The government of The United Republic of Tanzania is committed to improving the country's power supply, and it has received support from various development stakeholders. Recently, the government signed a loan agreement worth $161.47 million (TZS374.9 billion ) with the African Development Bank (AfDB) to fund the implementation of the Kakono Hydropower Project (Kakono HPP) in the Kagera region. This project aims to increase access to reliable, affordable and sustainable electricity in the region, which will contribute to the country's economic growth and development.
Dr. Nchemba said that the government had requested the African Development Bank (AfDB) and the French Development Agency (AFD) to provide financing for the project. This initiative aims to provide reliable electricity to the residents of the Lake Zone.
Another key stakeholder supporting the implementation of the project is The European Union. The EU gave a grant of nearly 35 million (TZS86.7 billion) for the project. The agreement for the grant was signed at the TZ-EU Business Forum which was held for two days on 23rd February and 24th February.
“We are happy that on March 7th, 2023, the government signed an agreement with AFD on its portion amounting to 110 million USD (TZS272.6 billion) and today we have just signed a loan agreement with AfDB amounting to 161.47 million US dollars (TZS374.9 billion),” said Dr. Nchemba.
“As you might be aware, the Lake Zone is a highly productive area demonstrated by the fact that it accounts for the largest share of the value of minerals and fish traded in Tanzania, which also demand a cost-efficient and reliable source of power,” he said.
Dr. Nchemba said the development of Kakono HPP will displace the use of fossil fuels in the north-western of Tanzania, where costly diesel power generators are often brought online to either supplement the grid supply or improve the quality of supply to avoid prolonged blackouts and brownouts.
The Kakono HPP aligns with the goals of the Third Five-Year Development Plan (FYDP III) and is part of the sixth phase of the government broader agenda to foster a competitive and industrial economy that promotes human development. This objective is being pursued by enhancing productive infrastructures, ensuring reliable access to energy, strengthening the business and investment enabling environment, and improving education and training systems
The minister said the project will be completed in five years and will involve the construction of an 87.8 MW hydropower plant and other works, including a primary school, health centre and improving the living standard of the communities around there.
He said the government will continue working closely with the AfDB, AFD and the EU to strengthen the development cooperation.
The AfDB Tanzania Country Manager, Dr. Patricia Laverley, expressed her satisfaction with the government's demonstrated capacity commitment in the past.
“The Kakono Hydropower loan agreement which we have signed today demonstrates our commitment as development partners in supporting Tanzania’s development aspiration of becoming an upper middle–income country,” she said.
She said the AfDB total active portfolio in Tanzania is 2.7 billion US dollars (TZS 6.3trillion), of which 86 percent was in energy, water, sanitation and transport.
Dr. Laverley insisted that AfDB will remain a committed partner in achieving the country’s development aspirations working with the government to ensure the successful implementation of the entire active project in our portfolio,”
On his part, the EU Delegation, Head of cooperation to Tanzania, Mr. Cedric Merel said the contribution of the EU’s 35 million Euro grants will provide the indispensable elements of technical assistance, environmental studies and capacity building.
“The project will add 87,8MW to Tanzania’s national grid and will reduce GHG emissions by 213,810 tons per year, therefore a significant contribution to economic development and to climate change adaptation,” said Merel.