NATIONAL DEVELOPMENT CORPORATION

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• NATIONAL DEVELOPMENT CORPORATION
• PRESENTATION ON THE
• MTWARA DEVELOPMENT CORRIDOR
• AT THE ESIPP WORKSHOP ON SADC CORRIDORS IN
  PORTUGAL
• Presented by
• Gideon J. Nasari
• Managing Director
• 25th October, 2007

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MTWARA DEVELOPMENT CORRIDOR

• Presentation Contents
• 1.0 Background
• 2.O Coverage
• 3.0 Current Status
• 4.0 MtDC Anchor Projects and Investment
  Opportunities
• 5.0 Conclusions

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MTWARA DEVELOPMENT CORRIDOR MAP
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1. BACKGROUND

• MtDC is an SDI which will create an economic
  growth zone of trans-border trade and investment
  linking Malawi, Mozambique, Tanzania and Zambia
  through a transport corridor to be served by the
  seaport of Mtwara on the Indian Ocean as the
  gateway for international trade.
• In adopting SDI concept as a social-economic
  development strategy the Government of Tanzania
  (GoT) has mandated the National Development
  Corporation (NDC) to develop, coordinate and
  implement commercial and economic projects in
  the Mtwara Development Corridor

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2. COVERAGE

• MtDC Coverage
• Population
• Malawi 5,910 m
• Mozambique 2,044m
• Tanzania 8,433m
• Zambia 3,340 m
• Total 19,727 m
• of 4 countries 25
• Area
• Malawi 49,000 km²
• Mozambique 50,068 km²
• Tanzania 160,785 km²
• Zambia 94,667 km²
• Total 354,520 km²
• of 4 countries 38

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3. CURRENT STATUS

• Institutional Structure is already in place
• 3 years Business Plan Completed
• Over 330 projects have been identified and scoped
• Mobilization of resources for project appraisal,
  promotion and marketing to attract investment is
  on going
• Projects of regional significance that have
  immediate impact and catalytic have been
  prioritized
• Identification of other projects is ongoing

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4. ANCHOR PROJECTS AND INVESTMENT OPPORTUNITIES

• Mchuchuma Coal and Liganga Iron Ore Projects
• Mtwara Mbamba Bay Road
• Heavy Capacity Ferry linking Mbamba Bay and
  Nkhata Bay.
• Mtwara Port
• Kiwira Karonga Power Inter-connector
• Ruvuma Crossings
• Mtwara SEZ/EPZ
• Mchuchuma Mtwara Railway Line with spur to
  Liganga

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4.1. Mchuchuma Coal and Liganga Iron Ore projects

• Feasibility studies for Mchuchuma Coal to
  Electricity project completed
• Initial Geological investigations have been
  carried out for the Liganga Iron Ore Project
• Currently, the two projects are being prepared
  for a competitive procurement process that will
  invite private sector for implemetation
• Transaction Advisor is expected to be in place by
  early November 2007
• Invitation for Bids is expected by Sept. 2008

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4.2 Mtwara Mbamba Bay Road (824km)

• Feasibility Studies for upgrading the 824km
  Mtwara Mbamba Bay Road were completed in 2004.
• Request for financing Detailed Design and
  construction is being finalized with various
  donors
• Pre-qualification of tenders for
  Tunduru-Songea-Mbamba Bay Road Section (370km) is
  expected to start in January 08 and final award
  of tender is expected to be in July 2008
• Pre-qualification of tenders for other road
  sections is also expected to be in January 2008
  including the 225km Tunduma Sumbawanga Road

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4.2. Mtwara Mbamba Bay Road Project (Cont.)
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4.3 Ruvuma Crossings

• The crossings over the Ruvuma river will provide
  the necessary infrastructure required to open up
  regional trade and tourism between Tanzania and
  Mozambique, specifically in Tourism and wildlife,
  manufacturing, mineral exploration and general
  merchandise.
• It is one of the anchor projects in Mtwara
  Development Corridor

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4.3 Ruvuma Crossings Unity Bridge I

• Unity Bridge I across the Rovuma is currently
  under construction at Negomano near the border
  between Cabo Delgado and Niassa provinces in
  Mozambique and Mtambaswala on the Tanzania side
• Bridge is being constructed jointly by the two
  governments.
• The Unity Bridge will cost US 28.9 million,
  including construction of 5km approach roads on
  both sides.
• Construction works are in progress and 12
  supporting columns have already been erected
• works expected take 36 months to complete

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Unity Bridge I Cont.

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Unity Bridge I Under Construction
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4.4 Namoto-Kilambo Ferry Crossing
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Kilambo-Namoto Ferry Crossing and Access Roads

• Road access across the Ruvuma River is currently
  possible near the mouth of the river via a ferry
  service operated by the Tanzania government
• The ferry service is, however, unreliable, mainly
  due to low water levels in the river and aged
  under-powered engines on the existing vessel.
• The service only operates at high tide and
  carries an average of less than 20 vehicles per
  month.
• The operations of the ferry are highly subsidised
  by the Tanzanian government.

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Kilambo-Namoto Ferry Cont.

• The existing 50 kilometre access road from ferry
  to Palma in Mozambique is impassable during the
  rains, even by four wheel drive vehicles.
• the link from the ferry to the nearest paved road
  in Tanzania is at Mtwara is about 40 kilometres.
• Existing traffic volumes are low, mainly tourists
  from South Africa and Mozambique, but these could
  be expected to increase with improved reliability
  of the ferry service and better road links.
• Current commodities across the ferry (less than
  10 tons a day) include garments and other general
  merchandize

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4.5 Kiwira Karonga Power Inter-connector

• The broad sectoral goal of the Kiwira Karonga
  Inter-connector is to integrate the Tanzania
  National Power Grid with Malawi and finally with
  SAPP and the East African Power Grids.
• The Kiwira and Mchuchuma Projects are envisaged
  to provide a power platform, industrial and
  mineral centre in the MtDC region
• The Inter-connector will supply power to
  Kayekereka Uranium Mine (10MW), Mzuzu Medium
  Density Fibre Board Plant (30MW), Chipoka Heavy
  Mineral Sands (140MW)

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Kiwira Karonga Power Inter-connector

• Malawi hosts one of the largest and richest
  ilmenite deposits in Africa.
• The mineral is contained in mineral sands in the
  form of mineable dune sands located around the
  shores of Lake Nyasa
• Estimated reserve is about 1billion tons.
• Plan to build a smelter with a capacity to smelt
  26 million tonnes over a 25-year project life.
• the project would generate annual revenue of USD
  370 million.
• Capital costs of USD 322 million
• The successful commissioning of this project will
  make a significant contribution to the
  development of the two countries
• Power demand estimated at between 70-140MW, for
  the smelter and two furnaces without a line
  up-grade.

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4.6 Heavy Capacity Ferry Linking Mbamba Bay and
Nkhata Bay Ports across lake Nyasa

• The Government of the United Republic of Tanzania
  and the Government of the Republic of Malawi
  signed an MoU in October 2003, for the upgrading
  of the Nkhata Bay Port, construction of Mbamba
  Bay Port in Tanzania and the commissioning of a
  heavy capacity ferry, between Mbamba Bay and
  Nkhata Bay
• NDC prepared a Project Proposal, in collaboration
  with the Governments of Tanzania and Malawi, for
  carrying out feasibility study and submitted the
  same to DBSA-APU for financing under NEPAD.
• NDC is still following up for getting funding
  for the study

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4.7 Mtwara Port

• Mtwara Port is one of the three major ports in
  Tanzania. The deep water port at Mtwara was built
  between 1948 and 1954 mainly for the export of
  groundnuts. Development of the deep water port
  was accompanied by railway construction from
  Mtwara to Nachingwea, which is now defunct
• Mtwara Port is a large area of water with a depth
  of up to 32m and a quay dredged to -9.8m. There
  are no tidal restrictions for vessels entering
  and leaving the harbour, but there is an enforced
  length restriction of 175m due to the shape of
  the channel, particularly the MSEMO SPIT area.

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Mtwara Port (Cont.)

• Currently, the port can handle 400,000 metric
  tons of imports and export per annum. The port is
  mainly designed to handle conventional cargo.
• Mtwara port can handle up to 750,000 MT with the
  same number of berths if additional equipments
  are put in place for handling containerized
  traffic.

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Mtwara Port (cont.)

• Future Expansion Programme
• The Mtwara Port Master Plan envisages expansion
  of the quay wall Westwards by 400 metres and
  Eastwards by another 400 metre. This expansion in
  effect doubles the number of berths from the
  current number to five berths. The total area
  reserved for this expansion is 200 acres.
• Besides the area of 200 acres reserved for port
  expansion, there is also an area of 60 acres
  which is reserved for port related development
  activities. This is an ideal location for EPZ and
  distribution activities. However, depending on
  the demand for land for development and
  commercial activities, the bulk of the 260
• Long term plans include port expansion envisaged
  to handle coal and iron ore with an estimated
  capital investment of US 140 million

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4.8 Mtwara SEZ/EPZ

• The Mtwara EPZ/SEZ project near Mtwara port is an
  anchor projects in the MtDC with tremendous cross
  border development impact as a regional
  industrial platform, based on natural gas,
  mineral beneficiation, agro-processing, forest,
  fisheries and tourism
• It will create growth to eradicate poverty, as
  well as delivery of essential economic services
  infrastructure within the context of the SADC
  Regional Strategic Indicative Programme (RISDP).
• The objective of the project is to develop a
  global/regional industrial infrastructure based
  on the natural gas resources in Mtwara (Tanzania)
  and Cabo Delgado (Mozambique).

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Mtwara SEZ/EPZ Cont.

• Mnazi Bay Gas to Power Project
• In Tanzania Artumas Group Inc. of Canada (AGI) is
  a dominant onshore/offshore acreage holder of
  approx. 756 square kilometres in Mnazi Bay, and
  has recently proven a large gas resource base,
  estimated at approx. 2.4 TCF-392 mmboe, in an
  energy starved region.
• In Mozambique the company was recently awarded a
  large onshore Ruvuma exploration acreage of
  approx. 15,000 square kilometres, which is
  adjacent to Tanzania concession. In both the
  Tanzania and Mozambique concessions are
  surrounded by multi-national companies.
• Recently AGI secured rights to an integrated
  energy project located in the southeast regions
  of Tanzania, East Africa. The USD 105 million,
  Mtwara Energy Project involves the development of
  an existing gas field, the construction and
  operations of a 27-kilometer pipeline, the
  installation and operations of a 24 MW power
  facility and the upgrade and operations of a
  regional transmission and distribution system,
  which are to be operated by Manitoba Hydro.

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Mtwara SEZ/EPZ

• The acute power shortage in the East African
  region has led AGI to initiate a feasibility
  study into a 200MW Mtwara Power Project.
• The project located at the deepwater port of
  Mtwara will provide power and gas to a growing
  industrial region of Tanzania, covering an area
  of approx. 15,000 square miles.
• The project will also provide sufficient off-take
  gas markets. Cash flow from the project provides
  and excellent rate of return and underpins a
  focused, high reward exploration programme.
• AGI has executed a Production Sharing Agreement
  (PSA) with the GoT awarding and oil and gas
  concession comprised of a development block with
  the right to earn eight adjoining exploration
  blocks totalling 190,000 acres.
• The value of the concession is enhanced by its
  coverage of a highly prospective delta system
  with production tested gas and oil further
  supported by known oil seeps in close proximity.

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4.9 Mchuchuma Mtwara Railway Line
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Mchuchuma-Mtwara Railway Line Cont.

• The proposed Mchuchuma-Mtwara Railway Line with
  Spur to Liganga in Southern Tanzania linking the
  coal and iron ore mines at Mchuchuma and Liganga
  is backbone transport corridor for the Mtwara
  Development Corridor (MtDC)
• About 330projects worth US 13.4 billion have
  been identified in the MtDC region to anchor the
  corridor in the sectors of minerals, Agriculture,
  forestry, manufacturing, trade and tourism
• The 828km Mchuchuma Mtwara Railway Line with
  spur to Liganga is estimated to cost US 1.5
  billion capital investment

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5. CONCLUSION

• Potential Investment Opportunities in the sectors
  of Mining, Infrastructure, Tourism, Agriculture
  and Manufacturing are currently in place at the
  MtDC region
• Legal and Regulatory Framework for investment is
  friendly
• Investment facilitation institutions are in place
• Investors welcomed to invest in MtDC
• Contact NDC for information

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• END
• THANK YOU