TANZANIA AIRPORTS AUTHORITY TAKING CIVIL AVIATION INDUSTRY IN TANZANIA TO THE APEX 1st National Civil Aviation Forum, 2017 Financing Options for Airport Infrastructure Development Salim R. Msangi DG TAA

1.0 BACKGROUND Air transport is a crucial development driver bringing both economic development and social benefits, including regional integration. It has major rippling effects on job creation as well as trade and tourism etc.

BACKGROUND…….…… Financing Airports Development Throughout the World, Airports are being developed and upgraded to become airport cities with modern and sophisticated facilities. Various sources of funds: Airport surplus (retained earnings) Government grants-in-aid Borrowed funds Third-party development Private Sector Participation

BACKGROUND………… Global Trend of Airport Competition World and Regional air transport is growing. Competition between Airport Operators is getting stiff. In East & South African Region, countries are competing in provision of quality services and facilities to aviation customers (e.g Nairobi, Kigali, Addis, JNB, Zambia).

Source: (ACI: World Airport Traffic Database, 2016) BACKGROUND………… Global Passengers traffic grew by 6.4% in 2015 reaching 7.2 billion. Africa Region Passengers traffic grew by 0.6% in 2015 reaching 179.76 million. Tanzania Passengers traffic declined by 1.1% in 2015 reaching 5.2 million. JNB(4.8%), CAI(7.9%), CPT(8.8%), ADD(11.7%), LOS(-8.9%), NBO(1.5%), JNIA(0.7%). Source: (ACI: World Airport Traffic Database, 2016)

BACKGROUND………… Likewise, Tanzania is not an island, we have been striving to develop our Airports infrastructure( slow pace) to be competitive in the region.

BACKGROUND……. Given a mandate to Develop Airports Infrastructure including facilities. To operate, manage and maintain. Aiming to make the Aviation Industry competitive within the region and beyond.

BACKGROUND…….…… We have been working through our Vision and Mission. To provide high quality airport services and facilities to become a world class airport operator.

Government Budget Loans Grants 2.0 EFFORTS MADE BY THE GOV For the past 18 years, TAA through Government support has improved and developed Airports infrastructure and facilities through the following financing arrangement: Government Budget Loans Grants

EFFORTS MADE……………….. Completed Projects: 1. JNIA: Rehabilitation and Upgrading of airside pavements and Facilities. Financier: GOV & ORIO 2. Mpanda: Upgrading of airside pavements and Facilities Financier: GOV & UNHCR 3. Arusha – Resurfacing of Runway, Taxiway & Apron. Financier: GOV

5. Kigoma: Upgrading of runway. EFFORTS MADE……………….. 4. Tabora: Upgrading of runways, taxiway and Apron. Financier: GOV & WB 5. Kigoma: Upgrading of runway.

EFFORTS MADE……………….. 6. Mafia: Upgrading of runway, taxiway and apron Financier: GOV & MCC 7.Bukoba:Upgrading of runway, taxiway, Apron and Construction of terminal building. Financier: GOV & WB

Ongoing Airports Projects EFFORTS MADE……….. Ongoing Airports Projects 1. Construction of Songwe Airport Financier: GOV, BADEA & OFID 2. Mwanza Airport 3. Construction of TB III at JNIA Financier: GOV 4. Upgrading of KIA: Financier: GOV& ORIO

Upcoming Airports Projects EFFORTS MADE……………….. Upcoming Airports Projects 1. Upgrading of Shinyanga Airport Financier: GOV& EIB 2. Upgrading of Sumbawanga Airport 3. Construction of TB at Tabora Airport

Projects in Appraisal Stage EFFORTS MADE……………….. Projects in Appraisal Stage Completed FS and DED: Arusha Msalato Mtwara Tanga, Iringa, Kilwa-Masoko, Lake Manyara, Moshi, Musoma, Lindi, Njombe, Songea, Singida, Bariadi (Simiyu region) Financier: GOV & WB

3.0 OUTCOME. Efforts made in airport infrastructure development for the past 18 years have shown positive growth in terms of : Aircraft Movements, Passenger, Cargo, Revenue.

OUTCOME……… 136%

OUTCOME…….

4.0 FUTURE PLANS Airports today have become an integral part of the global economy. Not only moving passengers and Cargo from country to country and continent to continent but Airports cities. Aviation contributes about $2.7 trillion of the Global GDP.(https://aviationbenefits.org/economic-growth/value-to-the-economy/

FUTURE PLANS…. Continue Upgrading and Rehabilitating Airports Infrastructure. Modernization of Airport facilities. Enhancing Investments projects in non aeronautical Revenue. Involvement of Private Sector

FUTURE PLANS… Developing JNIA as main hub of Tanzania. Support National Carrier as it increases its operations. Develop feeder airports (Mwanza, Songwe, Kigoma, KIA, Mtwara) to support the main hub.

Government funding Grants and Loans PPP 5.0 FINANCING APPROACHES Financing of airports infrastructure; Government funding Grants and Loans PPP

FINANCING…… GOV funding is insufficient Gov budgets takes long time As we All know: GOV funding is insufficient Gov budgets takes long time TAA needs quick investments Need to venture adversely in other financing structures such as involving Private Sector.

6.0 FINANCING THROUGH PPP The Government conducted a study on PPP appetite in the development of 11 Airports Infrastructure:

FINANCING THROUGH PPP…… . Findings from the study on PPP Involvement as individual transaction High Attractiveness for PPP JNIA and KIA Low Attractiveness to PPP Arusha, Mwanza, Lake Manyara, Kigoma, Mafia and Songwe Not Attractive for PPP Mtwara, Tabora and Msalato

FINANCING THROUGH PPP…… Another Approach suggested is to create groups-Mixing Most viable airports with the non viable .

Grouping by implementing BLOT PPP Model: FINANCING THROUGH PPP…… Grouping by implementing BLOT PPP Model: Group A: KIA, Mwanza, Lake Manyara and Songwe airports Group B: JNIA, Arusha, Kigoma and Mafia airports Group C: Mtwara, Tabora and Msalato airports

Involvement of Private sector is the way to go. TAA be Full Autonomous 7.0 CONCLUSION Involvement of Private sector is the way to go. TAA be Full Autonomous

Thank You For Listening