UK underwrites £373 million of financing for Zanzibar road upgrades
By Neil Gerrard14 July 2023
The United Kingdom’s (UK) credit agency, UK Export Finance (UKEF), has underwritten £373 million (€422 million) of financing for upgrades to Zanzibar’s road network and to Pemba Airport.
UK Export Finance said it expected UK suppliers to win over £100 million (€117 million) worth of contracts as a result of the deal.
The infrastructure upgrades are set to boost Zanzibar’s island economy, which draws around a quarter of its annual GDP from tourism.
Improvements at Pemba Airport will transform the domestic facility into a hub for international flights, which currently can only land on Unguja.
The works are expected involve extending the runway, adding new terminal buildings, and introducing other new infrastructure including a control tower.
The road upgrades across Unguja and Pemba – the archipelago’s two largest islands – will expand three major roads to four lanes each while fitting them with street lighting and additional paving.
UKEF worked with Citi to unlock £154 million (€180 million) in loans for the airport upgrade and with Deutsche Bank to enable £207 million (€242 million) in loans for the road improvements. These projects will be completed through strategic joint ventures, with Propav Infraestructuras leading and collaborating with Mecco Ltd.
Cristiano Becker Hees, financial structuring and institutional relations director of Propav Infraestructuras, said, “The expansion of Pemba Airport will create an international gateway, generating local employment and boosting regional trade.
“Simultaneously, the construction of 103km of roads in Zanzibar will enhance mobility and connectivity, driving economic growth.”