Tanzania to receive $123 million African Development Bank loan to finance power transmission line project

The African Development Bank approved on Friday 20 July 2018, a loan of US$ 123.39 million to the United Republic of Tanzania to finance part of the country’s North- West Grid 400 kV Nyakanaz – Kigoma power transmission line project.  

The project will be completed by 2024. It involves the Construction of a 280-km 400 KV transmission line from Nyakanazi to Kigoma;  Extension of Nyakanazi substation and construction of a new substation at Kigoma;  Integration of existing Kigoma and Kasulu 33 KV distribution networks with the main grid including supply of last-mile connection materials to serve at-least 10,000 new consumers in Kigoma Region.  Consultancy and Audit Services as well as Compensation and/or resettlement of people affected by the project will also be implemented.

The project aims to improve supply, reliability and affordability of electricity in Kigoma Region in North-western Tanzania by providing main grid access for the socio-economic transformation of the region in line with Tanzania Vision 2025.

It will increase electricity access from 16.2% to 20% in the region with over 483,000 households by 2024.

The project will lower energy production costs by decommissioning expensive diesel-powered plants in Kigoma and Kasulu urban centres including surrounding areas. In addition to enhancing job creation, the project will reduce greenhouse gas emissions in north western Tanzania.

Furthermore, it will complement the ongoing Bank-funded 220 kV Rusumo-Nyakanazi regional transmission line including the multinational 80 MW Rusumo Hydro Power Plant as well as other Development Partner supported energy infrastructure programmes in north western Tanzania.

The North-West Grid transmission line project  is aligned with the Bank’s Ten Year Strategy (2012 – 2022) and the High Five priorities, especially Light-up & Power Africa  and  New Deal on Energy for Africa which aim to achieve Universal Access to Energy in regional member countries. Also, the project is in line with the Bank’s Tanzania Country Strategy Paper (2016-2020) which focuses on infrastructure development.

The project will be financed from three sources, namely, the Bank loan, South Korea Economic Development Co-operation Fund and the Government of Tanzania contributing approximately, which represent 66%, 24% and 10% respectively of the overall cost estimated at US$186.12 million.

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