"The government through the Bank of Tanzania instructed Stanbic Bank to open three escrow accounts as one of the conditions for obtaining loans for the new natural gas infrastructure from the Export-Import Bank of China," TPDC said in a statement in response to questions from The Guardian.
"The accounts are controlled by the provisions of the escrow accounts management agreement jointly signed between Stanbic Bank (as the escrow bank), TPDC (as the end user), Exim Bank (as the lender), and the Ministry of Finance (as the borrower on behalf of the Tanzanian government)," the statement added.
The escrow accounts opened by TPDC are the Gas Revenue Account for the purpose of depositing all revenues accrued from gas sales through the pipeline; the Operational Account intended to be used for running the infrastructure; and the Loan Repayment Account.
"TPDC was authorised to be a signatory to (all three) accounts. Currently the two accounts of gas revenues and operational are still dormant and are expected to be active after declaration of the project's official commercial operational date (COD)," the TPDC statement said.
"The loan repayment account is active and funds deposited therein by the government of Tanzania and TPDC during different periods of time have reached to the tune of $60 million," it further explained.
According to the petroleum sector’s regulatory agency, the loan repayment escrow account was opened for the depositing of collateral funds to cover interests and commitment fees for disbursements made by China's Exim Bank during the project implementation period.
The same account was also intended for the depositing of funds to be used to repay loans received from the Chinese bank after the project handover and after the end of the loan grace periods.
Stanbic Bank was picked to handle the escrow accounts "following a competitive bidding process as per procurement procedures," the TPDC statement said.
The pipeline and accompanying gas processing plants were commissioned last year.
The pipeline and accompanying gas processing plants were commissioned last year.
The actual cost of the project has recently been an issue of controversy with some opposition members of parliament claiming it was inflated by over 100 per cent and at least $600 million was allegedly spent on paying kickbacks to some key government officials.
The timing of the opening of the escrow accounts in March 2013 coincided with a mammoth $600 million loan to the Tanzanian government arranged by Stanbic Bank and its parent company, Standard Bank.
But until yesterday’s TPDC statement, the key institutions involved have chosen to remain surprisingly tight-lipped on both transactions. Stanbic Bank officials have not responded to The Guardian's queries on any possible links between the escrow accounts and the said loan.
And although the Bank of Tanzania (BoT) officially authorised the opening of the TPDC escrow accounts at Stanbic Bank, BoT governor Prof. Benno Ndulu has also flatly refused to divulge details on the matter.
"I will not respond to questions on TPDC’s financial matters. Ask TPDC," Ndulu responded curtly when approached by The Guardian to comment about the accounts.
Stanbic Bank is already at the centre of controversial revelations that a $6 million bribe was allegedly paid to senior Tanzania government officials in connection with work on the loan deal in 2012 and 2013.
Stanbic Bank is already at the centre of controversial revelations that a $6 million bribe was allegedly paid to senior Tanzania government officials in connection with work on the loan deal in 2012 and 2013.
The former commissioner general of the Tanzania Revenue Authority (TRA), Harry Kitilya, and two ex-Stanbic Bank officials are currently facing serious corruption charges in a Dar es Salaam court over the matter. They have denied the charges and their case now awaits a formal hearing date.
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