The African Development Bank (AfDB) has signed a new loan agreement with the Government of Tanzania totalling $140 million to finance the construction of the 50-Megawatt Malagarasi hydropower plant in Western Tanzania.
The financing agreement involves a $120 million sovereign loan from the Bank and $20 million from the Africa Growing Together Fund (AGTF), administered by the Bank. The project’s overall cost is estimated at US$144.14 million.
The Malagarasi Hydropower project has several components: a run-of-the-river hydropower plant facility; a 54- km, 132 kV transmission line that will connect to Tanzania’s national grid; a distribution network expansion operation that includes rural electrification and last-mile connections; project management and contract administration support; and compensation and resettlement of affected persons.
Emmanuel M. Tutuba, Permanent Secretary at the Tanzania Ministry of Finance and Planning, and Nnenna Nwabufo, Director General of the Bank Group’s East Africa Regional Development and Business Delivery Office, signed the agreements.
Based on use of the funds, it is specifically targeted for the construction of the plant and an evacuation transmission line. It also includes an additional 4,250 rural electrification connections, providing reliable renewable energy to households, schools, clinics and small and medium-sized enterprises in the Kigoma Region.
Emmanuel M. Tutuba, Permanent Secretary at the Tanzania Ministry of Finance and Planning remarked: “I would like to re-affirm the government’s commitment to working closely with the Bank in efforts to realize our national and international development aspirations. The government will take all necessary measures to ensure successful implementation of this project as planned.”
More so, he praised Tanzania’s warm and cordial relationship with the African Development Bank that goes all the way back to 1964. He noted that the country was a proud founding shareholder who regards the Bank as a “development partner of choice.”
Project in line with Tanzania’s second Five-year Dev’t Plan
This new project, for which the funds are being signed is one of Tanzania’s priorities under its Second Five-Year Development Plan. This will also go a long way to advance the objectives of the country’s Vision 2025. It also aligns with two of the Bank’s High Five strategic priorities, namely, Light up and Power Africa and Improve the quality of life for the people of Africa.
Nnenna Nwabufo commented, “the signing of the loan agreements is another testimony of our joint commitment to working together to support Tanzania’s development aspirations. Malagarasi Hydropower is one of the flagship projects in Tanzania’s Second Five-Year Plan. We appreciate the trust the Government has put in the African Development Bank and we are committed to remaining a privileged and trusted partner of choice.”
The project is one of six transformative infrastructure projects, with a total value of $1.12 billion that the African Development Bank has approved in Tanzania over the last three years.
The Bank Group’s total ongoing commitment in Tanzania, about $2.33 billion in value, covers the key sectors of transport, energy, water supply and sanitation, agriculture, governance and finance.
The Africa Growing Together Fund is a facility sponsored by the People’s Bank of China and administered by the African Development Bank.
