World Bank credit includes Tanzania power sector improvements

The World Bank has approved a total US$232 million in credits to Tanzania to support the government’s strategy for economic growth and poverty reduction.

The bank said US$190 million will go jointly to mainland Tanzania and the semi-autonomous archipelago of Zanzibar, to boost the power sector, improve education, reduce child and maternal deaths, and increase access to clean water. The rest will go to Zanzibar.

The World Bank said some of the money would go to strengthen the power sector, in which 2006 drought-related power shortages highlighted weaknesses in: management of the power sector; financial soundness of Tanzania Electricity Supply Co. (TANESCO); and the efficiency of Tanzania’s power generation, transmission, and distribution systems.

With a grant administered by the World Bank, the government earlier this year recruited consultants to help select private sector mini-grid and small power projects, including mini-hydro projects. (HNN 1/26/07) The government sought services for preparation of legal, contractual, and procedural documentation for the award of mini-grid and small power projects carried out by the private sector.

The government projects the east African country’s economy to grow by between 7 and 8 percent this year, up from 5.9 percent in 2006, when the electricity shortage led to massive power cuts that slowed economic activity.

“The credit is expected to help the government sustain growth around 6 to 8 percent annually which is projected to result in significant reduction of poverty,” the bank said April 24. “It will also help the government … increase school enrollment and literacy rates, reduce child and maternal mortality, increase access to safe water, and strengthen the sustainability of development efforts.”

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