Tanzania has been granted a loan of $123.39 million to finance part of the country’s North-West Grid 400kV Nyakanaz–Kigoma power transmission line project.
The multilateral development finance institution, the African Development Bank (AfDB) approved the funding.
The project aims to improve reliability, supply, and affordability of electricity in the Kigoma Region in north-western Tanzania by providing main grid access for the socio-economic transformation of the region in line with the country’s 2025 vision.
It will increase electricity access from 16.2% to 20% in the region with over 483,000 households by 2024.
Audit and Consultancy services, as well as compensation and/or resettlement of people affected by the project, will also be implemented.
The project will be financed from three sources, the AfDB loan, the South Korea Economic Development Co-operation Fund and the government of Tanzania. The funds, which represent 66%, 24% and 10% respectively of the overall cost, is estimated at $186.12 million.
The power transmission line project will lower energy production costs by decommissioning expensive diesel-powered plants in Kasulu and Kigoma urban centres including surrounding areas.
In addition to enhancing job creation, the project is expected to reduce greenhouse gas emissions in northwestern Tanzania.
Furthermore, it will complement the ongoing Bank-funded 220 kV Rusumo-Nyakanazi regional transmission line including the multinational 80MW Rusumo Hydro Power Plant as well as other development partner supported energy infrastructure programmes in northwestern Tanzania.