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‘Satellite city’ for Tanzania included in investment deals with China

Investment deals worth more than $1.7 billion 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 $500 million 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 $85 million 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 $700 million in 2011 to $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 $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) (264-page / 2.18MB PDF), said Chinese foreign direct investment (FDI) stock in Africa at the end of 2011 stood at $16bn. South Africa was the leading recipient of Chinese FDI, according to UNCTAD.

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