ATI Chief Executive Officer Mr George Otieno said in Dar es Salaam yesterday that the insurance firm's objective is to support Tanzania by bringing in much needed investments and lowering the borrowing costs.

 

"We are the silent but very important piece of the puzzle because we have stood behind close to 1.0 billion US dollars (2tri/-) worth of investments and trade into Tanzania since our first transaction in 2004," he said.

 

He said Tanzania can benefit more from its partnership with ATI by simply recommitting its pledge to support ATI-backed projects in the country. Under the terms of the partnership, he said Tanzania is able to substitute its subinvestment grade rating for ATI's investment grade 'A' rating once it signs onto any ATI supported transaction.

 

Under the Basel regulations, which govern most international banks, they can only lend to countries such as Tanzania with the insurance support of an institution like ATI, respected and trusted by the international financial markets.

 

He said ATI's insurance cover enables banks to lower their risk margins, which often substantially reduces the cost of borrowing for Tanzania and other African member countries. By not fully maximising this opportunity, Tanzania may be missing out on millions worth of investments. ATI's Underwriting Representative in Tanzania, Ms Tusekile Kibonde said, "ATI can help the country become more bankable and attract more investments.

 

This is particularly crucial in the energy sector where there are currently enormous challenges," ATI supported a Norwegian company contracted by the government to set-up a power station as well as a 62 million US dollars (132bn/-) bridge financing facility set up by a syndication of banks for the state utility company. With ATI's support on such projects, Tanzania has been able to bring an additional 400MW of electricity to the national grid.

 

Tanzania is a founding member of ATI, which was set up to provide insurance to investors and others doing business in its African member countries. Under the partnership, Tanzania and other countries agreed to grant Preferred Creditor Status to all projects backed by ATI.

 

This pledge, which provides reassurance that a member country will prevent any claims on ATI-backed projects, gives investors, suppliers and others the necessary comfort to launch projects in Tanzania.

Source : allafrica.com