The African Development Bank (AfDB) will loan the government of Tanzania $140 million to finance construction of the 50-MW Malagarasi hydropower plant.
The agreement will cover a $120 million sovereign loan from the bank, plus $20 million from the Africa Growing Together Fund, administered by the bank.
The money will be used to construct the Malagarasi plant in Western Tanzania, with an evacuation transmission line to Kigoma. It should also cover the 4,250 rural electrification connections, which will provide reliable renewable energy to domestic households, schools, clinics and small to medium-sized enterprises in the Kigoma region.
A substation will be constructed at Kidahwe in the Kigoma region and the transmission line will align from Malagarasi to Mazungwe (20 km) in a 20-m-wide corridor acquired by Tanzania Electricity Supply Company (TANESCO) under the Millennium Challenge Account (MCA) and from Mazungwe to Kidahwe (33 km), aligned in a new wayleave to be acquired by the project.
From the new Kigoma substation, several 33-kV feeders will be constructed to feed power to Kasulu, Uvinza, Buhigwe and Kigoma. Currently, Kigoma and Uvinza get power from the diesel plant located at Kigoma, while Kasulu and Buhigwe receive power from the Kasulu diesel plant.
The project is one of Tanzania’s priorities under its Second Five-Year Development and it will advance the objectives of the country’s Vision 2025. It also aligns with two of AfDB’s High Five strategic priorities.
Nnenna Nwabufo, AfDB director general of the East Africa regional development and business delivery office, said signing of the loan agreement is testimony to their commitment to working together with Tanzania to support the country’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,” Nwabufo said.
The project is one of six transformative infrastructure projects, with a total value of $1.2 billion, that AfDB has approved in Tanzania over the past three years. The Bank Group’s total ongoing commitment in Tanzania, of 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 AfDB.