• The institutions signed agreements for two development project loans worth $300 million.

• The Kakono Hydropower Plant will increase renewable generation capacity and reduce hydrological risk via a dam.

The Tanzanian government, the African Development Bank, and the French Development Agency (AFD) have inked agreements for two development project loans worth $300 million. The funds will sponsor the construction of the 87.8-megawatt Kakono Hydropower Plant located in the Kagera region in the northern part of Tanzania. It has also received a grant of 36 million euros from the European Union.

According to a press release by AfDB, Tanzania depends on hydropower and thermal power plants mainly gas-fired for its electricity supply. The funding of the Kakono Hydropower Plant is to increase renewable generation capacity and reduce hydrological risk via a dam. It stated that the signing ceremony occurred on March 15th, in Tanzania’s major city, Dar es Salaam.

AfDB, AFD, and the European Union are co-funding this project with a soft loan of $161.47 million from AfDB, 110 million euros from AFD, and a 36 million euros grant from the European Union.

The project will be implemented by Tanzania’s Electric Supply Company (TANESCO) and will reduce greenhouse gas emissions by 216,065 metric tonnes in a year. It will provide services to 4 million people, and enhance service coverage by about 7% of the population. 

The press statement stated that the project would bolster industrialization and spur economic growth in Tanzania and the neighboring countries, as well as strengthen Tanzania’s leading position within the East African Community.

Along with the construction of the new hydropower plant, there will also be related 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.