A NEW boost to the Standard Gauge Railway construction after the contractor Yapi Merkezi, secured a US$95 million (about 209bn/-) innovative bank surety from Marsh, a global insurance company.
The Marsh, a leading company in insurance broking and risk management solutions, provided the insurance for supporting the construction of a new high-speed electric railway line in Tanzania.
This insurance now allows the Yap Merkezi, as the ultimate corporate beneficiary, to secure loans from Turkish and local banks to enable it implement the project.
To help enable Yapı Merkezi to comply with project requirements to use local Tanzanian banks, Marsh's Global Bank Surety Syndication team, headed by Manuel López, structured an innovative solution that guarantees Yapı Merkezi's contractual performance- related obligations and the repayment of advance payments.
The solution was structured in collaboration with the African Trade Insurance Agency (ATI), a multilateral pan-African investment insurer and is backed by ATI's treaty reinsurers and a consortium of facultative reinsurers Trust Re (lead facultative reinsurer). In this juncture, ATI supported CRDB Bank Plc and NMB Bank Plc, to issue guarantees for this infrastructure project.
Yapı Merkezi was awarded the contract to design and build the new US$1.25 billion, 300km (including 95km sidings/passing loops), highspeed electric railway line by Tanzanian state-run railway firm RAHCO: Reli Assets Holding Company (currently TRC: Tanzania Railways Corporation).
The line from Dar es Salaam to Morogoro will replace the centuryold track and will have the capacity to transport 17 million tonnes of cargo each year. ATI has mobilized investments well in excess of US$1 billion into Tanzania in recent years.
Marsh was instrumental in helping us close this deal, thus supporting additional investments into the country and ultimately delivering critical new infrastructure to the people of Tanzania," said Tusekile Kibonde, the resident Underwriter.