda, who led a big trade delegation, arrived in Guangzhou after attending the 14th Western China International Fair in Beijing, where he also met Chinese Premier Li Keqiang to discuss the expansion of economic ties.

Pinda's delegation comprised ministers, regional commissioners, members of parliament, executives from private sector institutions, officials from the Tanzania Investment Center and other senior government officials and businesspeople.

"Chinese people will continue to provide assistance to Tanzania as capacity allows, and also we hope the Tanzanian side will provide the necessary support for the Chinese enterprises involved in development there," Li told Pinda.

Noting that next year China and Tanzania will mark the 50th anniversary of their diplomatic ties, Li said China will cooperate with Tanzania on major projects.

According to Pinda, his government is also in talks with China Merchant Holdings International about the construction of Bagamoyo Port, which will turn Tanzania into an international trade hub for East and Central Africa.

"With China and Tanzania about to mark the golden jubilee of their close relations, it is a good time to take our investment partnerships to a higher level," Pinda said.

He urged his Tanzanian delegates to capitalize on the investment opportunities at the forum, and added that he was keen to hear the views of Chinese investors regarding the Tanzanian business environment.

Pinda said Tanzania is a peaceful and politically stable country, and these are critical assets for investors. He also said the Tanzanian government will fully support every investment initiative.

"Private investments in Tanzania are guaranteed by government policy and law against nationalization and expropriation. Investors can repatriate their profits and dividends without hindrance," Pinda said.

"I encourage Chinese companies to utilize the opportunities here and turn them into profitable ventures in a way that will bring about sustainable benefits to the Tanzanian economy and the local communities."

Pinda also urged Tanzanian companies to use their visit to China to gain market knowledge and experience and to develop partnerships with Chinese companies and their international partners, thereby connecting themselves to the global economy.

Many Chinese companies regard Africa as a prime destination for their overseas investments and trade.

Xu Zhiming, chairman of Zhejiang-based China Yuemei Group, said his company is enjoying 10 percent annual growth in profits in Africa.

Xu said his group, a private transnational company mainly in the textiles and dye industries, plans to set up more companies and joint ventures in Africa.

Xu is also vice-chairman of the China Africa Business Council, which has more than 500 member companies. The council was established in 2006.

Xu said his group plans to invest about $150 million to restructure the Tanzania-China Friendship Textile Co Ltd to import new technology and equipment to help build it into the largest modern textile company in Africa.

The company is expected to form a complete industrial chain for cotton purchasing, processing, spinning, weaving and dyeing, Xu said.

Also, Xu said his group plans to invest about $500 million in the construction of an industrial and trade park in Tanzania, which would serve as a platform for Chinese companies investing in Africa and create more job opportunities and revenue for Tanzanians.

Xu said his group, which started investing in Africa in 2000, has now set up 16 companies there, including three in Tanzania, with a total investment of more than $370 million.

"The investment in Africa accounts for about 30 percent of my group's total assets," he said.

"Despite the poor technological conditions and low work efficiency, the vast market on the African continent, cheap labor and abundant natural resources are the major attractions for Chinese companies, particularly labor-intensive enterprises," Xu said.

"And manufacturing, mineral exploitation, finance, machinery, infrastructure, trade, textiles and dyeing are the main industries that attract Chinese companies and investors."

Xu said the Tanzania-China Business Forum will play an active role in promoting Sino-Africa investment and trade.

Among the major deals signed at the at the first Tanzania-China Business Forum in Gunagzhou were:

Shanghai Electric Power Company and Tanzania Electric Supply Co Ltd will invest about $400 million to construct the third phase of Kinyerezi Power Project in Tanzania.

China Gezhouba Group Corporation signed an memorandum of understanding with a Tanzania company to jointly build Tanzania's Rumakali Hydropower Project.

Sino Hydro Resources Limited and Mkonge Energy Systems Co Ltd signed an agreement with Tanzania Electric Supply to jointly construct the Masigira Hydropower Project in the East African nation. Construction of the project will cost $136 million.

China Railway Jianchang Engineering Co Ltd and the National Housing Corporation of Tanzania signed an agreement to finance some NHC-selected projects valued at more than $500 million. Poly Technologies Inc Ltd signed an agreement with NHC to invest $200 million in housing projects in Tanzania.

China Dalian International Economic and Technical Co-operation Group Ltd, Hydro-China Kunming Engineering Corporation and Tanzania's National Development Corporation agreed to establish a $136-million center of excellence on renewable energy in Tanzania to support the Singida Wind Power Project there.

China's Tebiau Electric Apparatus Stock Co Ltd and the Tanzania Electric Supply Co Ltd agreed to construct a 400kV transmission line from Dar es Salaam to Arusha. Construction of the project will cost $693 million.

zhengcaixiong@chinadaily.com.cn

Above: Shanghai Electric Power Company and Tanzania Electric Supply Co. Ltd sign a deal for a power project in Tanzania. Below: Signing ceremonies were witnessed by Tanzanian Prime Minister Mizengo Pinda (second from left), and Lu Youqing, the Chinese ambassador to Tanzania (third from left). Zou Zhongpin / China Daily

(China Daily Africa Weekly 11/01/2013 page20)