Zanzibar has secured $459.7 in new infrastructure financing from the UK to address infrastructure development.
The crucial facility is from UK Export Finance (UKEF) and the UK government’s export credit agency.
This is the second such financing arrangement between UKEF and Zanzibar which is set to boost the island’s economy that draws around a quarter of its annual GDP from tourism.
The support will see UK exporters winning supply contracts equivalent to more than $127.5 million for these transformational infrastructure projects such as 103 km of Zanzibar’s road network, which will support connectivity and prosperity across Pemba and Unguja islands.
“Good local infrastructure is key to encouraging businesses to invest and work with local suppliers. This deal will support crucial development across Zanzibar, unlock new opportunities for UK companies in Africa, and grow sectors that will create jobs and boost the economy across our nations,” said Nigel Huddleston, UK’s Minister for International Trade.
In addition, the upgrades will enable the government to improve Pemba Airport, the smaller of two airports on the Zanzibar archipelago.
“I could not be more proud of this partnership. Developing countries need access to affordable infrastructure financing from reliable partners and that is exactly what this initiative will deliver.
It underscores the UK government’s commitment to working in partnership with Tanzania to support inclusive, sustainable economic development, including on the islands of Zanzibar,” said David Concar, British High Commissioner to Tanzania
Construction of the airport will take place in two phases, with the first phase involving redesigning of the terminal building and extending the runway.
Pemba Airport currently serves only 45,000 passengers annually, whereas the number of tourists visiting the island exceeds 110,000 annually, and upon completion it will accommodate 750,000 passengers per year.
Infrastructure Financing in Zanzibar
The new financing comes on the backdrop of another agreement on June 20, 2023 with similar donors through Citibank London and Deutsche Bank London.
With this Zanzibar secured $428 million towards expansion of Pemba Airport and construction of various road networks in Unguja and Pemba.
And in January this year as well as September 2022, Zanzibar government approved and signed the commercial contracts with the contractors.
Moreover, UKEF’s backing commitment means that these major projects are set to create over 127.5 million dollars in export opportunities for UK companies.
This is a significant achievement in the context of UK exports to the whole of Tanzania, which hit $350.4 million in 2022.
The infrastructure development will boost the UK’s construction sector in particular, supporting this government’s priority of growing the economy.