The OPEC Fund for International Development said on 29th June it will provide a USD-60-million loan to support the construction of a power transmission line in Tanzania.
The 166-km overhead line will connect the Kagera region in the north-western part of the country to the national grid, replacing energy supply from Uganda with local hydropower.
The fund said that as a country bordering Lake Victoria, which is fed by the Kagera River, Tanzania has a significant renewables potential. Hydropower facilities at Rusumo and Kakono in its north-western region with a capacity of 80 MW and 87 MW are expected to come on stream in 2024 and 2030, respectively.
The new transmission line will reduce Tanzania’s dependence on energy imports and ensure improved power supply for one of its poorest regions. In addition, the increase of hydropower generation will enable the country to close costly and polluting back-up thermal power plants.
Several partners will participate in the financing of the project. The OPEC Fund will provide a USD-30-million loan, as a 1st tranche of a USD-60-million facility. It will be joined by the Abu Dhabi Fund for Development with USD 30 million, the Saudi Fund for Development with USD 12.8 million and the government of Tanzania with USD 2.6 million. Other backers are expected to finance a downstream distribution network that will connect many unserved communities to the grid, says the announcement.
