Tanzania’s government, the African Development Bank, and the French Development Agency (AFD) have signed agreements for two $300 million development project loans. The monies will be used to build the 87.8-megawatt Kakono Hydropower Plant in the Kagera region of northern Tanzania. The European Union additionally provided a grant of EUR 36 million to the project.
Tanzania’s electrical supply is reliant on hydropower and thermal power plants, the majority of which are gas-fired. It does, however, have significant untapped renewable energy potential to satisfy its rapid expansion while remaining on a low-carbon path.
A group of development partners is funding the Kakono Hydropower Project, which aims to expand renewable generation capacity and reduce hydrological risk by building a dam on a new watershed that is less prone to droughts.
The African Development Bank, the French Development Agency, and the European Union worked together to build the Kakono Hydropower Plant. These organizations are co-financing this project with a soft loan of $ 161.47 million from the African Development Bank, a soft loan of EURO 110 million from the French Development Agency, and a grant of EURO 36 million from the European Union.
Tanzania’s Electric Supply Company (TANESCO) will implement the Kakono Hydropower Project, which will reduce greenhouse gas emissions by 216,065 metric tons per year while meeting the highest international environmental and social standards.
The project will serve 4 million people and boost service coverage by around 7%. It is expected to have a significant impact on the economic growth of this rapidly expanding zone in the heart of the Great Lakes region. This project will increase industry and economic growth in Tanzania and surrounding countries, as well as consolidate Tanzania’s leadership position within the East African Community.
Along with the new hydropower plant, accompanying infrastructure will be erected, including an upgrade of the existing Kyaka substation, a new 39-kilometer 220-kilovolt transmission line, and capacity building support for TANESCO.
Participants showed their support for the project following the event.
Patricia Laverley, African Development Bank Country Manager for Tanzania, stated that when completed, the Kakono Hydropower Plant will service nearly four million people, small-medium enterprises, and mining industries in the country’s northwestern region.
“The construction of the new power plant will help to improve TANESCO’s financial sustainability as the diesel-based power plants in the Kagera Region are decommissioned,” she added. The economic benefits of supplying affordable power will be enormous. We can anticipate significant improvements in the quality of life for residents in the Kagera region and throughout Tanzania. These enormous advantages would help Tanzania establish a more competitive economy under the leadership of President Samia Suluhu Hassan.”
“We have heard President Samia Suluhu’s message,” stated Ambassador Nabil Hajlaoui. She hopes to generate 5 gigatonnes of power by 2025. France is prepared to participate in this journey by investing in power generation and transmission projects to fulfill rapidly increasing electricity demand while reducing the carbon intensity of its energy mix.”
“We are delighted with the signing of this project, which is fully in line with international climate objectives and AFD’s strong commitments in this regard,” said AFD Country Director Celine Robert. Because the infrastructure will meet the electricity needs of 3 to 4 million people, this investment will have a significant impact on economic development and human well-being. This signing marks an important milestone and underlines the Government’s and AFD’s growing partnership.”
