Tanzania receives US $140M for Malagarasi hydropower plant

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Tanzania has received a US $140m loan from the African Development Bank (AfDB) for the Malagarasi hydropower plant project.

Emmanuel M. Tutuba, Permanent Secretary at the Tanzania Ministry of Finance and Planning confirmed the report and said the US $140M consists of a US $120M sovereign loan from the Bank and US $20M from the Africa Growing Together Fund, a facility sponsored by the People’s Bank of China and administered by the AfDB.

“I would like to re-affirm the government’s commitment to working closely with the Bank in efforts to realise our national and international development aspirations,” said Mr. Tutuba.

Also Read:Tanzania: US$ 120M loan approved towards implementation of Malagarasi Hydropower project

Tanzania’s National Development Vision 2025

The Malagarasi Hydropower project consists of the construction of a run-of-the-river hydropower facility and a 54- km-long 132-kV transmission line that will connect to Tanzania’s national grid. It also consists of the expansion of a distribution network operation which includes rural electrification and last-mile connections.

The funds will be used to construct the plant and an evacuation transmission line, as well as to add 4,250 rural electrification connections for households, schools, clinics and small and medium-sized enterprises in the Kigoma Region. The project’s overall cost is estimated at US $144.14M. The government of Tanzania will provide the remaining US$ 4.14M.

The project is expected to create about 700 jobs during the phase of construction, cut the region’s electricity generation costs to about $0.04/kWh from the current $0.33/kWh upon completion, and reduce reliance on greenhouse gas-emitting fossil fuels.

The Malagarasi Hydropower project aligns with Tanzania’s National Development Vision 2025 and its Second Five-Year Development Plan (2016/17 – 2020/21). It also complements other regional initiatives, including the North West Grid 400-kV Nyakanazi-Kigoma transmission line project, which the AfDB is financing together with the South Korea Economic Development Co-operation Fund, administered by the Export-Import Bank of Korea and the Ministry of Strategy and Finance.