Swala oil and gas Tanzania will establish a trust fund that will be used to collect proceeds from sales in oil and gas for communities in areas where extraction is to happen.
Speaking during an interview with The Guardian the company’s CEO Dr. David Ridge the fund will target mainly Kilosa-Kilombero and Pangani projects.
The announcement follows the initial public offer prospectus at the Dar es Salaam bourse earlier in the week on which the company hopes to raise KES 260 million from 9.6 million shares it seeks to get additional funds to the working capital.
The company plans to channel 2.5 million shares to the fund that is hoped will attract venture capital to finance community projects in the two areas.
“I agree that the shares are very expensive, but putting them below the amount would render them valueless. We’re moving on to set up a trust fund to enable the community where we operate to get additional benefits,” he told the Guardian.
Ridges also told the paper that the fund will be managed by key individuals outsourced from different industries with trustees being entitled to up to 10 percent of the 2.5 million shares.
The CEO also said the company has no intention of increasing shares sold to Tanzanians above 50 percent with Tanzanians currently holding a 35 percent stake with another 7 percent up for uptake in the Swala oil and gas IPO.
Although he admitted that the over 50 percent share threshold in the hands of Tanzanians would offer more symbolism of a locally owned company he insisted all decisions to sell shares would be motivated by business needs.
“We wouldn’t aim for 50 per cent just for symbolism,” he concluded.