How asset recycling could rewrite infrastructure financing model

**DAR ES SALAAM: **RECYCLING asset financing presents a significant yet underutilised opportunity for Tanzania, particularly as the country advances towards its Dira 2050 goals to address a major development challenge: The lack of long-term capital for infrastructure.

For those unfamiliar with these terms, asset recycling involves governments or public institutions unlocking the financial value of mature, productive national assets and redirecting the proceeds to new infrastructure and productive projects.

Instead of relying solely on government budgets, sovereign borrowing, or development partners to finance every project such as roads, railways, ports, energy facilities, water systems, or digital networks, a country can use existing assets as a source of capital.

In Tanzania, this approach aligns with the themes of the 2026 Southern African Development Community (SADC) Industrialisation Week in Durban, South Africa that took place from July 27 to 31 this year. The event focused on resilient, sustainable and inclusive industrialisation, highlighting infrastructure, agricultural transformation and critical minerals.

It emphasised infrastructure development, mobilising investments, enhancing regional value chains and forging stronger partnerships among governments, Development Finance Institutions (DFIs) and private investors.

Tanzania has considerable room to adopt recycling asset financing as a complementary strategy for accelerating infrastructure and industrialisation, particularly in light of the recommendations emerging from the 2026 SADC Industrialisation Week (SIW).

The model is especially relevant because Tanzania has accumulated a significant portfolio of public infrastructure and commercially valuable assets while simultaneously facing rising demand for new investment in transport, energy, water, logistics, industrial parks, digital infrastructure and urban services.

The 9th SIW, focused on shifting from policy goals to actual implementation by boosting investment in infrastructure, agricultural transformation, critical-mineral beneficiation, regional value chains, innovative financing and fostering stronger partnerships among governments, private investors and Development Finance Institutions (DFIs).

Tanzania, which was present at the event, therefore has an opportunity to translate this regional thinking into a national asset-recycling strategy aligned with Vision 2050, Tanzania’s Fourth Five-Year Development Plan (FYDP IV) and the country’s industrialisation ambitions.

Specifically, what would asset recycling financing mean for Tanzania? Asset recycling means unlocking part of the financial value of mature, productive, or underutilised public assets and reinvesting the proceeds into new productive infrastructure.

This does not automatically imply selling national assets. A government can keep ownership while generating revenue from an asset via a long-term concession, lease, Public-Private Partnership (PPP), infrastructure fund, securitisation of steady revenues, minority equity stake, or other structured financing methods.

For example, if an existing port, airport, commercial property, road toll, power facility, railway-related asset, or industrial estate generates predictable cash flows, those cash flows can support longterm financing for another infrastructure project.

Rather than recording the economic value of an existing asset on the public balance sheet, the government leverages the asset’s financial potential to fund new infrastructure projects. The core idea is straightforward: Optimise existing national assets to support the development of new ones. Hence, why does Tanzania have particularly strong potential?

Tanzania oversees key infrastructure initiatives in sectors like transport, energy, water and logistics. The Ministry of Finance highlights several flagship projects, such as the Julius Nyerere Hydropower Project, which was officially launched last week by President Dr Samia Suluhu Hassan.

Other major projects include East African Crude Oil Pipeline (EACOP), Air Tanzania and the Standard Gauge Railway (SGR). These initiatives are supported by ports, airports, roads, telecommunications infrastructure, government commercial properties, industrial land and additional public assets.

The strategic focus should shift from ‘how much more can government borrow?’ to ‘how much economic value can Tanzania generate from its existing assets without jeopardising national interests?’

This distinction is essential. Traditional infrastructure funding usually involves obtaining new debt or allocating yearly budget resources. Asset recycling adds a third option: Balance-sheet optimisation. This approach could enable Tanzania to finance infrastructure projects in a timely manner without relying solely on taxes, grants, or extra sovereign loans. Why?

Tanzania has a well-established institutional framework for PPPs. The Public-Private Partnership Centre (PPPC) already considers PPPs a strategic approach to attract investment in infrastructure.

It emphasises that privatesector participation can accelerate infrastructure projects and ease government financial burdens. Furthermore, Tanzania’s legal and regulatory framework for PPPs includes the Public-Private Partnership Act, Revised Edition 2023, along with the 2023 amendments and regulations.

The PPPC maintains a national PPP pipeline, listing projects in sectors like roads, airports, energy, health and commercial property and commercial farming. The framework supports various models, such as Design-BuildFinance-Operate-Maintain and Build-Operate-Transfer. This means asset recycling could be developed as an extension of Tanzania’s existing PPP architecture, rather than as an entirely new institutional system.

This opportunity involves shifting from PPPs to asset recycling. However, there is a key difference: While typical PPPs aim to attract private investment for new projects, asset recycling considers whether existing public assets can be leveraged to fund more initiatives.

Imagine Tanzania owns a mature commercial asset with steady annual revenues. Instead of just collecting these revenues annually, the government might arrange a longterm concession to secure an upfront payment.

Alternatively, a specialpurpose vehicle could leverage future revenue streams through borrowing. The capital raised could then fund projects such as a new railway spur, a strategic power transmission line, an industrial park, a logistics centre, or water infrastructure. The idea is that the original asset continues operating, while the proceeds finance another productive asset.

This creates a potential multiplier effect for infrastructure. Transport, in particular, offers significant opportunities. Tanzania’s strategic location makes it an ideal candidate for such developments. The country serves as a gateway to multiple landlocked economies and is rapidly investing in railways, ports, roads and logistics facilities. The benefits of these networks extend beyond Tanzania’s borders, aiding regional trade.

Asset recycling could therefore be applied to mature or commercially viable transport assets to finance new connectivity. For example, revenues from a mature logistics facility could support financing for a railway extension, an inland container depot, a border logistics centre, or a road connection.

The goal is to establish a cycle where existing logistics infrastructure funds new developments, boosting trade volumes and enhancing the system’s revenue. This aligns with the SIW’s focus on strategic investments in transport, energy and digital networks as key pillars for trade, investment and regional growth.

This approach offers significant benefits for a national water or energy grid. Energy is a critical sector. With the new JNHPP coming online on 22 August 2026 and expanding Tanzania’s capacity to 2,116 megawatts, there are opportunities to establish commercially viable infrastructure for transmission, distribution and related services. Likewise, water infrastructure such as urban bulk water supply, wastewater treatment and bulk water systems can generate stable revenue streams that support long-term, organised financing.

However, these sectors need careful distinction between commercial assets and vital public services. Asset recycling should aim to boost efficiency and generate capital without compromising affordability, universal access, or appropriate public regulation, rather than simply commercialising essential services.

Amid these recycling initiatives, government property and land may serve as a significant source of development funding. A largely overlooked opportunity involves public land and property. Tanzania owns government buildings, unused or underused land, commercial properties and institutional estates in strategic locations. Some of these assets could be redeveloped via PPPs or long-term leases.

Rather than selling strategic land directly, the government could use the office of the Treasury registrar to retain ownership and grant private investors long-term development rights. Income from upfront lease payments, development premiums, or revenue-sharing deals could be directed toward infrastructure and industrial development funds. This would transform idle or underutilised public property into productive capital while preserving public ownership.

The Ministry of Finance’s strategic planning documents identify public property management as a key government activity, indicating that asset management is already acknowledged as a vital public finance role, as seen in the utilisation of governmentowned public policy banks.

In Tanzania, development finance institutions like TIB Development Bank and TADB could serve as key players in structuring and catalysing projects. Asset recycling involves complex financial tasks such as asset valuation, cash-flow forecasting, risk sharing, project preparation, credit enhancement, legal structuring and attracting investors.

A Tanzanian infrastructure asset recycling facil- ity could facilitate collaboration among the Ministry of Finance, PPPC, DFIs, sector ministries, institutional investors and private-sector actors. It would identify mature assets, evaluate their commercial potential, determine which are suitable for concessions or revenue-backed financing and develop a pipeline of new infrastructure projects to attract recycled capital.

This response, if adopted by our policymakers for further decision-making, aligns with the SIW call for enhanced collaboration among governments, the private sector, DFIs and regional stakeholders, as well as innovative financing mechanisms to accelerate industrialisation.

Strategically, adopting the model could enhance pension and domestic institutional capital mo- bilisation, as suggested at the Africa50 summit held on August 5-6, 2026, in JNCC, Dar es Salaam, Tanzania. Additionally, asset recycling could facilitate the mobilisation of longterm domestic institutional capital. Pension funds, insurance companies and other institutional inves- tors seek long duration assets with predictable cash flows. Mature infrastructure concessions may offer precisely these investment opportunities.

Rather than heavily de- pending on external borrowing, Tanzania could steadily develop a domestic infrastructure-financing ecosystem. In this system, local institutional investors would partake in infrastructure assets, with the government maintaining strategic oversight. Such an approach would enhance Tanzania’s capital markets and strengthen the link between domestic savings and national growth.

However, it is critically important for Tanzania to avoid the risk of selling the family silver. Asset recycling isn’t always advantageous. If not properly managed, transactions can lead to the transfer of valuable public assets to private investors at undervalued prices, the incurrence of hidden fiscal liabilities, or the diminution of public oversight of key infrastructure.

Therefore, Tanzania must implement multiple safeguards including independent asset valuation, transparent and competitive procurement processes, public disclosure, robust regulatory oversight, clear risk allocation, valuefor-money assessments and a strict separation between asset monetisation and on going expenditures.

The 2023 PPP frame- work encourages competitive bidding and organised project procedures. The next move is to implement similar discipline in assetrecycling deals. Importantly, revenue from asset recycling must be solely allocated to new infrastructure initiatives and not used to fund routine government expenses. Failing to do so could lead Tanzania to merely swap assets for short-term fiscal support, without actually boosting its productive capacity.

Tanzania can begin its control measures without implementing a nationwide program right away. Instead, it would be effective to select five to ten mature public assets and carry out independent feasibility and valuation assessments. These assets might include certain commercial properties, logistics facilities, airport-related commercial assets, port infrastructure, energy assets, industrial land and other public assets that generate revenue or have significant potential to do so at market rates.

The government could categorise assets into three groups: Category A for assets ready for immediate recycling; Category B for those requiring restructuring or operational enhance- ments before recycling and Category C for strategic assets that should remain fully under public ownership. This method would enable Tanzania to gain insights from initial pilot transactions before expanding the programme.

Tanzania has considerable potential for asset recycling finance but lacks a comprehensive national framework at present. The moment is ideal, especially following the 2026 SIW discussions in Durban, which emphasised the need to expand infrastructure, attract investment, strengthen regional value chains, enhance competitiveness, adopt innovative financing techniques and translate commitments into practical steps.

Furthermore, the 46th SADC Summit explicitly approved the SIW Declaration and urged member states to strengthen regional industrial value chains. The goal is to increase production, add value, boost trade within SADC and improve industrial competitiveness.

In Tanzania, asset re- cycling has the potential to become a key com- ponent of infrastructure funding, complementing sources like taxation, sovereign loans, development finance, PPPs and private investments. Its main benefit would be shifting the financing approach from a model of ‘build, own, and wait for government revenue’ to one of ‘build, optimise, monetise where suitable and reinvest.”

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The strategic opportunity lies not in privatising Tanzania’s national assets but in unlocking their latent or mature economic value while safeguarding national interests. With effective governance, a Tanzanian asset-recycling initiative could continue to transform existing ports, airports, roads, energy infrastructure, commercial properties, land and other productive assets into a continuous source of capital. This capital could then fund new projects such as railways, industrial parks, energy and water infrastructure, logistics corridors and digital networks.

Following the Durban SIW recommendations, the main goal is clear: Tanzania should leverage its existing infrastructure from yesterday to fund future projects, using tomorrow’s infrastructure as the backbone for the country’s industrialisation

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