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| Architectural impression of Ushirika Tower |
The Unit Trust of Tanzania (UTT) has managed to engineer the funding
for construction of 25bn/- Ushirika Tower on the sideline of the Dar es Salaam
Central Business District.
UTT arranged the funding through a zero-coupon bond with maturity of 10
years at an interest rate of 30 per cent.
The bond, unlike its peers does not make periodic payments until the
maturity date, when the holder gets principal amount plus interest.
The UTT, the project finance manager for Tanzania Federation of
Cooperatives (TFC), sold for the first time the zero-coupon corporate bond in
the market to Exim Bank, NIC bank and itself.
UTT's Chief Executive Officer Dr
Hamis Kibola said the bond raised enough
funds to warrant the construction of 20-storey structure and renovating the
existing 12-floor building.
"They (TFC) approached us seeking financial help and we designed the
zero-coupon bond and we sold the idea to other financial intermediation,"
Dr Kibola told the 'Daily News'.
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| Dr Kibola |
The CEO added: "We are happy the deal
paid off, as the lender will have no problem on paying interest rate which is
due after 10 years when the bond matures."
The bond tenure is ten years which is enough period for the TFC to
start receiving revenue from rent of the offices, restaurants, parkings, shops
spaces and other related activities.
According to the TFC Chairman, Mr Hassan
Wakasuvi, the project will be under the supervision of UTT until the last debt
is paid to the financiers. Exim invested 12bn/-, UTT 10bn/- and NIC 3bn/-.
"The building will be ready to receive tenants later this year
...the loan will be paid from revenue to be raised through rent," Mr
Wakasuvi told the invitees during the soft laying of the foundation stone by
President Jakaya Kikwete on Tuesday.
The China Civil Engineering Construction Corporation (CCECC), Project
Manager, Mr Ke Changliang, said they have completed the hardest part of laying
the foundation and basement which is 20 per cent of the construction period.
"Constructing 20 floors will be completed at the end of this year
and finishing will commence early next year," Mr Ke told the 'Daily News',
"actually we are ahead of the deadline."
The project manager said each floor will have
800 square metres of office space, shops and restaurants plus 2400 square
metres for car parking, enough for over 70 cars per floor.
The CCECC established its office in Tanzania in 1981, five years after it completed
construction of Tanzania and Zambia Railway (TAZARA) in 1976 and made it its
headquarters.
The Cons Africa's Architect, Mr Henry Mwoleka, said the challenge
on designing the state-of-the-art building was to blend the CBD features and
emerging Kariakoo trading rhythms, while adhering to city master plan.
"Due to power problems and high bills, solar energy will be used
for security lights, especially at the parking lot," Mr Mwoleka said.
"We have considered using wind to save extensive use of electricity for
air conditioning." The Architect said the building also was designed to
withstand earthquake shocks as Dar es Salaam seats at a moderate seismic
region.
The 12-floor old structure of Ushirika Building was inaugurated in 1966
by the first president of Tanzania and the Father of Nation, Julius
Nyerere. Its construction took two
years.
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza
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