The government of Japan has signed with the Tanzanian Treasury three sets of notes to offer the east African country 9.5 billion Japanese yen (80 million U.S. dollars) in loans and grants for development.

The notes were signed by Japanese Ambassador to Tanzania Makoto Ito and Managing Director of the Japan Bank for International Cooperation Koji Tonami as well as Tanzania's Treasury Permanent Secretary Gray Mgonja.

Out of the promised amount, 600 million yen (5 million dollars) will serve as non-project grant to go directly into the General Budget Support for Tanzania during the 2007/2008 fiscal year that starts on July 1 this year, according to a finance ministry statement available on Saturday.

The remaining 75 million dollars will be given in loans to be used to facilitate such projects as poverty reduction support credits of the World Bank and the construction of the highway linking Arusha of northern Tanzania with Athi River of Kenya via the border town of Namanga.

The African Development Bank is co-financing the construction of the road, offering 92 million dollars to the project.

The Japanese loans are payable for a period of 40 years with an interest rate of 0.01 percent, lower than that of the World Bank and African Development Bank loans.

Tanzania has praised the Asian country for the favorable terms.

Source: Xinhua