OPEC Fund for International Development and partners have partnered for installation of Power transmission line northwest Tanzania. The project will include the construction of a 166km overhead transmission line connecting the Kagera region to the national grid. Importantly, the line will replace the current energy supply from Uganda with local hydropower resources.
Additionally, Tanzania has enormous potential in the field of renewable energy. Tanzania is investing heavily in expansion of its hydropower capacity with plants under development at Rusumo and Kakono in its northwestern region. The two new hydropower plants will be operational in 2024 and 2030 with nominal capacity of 80 MW and 87 MW, respectively.
The financing of the project will be shared among several partners: The OPEC Fund with a US$30 million loan, as a first tranche of a US$60 million facility. Moreover, Abu Dhabi Fund for Development (US$30 million), Saudi Fund for Development (US$12.8 million) and Tanzania government with US$2.6 million. Additionally, other backers are set to finance a downstream distribution network that will connect many unserved communities to the grid.
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Importance of the new power line
The construction of the new transmission line will allow Tanzania to reduce its dependence on energy imports. Importantly, this diversification will enhance energy security and save costs by eliminating need to pay for imports in foreign currency. Furthermore, the expansion of hydropower generation will allow the country to shut expensive and polluting back-up thermal power plants. Noteworthy, this project will lead to a cleaner and cheaper energy sector in Tanzania.
Northwest Tanzania’s Kagera region is one of the country’s poorest with average income less than half the national average. With the regional economy dominated by agriculture, improved power supply will allow other sectors to establish themselves in the region and help to fulfil its potential.
