Press Release

OPEC Fund extends US$10 million loan for poverty alleviation initiative in Tanzania

50/2005 April 21, 2005, Vienna, Austria

The OPEC Fund for International Development today signed a US$10 million loan agreement with the United Republic of Tanzania to help support the activities of the Tanzania Social Action Fund (TASAF), an autonomous government agency charged with implementing small-scale, demand-driven, community development projects among the rural poor.

TASAF’s main goal is to improve basic infrastructure and protect vulnerable groups, such as women, children, unemployed youth, the elderly and the handicapped, who are most affected by the country’s macro economic structural adjustment measures.

Macroeconomic reforms are having an unintended impact on large segments of the population, with poverty reported growing in various areas.

The Fund’s loan will support TASAF’s activities in the Lindi and Mtwara regions of southeastern Tanzania, where a wide range of sub-projects will be carried out in cooperation with local communities. The sub-projects will be highly labor-intensive, generating jobs and incomes for the rural poor. They will focus largely on the rehabilitation of social infrastructure, including schools, health posts, and water supply and sanitation systems, as well as the provision of economic infrastructure, such as crop storage facilities, markets and feeder roads.

A key objective of the project is to promote a spirit of self-help among beneficiary communities by increasing their capacity to identify, prioritize, implement and manage their own sustainable development initiatives. The sense of ownership inspired by this approach will help secure the durability of the various investments.

To date, the OPEC Fund has extended 24 loans, worth over US$161 million to Tanzania. These include loans for commodity imports programs, balance of payments support and projects across a variety of sectors, from energy, industry and transport, to agriculture, health and education. Tanzania has also received debt relief from the Fund and is one of 35 countries to benefit from a grant to cover its subscription to the Common Fund for Commodities.

Today’s agreement was signed in Vienna by H.E. Mr. Simon U. R. Mlay, Ambassador of the United Republic of Tanzania to Belgium, and by Mr. Jamal Nasser Lootah, Chairman of the Governing Board of the OPEC Fund.

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