The African Development Bank and the French Development Agency (AFD) have signed agreements with the government of Tanzania for two development project loans worth $300 million to finance the construction of the 87.8-megawatt Kakono Hydropower Plant located in Kagera region in the northern part of Tanzania.
A coalition of development partners are financing the Kakono Hydropower Project, intended to increase renewable generation capacity and reduce hydrological risk via a dam located on a new watershed that is less affected by droughts. Meanwhile, the project also received a grant of EURO 36 million from the European Union.
At the ceremony, participants expressed their support for the project. The African Development Bank Country Manager for Tanzania Patricia Laverley observed that the project, when completed, would serve approximately four million people, small-medium enterprises, and mining companies in the northwestern part of the country.
“The construction of the new power plant will help to improve TANESCO’s financial sustainability arising from the decommissioning of the diesel-based power plants in the Kagera Region. The economic benefits derived from the supply of affordable power will be immense. We can expect to see a marked improvement in the quality of life for people in the Kagera region and in Tanzania more broadly. These tremendous gains will contribute to building a more competitive economy in Tanzania, under the leadership of President Samia Suluhu Hassan.”
Patricia Laverley
France to Add More Gigawatts
Ambassador Nabil Hajlaoui also said she aims to generate 5 gigawatts of electricity by 2025. “France is ready to be part of this journey by investing in power generation and transmission projects to meet the rapidly growing electricity demand while reducing the carbon intensity of its energy mix” she stated.
AFD Country Director Celine Robert expressed his delight with the signing of the project, which is fully in line with international climate objectives and AFD’s strong commitments in that regard.
“This investment will have major impact on economic development and on population well-being as the infrastructure will answer the power needs of 3 to 4 million people. This signing represents an important milestone and confirms that the cooperation between Government and AFD is deepening.”
Celine Robert
Tanzania is dependent on hydropower and thermal power plants – mainly gas-fired for its electricity supply. However, it has considerable untapped renewable energy potential to meet its rapid growth while taking a low-carbon path.
The Kakono Hydropower Plant is the result of close collaboration between the African Development Bank, Agence francaise de developpement, and the European Union. These institutions are co-financing this project with a $ 161.47 million African Development Bank soft loan, a EURO 110 million soft loan from French Development Agency, and EURO 36 million grant from the European Union.
The Kakono Hydropower Project which will be implemented by Tanzania’s Electric Supply Company (TANESCO), will reduce greenhouse gas emissions by 216,065 metric tons per year, and comply with the best international environmental and social standards.
The project will serve 4 million people and increase the service coverage rate by around 7% of the population. It is expected to have a major impact on the economic development of this rapidly growing zone, which lies at the heart of the Great Lakes region. This project will boost industrialization and spur economic growth in Tanzania and the neighboring countries and will strengthen Tanzania’s leading position within the East African Community.
Alongside the construction of the new hydropower plant, there will also be associated infrastructure built, including the upgrading of the existing Kyaka substation and a new 39-kilometer 220-kilovolt transmission line, and capacity building support for TANESCO.
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