In a groundbreaking move, the Agence Française de Développement (AFD) and the European Union (EU) have joined forces to finance the construction of the Kakono hydropower plant in Tanzania's Kagera Region. The momentous agreement, valued at €296 million, was officially signed at the Global Gateway Forum in Brussels, as confirmed by a statement released by the European Union Delegation in Tanzania on Thursday.
Under this partnership, the EU and AFD will jointly contribute €146 million (about 384.7 billion Tanzanian shillings) towards the total project cost. Of this amount, the EU will invest €36 million (about 95 billion Tanzanian shillings) in grants. This initiative aligns with Tanzania's ongoing efforts to diversify its energy sources and introduce green energy solutions, as part of the Global Gateway Investment Package for Africa.
The Kakono hydropower plant, set to be established approximately 90 km west of Bukoba Municipality in north-western Tanzania, will be strategically located downstream of three key sites along the Kagera River: Rusumo, Murongo/Kikagati, and Nsongezi. This development falls within the framework of the "economic growth" pillar of FYDP III, aiming to enhance Tanzania's economic competitiveness and inclusivity by bolstering electricity generation and reliability.
This project not only responds to the rising demand for electricity in northern Tanzania but also contributes significantly to the reduction of greenhouse gas emissions, expected to reach 213,810 tonnes annually. Additionally, it is anticipated to play a pivotal role in improving the financial stability of the Tanzania Electric Supply Company (TANESCO) and bridging the electricity deficit in Kagera, Geita, and Mwanza regions in the Lake Zone.
The EU Commissioner for International Partnerships, Jutta Urpilainen, expressed her enthusiasm, stating, "The recent, first-ever Tanzania–EU Business Forum saw investments worth €1 billion being announced, notably the Kakono hydropower project. I am pleased to follow up with today’s signature, with the EU contributing to Tanzania’s efforts to diversify its energy sources and bring green energy into the mix in line with the Global Gateway Investment Package for Africa."
This collaborative effort also reinforces the long-standing partnership between the EU and Tanzania, focusing on green deals, human capital, employment, and governance. The Kakono hydropower plant is anticipated to add 87.8 MW to Tanzania's national grid, providing a stable power supply locally in the Lake Victoria Zone and nationally.
The initiative was unveiled at the Global Gateway Forum, a prestigious event attended by government representatives from the European Union and across the globe. The forum serves as a platform for key stakeholders, private sector entities, civil society, financial institutions, and international organizations to promote global investment in infrastructure.
This significant investment announcement not only underscores the tangible impact of the Global Gateway strategy but also marks a monumental step towards fostering sustainable growth and resilience worldwide through a united Team Europe approach.