This archive report was first published on 18 October 2019.
On October 18, 2019, the International Centre for Settlement of Investment Disputes (ICSID) ordered Tanzania's government to pay Standard Chartered Bank Hong Kong $185.4 million (KSh19 billion) for breach of contract.
The ruling was made after a power producer in Tanzania, IPTL, failed to provide security for a loan with the bank, as per an agreement signed in 1995. IPTL had signed a contract with Tanesco to supply 100MW of electricity through a plant on the outskirts of Daresalaam.
Standard Chartered Bank of Hong Kong acquired the loan, and the bank filed a case with the ICSID in 2015, seeking a settlement of $352.2 million.
However, the government of Tanzania denied responsibility, citing that it was not willing to pay the damages. The government's spokesman, Hassan Abbasi, stated that neither the government nor TANESCO had a legal liability in the case.
Additionally, the Country's attorney general, Adelardus Kilangi, explained that the government only plays a supervisory role in the repayment of the loan. He clarified that the award meant the government should supervise IPTL to make the payment, not that the government should pay the settlement.
