Celebrating 50 Years of Tanzania in Nordic Countries

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Björn Blomberg, Managing Director, Swedfund

25 years of investing in the Tanzanian private sector

Swedfund in short

• State owned investment company

• Responsible and long-term investor in private sector

• Minority stakes in companies with strategic partners who are willing and able to take the lead

• 36 employees at the head office in Stockholm and 2 employees in regional office in Nairobi, Kenya

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Instruments

Focus on equity and equity related such as subordinated loans

Our investment

MSEK10-100

Number of investments

230 since the start in 1979

Present portfolio

93 investments in 46 countries

Capital

SEK 2,7 bn invested capital

ESG

Ethical and environmental aspects important when we invest

Short info

Contribute to the development of sound and profitable businesses, ensuring positive and sustainable economic development in the countries where we invest.

Celebrating 50 Years of Tanzania in Nordic Countries

Business model

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GeographyAfrica, Asia, Latin America and Eastern Europe (non-EU)

Instrument Focus on equity and equity related such as subordinated loans

Our investment MSEK 10 – 100 per investment

ShareAlways minority, usually 25 to 35 % of total investment amount

Risk exposure Equal or lower than co-investor/partner

Board representationYes (equity investments)

Investment horizon 5 – 10 years

Swedfund’s investment criteria

Portfolio company

Swedfund

Industrial partner

Financial partner

Celebrating 50 Years of Tanzania in Nordic Countries

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Direct investments (share capital and loans)

Indirect investments (funds)

Direct and indirect investments

Stockholm

Nairobi

Africa49%

Asia29%

Latin Amer-ica4%

Eastern Europe

17%

Portfolio per region

Funds23 %*

Share capital43%*

Loans34 %*

Portfolio per instrument

As per 31 Dec 2010

*Value of the investments

Celebrating 50 Years of Tanzania in Nordic Countries

Road fatalities per 100 000 inhabitants per year:

• Tanzania 34,3

• Sweden 2,9

• France 6,9

• South Africa 33,2

”The Real Risk”

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Celebrating 50 Years of Tanzania in Nordic Countries

1 Electricity supply

2 Financing

3 Recruting local management

Problems for business Other problems

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Celebrating 50 Years of Tanzania in Nordic Countries

• Corruption - It takes two to tango, but perceived impunity is a problem

• Law and Legal Process - low and inefficient workings of the understaffed courts

• Tax Administration Business - still carried out on a cash basis = tax evasion. Those complying with the law become only targets of TRA collectors

• Port Congestion - causes delays, misunderstandings and mistakes

Growth

• From 2000 - 2010, no fewer than six of the world’s ten fastest-growing economies were in sub-Saharan Africa. (Angola, Nigeria, Ethiopia, Chad, Mozambique and Rwanda)

• All with annual growth rates of around 8% or more!

• The only BRIC country to make the list was China

• Over the past decade sub-Saharan real GDP growth rate jumped to an annual average of 5,7%

• On IMF forecasts Africa will grab seven of the top ten places over the next five years. (Ethiopia, Mozambique, Tanzania, Congo, Ghana, Zambia and Nigeria)

• Looking even further ahead, Standard Chartered forecasts Africa’s economy will grow at an average annual rate of 7% in the next 20 years, faster than China’s

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Celebrating 50 Years of Tanzania in Nordic Countries

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Celebrating 50 Years of Tanzania in Nordic Countries

Invest in a safe and profitable place -

Invest in Tanzania!

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Celebrating 50 Years of Tanzania in Nordic Countries

Our regional investments & investments in Tanzania

Present

Previous

Present Company Business Previous Company Business

Tanzania TOL Gases Industrial Gases Tanzania Fedha Fund Fund

Afrika EFP DFI Co-Financing Facility Tanzania TVCF Fund

Afrika EFP IV DFI Co-Financing Facility

Tanzania Zain Telecom

Afrika Raffia Bags Ltd Packaging Products Tanzania PEMACCO/BEVI Electrical engine

Afrika AIG/African Infrastructure Fund

Fund Tanzania Atomac Precision tools

Afrika AfriCap Microfinance Investment Company Ltd

Microfinance Fund Tanzania Tanscan Sawmill

Afrika AMSCO Employment Agency Tanzania Tanzania Portland Cement Vo. Ltd.

Cement

Afrika ICCF - Interact Climate Change Facility

DFI Co-Financing Facility Tanzania Litech Ltd. Woodwork

Afrika ECP Africa Fund II Fund Tanzania DAHACO Ground handling

Afrika ECP Africa Fund III Fund

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Celebrating 50 Years of Tanzania in Nordic Countries

CaseTanzania Portland Cement Company (TPCC)

TPCC produces cement and clinker and helps meet local demands. It was founded by the TZ GvT in 1959, but experienced big losses. In 1992, Swedfund and Scancem provided capital, expertise and staff received significant training. In 1997 TPCC became profitable and is today recognised as one of the most successful companies in TZ. It is understood to indirectly support around 90,000 jobs.

Sector: Infrastructure

Year of investment: 1992

Year of exit: 2005

Swedfund’s investment: MUSD 3,3

Swedfund’s share: 19% of share capital

Industrial partner: Scancem International

Facts

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Celebrating 50 Years of Tanzania in Nordic Countries

CaseDar es Salaam Airports Handling Company (Dahaco)

SF, SAS and Danish IFU joined the Air Tanzania Co. in a JV. Dahaco was a great success from the beginning with good profitability and extensive transfer of knowledge within all job types – including through a SIDA financed training programme. The Dar es Salaam airport was several times selected as best airport in Africa.

Sector: Infrastructure

Year of investment: 1985

Year of exit: 2000

Swedfund’s share: 10% of share capital

Industrial partner: SAS

Facts

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Celebrating 50 Years of Tanzania in Nordic Countries

CasePemacco-Bevi (PB)

PB repaired and serviced electrical motors across TZ. Before PB companies in TZ had to get repairs overseas – almost impossible because of the lack of foreign currency. SF became JV partners with Pioneer Electrical Machines & Consultancy Co. and Bevi Blomstermåla. SF provided capital, business planning and foreign experience. 60 jobs were created and the business is now run by Radi.

Sector: Manufacturing

Year of investment: 1986

Year of exit: 1997

Swedfund’s share: 14% of share capital

Industrial partner: Bevi Blomstermåla

Facts

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Celebrating 50 Years of Tanzania in Nordic Countries

CaseTANSCAN

Established as TWICO in 1979 by the TZ Gvt. It received support from SIDA and later became a JV under the name of TANSCAN with SF and Swedish technical partner Lindsaw. TANSCAN harvested, replanted, sawed and sold soft wood, which was in great demand in the local market. TANSCAN was bought out by the management and in 2004 employeed around 50 staff.

Sector: Agribusiness

Year of investment: 1986

Year of exit: 2004

Swedfund’s share: 17% of share capital

Industrial partner: Lindsaw

Facts

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Celebrating 50 Years of Tanzania in Nordic Countries

CaseArusha Tolls & Die Maker Co. (ATOMAC)ATOMAC was a high precision tool manufacturer in Arusha. Established in 1987 as a JV between the TZ co. Northern Electrical Manufacturers (NEM), SF and Finnveden. SIDA provided financing and SF provided a loan and ensured appropriate company management. ATOMAC provided jobs and productst previously unavailable in TZ. It ended in bankruptcy in 2000 and SF lost its investment.

Sector: Manufacturing

Year of investment: 1987

Year of exit: n/a

Swedfund’s share: 20% of share capital

Industrial partner: NEM

Facts

Celebrating 50 Years of Tanzania in Nordic Countries

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Swedfund International AB

Sveavägen 24-26, Box 3286

103 65 Stockholm

Tel: 08-725 94 00 Fax: 08-20 30 93

Thank you!