United Republic of Tanzania/Reinsurance for Standard Gauge Railway project

February 17, 2020

Nippon Export and Investment Insurance

Nippon Export and Investment Insurance (NEXI; Chairman and CEO: Atsuo Kuroda) has decided to provide a reinsurance on export credit for a Standard Gauge Railway project in the United Republic of Tanzania (Tanzania), which is undertaken by the EKF Denmark’s Export Credit Agency (EKF), the export credit agency (ECA) of the Kingdom of Denmark (Denmark). This is the first reinsurance project under the agreement between NEXI and the EKF signed on August 20, 20191.

The large infrastructure project, led by the Tanzanian government, renovates and constructs the facilities of a quasi-high-speed railway with the maximum hourly speed of 160 kilometers, including rail tracks, bridges, signaling systems, station buildings and management rooms, divided into five lots. The railroad will stretch 1,219 kilometers, connecting Dar es Salaam on the east coast and Mwanza in the north region. The rail track manufactured by Nippon Steel Corporation has been exported through Mitsui & Co., Ltd. for a use in the two under-construction lots between Dar es Salaam and Morogoro and between Morogoro and Makutupora. Also, four ECAs other than NEXI: the CESCE (Spain), OeKB (Austria), SACE (Italy) and SERV (Switzerland) are collaborating with the EKF on this project, aiming to support the export of their domestically-produced goods by underwriting reinsurance. In addition to the six ECAs, the Swedish Export Credit Agency (EKN and SEK), the African Export-Import Bank (Afreximbank), the Development Bank of Southern Africa (DBSA) and the Eastern and Southern African Trade and Development Bank (TDB) are to participate in financing the project. Standard Chartered Bank has arranged this transaction as Global Coordinator and Bookrunner.

Japan has been committed to expanding business in Africa through public-private cooperation in various approaches such as the 7th Tokyo International Conference on African Development (TICAD 7) held in Yokohama from August 28 to 30, 2019. While the African market seems to have a great potential for Japanese companies to enter into due to its strong demand for infrastructure development, there can be said to be a bigger hurdle in financing compared with when they tap into the Asian market. In these situations, this project is one of the achievements where NEXI's efforts to strengthen ties with its counterparts towards facilitating the setting up projects have been realized. An effective use of the One-Stop-Shop reinsurance scheme based on the reinsurance agreement with the EKF, which is recently strengthening financing mid- and long-term projects in Africa, will continue to enable NEXI to encourage industrial cooperation between Japan and Denmark in various fields in the African region.

Furthermore, the Partnership on Sustainable Connectivity and Quality Infrastructure between Japan and the European Union was signed by the Japanese Prime Minister Shinzo Abe and the European Commission President Jean-Claude Juncker, in the first Europa Connectivity Forum in Brussels, Belgium on September 27, 2019. As the document underscores the strategic importance of the Japan-EU partnership that both parties have aimed to strengthen, its conclusion ensures the increasing significance of the cooperation between Japan and Europe. In these circumstances, this project plays an iconic role as an initiative where Japanese and European ECAs work together in the form of reinsurance with a common purpose of realizing joint projects. It also matches the “Partnership for Quality Infrastructure,” one of the visions of the Japanese government, in that the export of Japanese high quality rail tracks will make a contribution.

As Japan’s policy-based financial institution, NEXI continues to actively support Japanese companies expand their businesses globally by promoting cooperation with third countries through reinsurance.

Contact: Infrastructure Group, Structured and Trade Finance Insurance Department
Tel: +81-(0)3-3512-7674

1 Please refer to the press release issued on August 23, 2019.