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  • Closed Compact Report:  Closed Compact Report: Tanzania Compact
  • November 2015

Conditions Precedent

To facilitate and incentivize the desired investment outcomes under the compact, MCC and the government agreed that the following conditions precedent  would be met before disbursing funds needed for the projects identified below.

Key Conditions Precedent
Key Compact Component(s) Major Condition Precedent or Policy Reform Required Rating
Transport Sector Project

Mafia Island Airport Activity

Prior to each disbursement for construction of the airport improvements under the Mafia Island Airport Activity, Tanzania National Roads Authority (TANROADS) shall commit to fund the upgrade of the main road from the airport in Kilindoni to the Marine Park lodges in Chole.

Transport Sector Project

Mainland Trunk Roads Activity

Prior to initial disbursement for the Mainland Trunk Roads Activity, the National Road Safety Policy and Strategy (in form and substance as prepared by the Ministry of Infrastructure Development in May 2007) shall have been adopted by the Government.

Transport Sector Project

Mainland Trunk Roads Activity

MCA-Tanzania shall execute all necessary construction and construction supervision contracts for the applicable trunk road on or before the first anniversary of the entry into force of the compact in order to receive any Disbursement for construction of such trunk road under the Mainland Trunk Roads Activity.

Energy Sector Project

Project-wide

Prior to initial disbursement for the Energy Sector Project, the Tanzania Electric Supply Company Limited (TANESCO) shall submit to the Energy and Water Utilities Regulatory Authority a rate case that recovers full operating costs. It should include at least the sum of cost of sales, operating expenses and debt service.

Energy Sector Project

Zanzibar Interconnector Activity

ZECO to implement tariff revision that recovers full costs by January 1, 2012

In May 2012, the Zanzibari government authorized ZECO to increase electricity tariffs by 85%. Although this is not estimated to be a full cost reflective tariff, MCC recognized it as a move in the right direction. The first tranche of this increase (a 40% increase) was implemented in June 2012, although the remaining increase has yet to be implemented.
Energy Sector Project

Zanzibar Interconnector Activity

Transport Sector Project

Zanzibar Rural Roads and Mainland Trunk Roads Activities

  1. Prior to each disbursement for the Zanzibar Rural Roads Activity covering the quarter beginning on October 1 of each year, the Government of Zanzibar’s expenditures budgeted for road maintenance shall show an increase from such expenditures from the prior fiscal year, taking into account inflation and maintenance needs of existing, improved and newly constructed roads.
  2. Prior to each disbursement for the Zanzibar Rural Roads Activity covering the quarter beginning on January 1 of each year, the amount budgeted by the Ministry of Communication and Transport of the Government of Zanzibar for maintenance of its existing, improved and newly constructed roads for the previous fiscal year has been expended for the intended purpose.