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China – ‘Satellite City’ Included In Investment Deals With Tanzania.

3 November, 2014

 

Legal News & Analysis – Asia Pacific – China – International Trade

 

Investment deals worth more than USD 1.7bn have been signed between Tanzania and China, including plans to build a satellite city to ease congestion in Tanzania’s commercial capital Dar es Salaam.

 

The deals were signed in Beijing during a state visit by Tanzania’s president Jakaya Kikwete, Reuters reported.

 

Kikwete said the deals covered the development of infrastructure, power distribution and business cooperation between the two countries.

 

The satellite city, on the outskirts of Dar es Salaam, “will be a self-contained urban zone equipped with water, electricity, roads, banks, schools and hospitals”, Reuters said. “The project, as well as a USD 500m financial centre that will also be built in Dar es Salaam, are joint projects by the China Railway Jianchang Engineering Company Ltd and Tanzania’s state-run National Housing Corporation.”

 

According to Reuters, Tanzania also announced USD 85m in grants and zero-interest loans from China although did not specify what the funds would be used for.

 

In addition, Tanzania’s state-run power company Tanesco reportedly signed a deal with China’s TBEA Hengyang Transformer Co for “a rural electrification project”.

 

During Kikwete’s visit to Beijing, Chinese premier Li Keqiang called for the countries’ national airlines to “set up joint ventures and strengthen regional aviation cooperation”, China’s state-run Xinhua news agency said.

 

According to the China Business Network (CBN), China’s total direct investment in Tanzania soared from USD 700m in 2011 to USD 2.1bn in 2012, with investments focused on railways, ports, buildings, road construction, gas pipelines and wind power farms. CBN said the figures, from Imara Equity Research, showed China was Tanzania’s “biggest foreign investor”.

 

CBN said some Tanzanian projects had been supported by the Export-Import Bank of China at an investment value of around USD 10bn. One of the projects involved construction of a port at Bagamoyo, northwest of Dar es Salaam, CBN said.

 

The ‘World Investment Report 2013’, published by the UN Conference on Trade and Development (UNCTAD), said Chinese foreign direct investment (FDI) stock in Africa at the end of 2011 stood at USD 16bn. South Africa was the leading recipient of Chinese FDI, according to UNCTAD.

 

References:

 

Please click the link below for more information.

 

World Investment Report 2013 (264-page / 2.18MB PDF)

 

Pinsent Masons

 

For further information, please contact:

 

Richard Laudy, Partner, Pinsent Masons

[email protected]

 

Nick Ogden, Partner, Pinsent Masons

[email protected]

 

Homegrown International Trade Law Firms in China

 

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