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25 years of investing in the Tanzanian private sector

25 years of investing in the Tanzanian private sector. Björn Blomberg , Managing Director, Swedfund. Swedfund in short. Contribute to the development of sound and profitable businesses , ensuring positive and sustainable economic development in the countries where we invest.

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25 years of investing in the Tanzanian private sector

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  1. Celebrating 50 Years of Tanzania in Nordic Countries 25 years of investing in the Tanzanian private sector Björn Blomberg, Managing Director, Swedfund

  2. Celebrating 50 Years of Tanzania in Nordic Countries Swedfund in short Contributeto the developmentof sound and profitable businesses, ensuring positive and sustainableeconomicdevelopment in the countrieswhereweinvest. Short info Instruments Focus on equity and equity related such as subordinated loans Our investment MSEK10-100 Numberofinvestments 230 since the start in 1979 Present portfolio 93 investments in 46 countries Capital SEK 2,7 bninvestedcapital ESG Ethical and environmentalaspectsimportantwhenweinvest • State owned investment company • Responsibleand 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 headoffice in Stockholm and 2 employees in regional office in Nairobi, Kenya

  3. Celebrating 50 Years of Tanzania in Nordic Countries Business model Swedfund’s investment criteria 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 horizon5 – 10 years Portfolio company Swedfund Industrial partner Financial partner

  4. Celebrating 50 Years of Tanzania in Nordic Countries Direct investments (share capital and loans) Indirect investments (funds) Direct and indirect investments Stockholm Nairobi *Valueof the investments As per 31 Dec 2010

  5. Celebrating 50 Years of Tanzania in Nordic Countries ”The Real Risk” Road fatalities per 100 000 inhabitants per year: • Tanzania 34,3 • Sweden 2,9 • France 6,9 • South Africa 33,2

  6. Celebrating 50 Years of Tanzania in Nordic Countries Problems for business Otherproblems 1Electricitysupply 2Financing 3Recrutinglocal management • Corruption - It takestwoto tango, butperceivedimpunity is a problem • Law and Legal Process - lowand inefficientworkingsofthe understaffedcourts • Tax Administration Business - still carriedout on a cash basis = tax evasion. Thosecomplyingwith the lawbecomeonlytargetsofTRA collectors • Port Congestion - causesdelays, misunderstandings and mistakes

  7. Celebrating 50 Years of Tanzania in Nordic Countries 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

  8. Celebrating 50 Years of Tanzania in Nordic Countries Invest in a safeand profitable place - Investin Tanzania!

  9. Celebrating 50 Years of Tanzania in Nordic Countries Our regional investments & investments in Tanzania Present Previous

  10. Celebrating 50 Years of Tanzania in Nordic Countries Tanzania Portland Cement Company (TPCC) Facts TPCC produces cement and clinker and helps meet local demands. It wasfounded by the TZ GvT in 1959, butexperiencedbiglosses. In 1992, Swedfund and Scancem providedcapital, expertise and staffreceivedsignificanttraining. In 1997 TPCC became profitable and is todayrecognised as oneof the mostsuccessfulcompanies in TZ. It is understoodtoindirectly support around 90,000 jobs. Sector: Infrastructure Yearof investment: 1992 Yearof exit: 2005 Swedfund’s investment: MUSD 3,3 Swedfund’sshare: 19%ofsharecapital Industrial partner: Scancem International

  11. Celebrating 50 Years of Tanzania in Nordic Countries Dar es Salaam Airports Handling Company (Dahaco) Facts SF, SAS and Danish IFU joined the Air Tanzania Co. in a JV. Dahacowas a greatsuccess from the beginningwithgoodprofitability and extensive transfer ofknowledgewithin all jobtypes – includingthrough a SIDA financedtrainingprogramme. The Dar es Salaam airportwasseveraltimesselected as best airport in Africa. Sector: Infrastructure Yearof investment: 1985 Yearof exit: 2000 Swedfund’sshare: 10% ofsharecapital Industrial partner: SAS

  12. Celebrating 50 Years of Tanzania in Nordic Countries Pemacco-Bevi (PB) Facts PB repaired and servicedelectrical motors across TZ. Before PB companies in TZ hadto get repairsoverseas – almostimpossiblebecauseof the lack offoreigncurrency. SF became JV partners with Pioneer Electrical Machines & Consultancy Co. and Bevi Blomstermåla. SF providedcapital, business planning and foreignexperience. 60 jobswerecreated and the business is now run by Radi. Sector: Manufacturing Yearof investment: 1986 Yearof exit: 1997 Swedfund’sshare: 14%ofsharecapital Industrial partner: Bevi Blomstermåla

  13. Celebrating 50 Years of Tanzania in Nordic Countries TANSCAN Facts Established as TWICO in 1979 by the TZ Gvt. It received support from SIDA and later became a JV under the nameof TANSCAN with SF and Swedish technical partner Lindsaw. TANSCAN harvested, replanted, sawed and sold soft wood, whichwas in greatdemand in the local market. TANSCAN wasboughtout by the management and in 2004 employeedaround 50 staff. Sector: Agribusiness Yearof investment: 1986 Yearof exit: 2004 Swedfund’sshare: 17% ofsharecapital Industrial partner: Lindsaw

  14. Celebrating 50 Years of Tanzania in Nordic Countries Arusha Tolls & Die Maker Co. (ATOMAC) Facts ATOMAC was a high precision toolmanufacturer in Arusha. Established in 1987 as a JV between the TZ co. NorthernElectricalManufacturers (NEM), SF and Finnveden. SIDA providedfinancing and SF provided a loan and ensuredappropriatecompany management. ATOMAC providedjobsand productstpreviouslyunavailable in TZ. It ended in bankruptcy in 2000 and SF lostits investment. Sector: Manufacturing Yearof investment: 1987 Yearof exit: n/a Swedfund’sshare: 20%ofsharecapital Industrial partner: NEM

  15. Celebrating 50 Years of Tanzania in Nordic Countries Thankyou! Swedfund International AB Sveavägen 24-26, Box 3286 103 65 Stockholm Tel: 08-725 94 00 Fax: 08-20 30 93

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