The government of Tanzania, the African Development Bank (AfDB), and the French Development Agency (AFD) have signed agreements for two development project loans worth $300 million. The funds will finance the construction of the 87.8-megawatt Kakono Hydropower Plant located in Kagera region in the northern part of Tanzania. The project also received a grant of €36 million from the European Union.
Tanzania is dependent on hydropower and thermal power plants – mainly gas-fired – for its electricity supply. However, it has considerable untapped renewable energy potential to meet its rapid growth while taking a low-carbon path.
A coalition of development partners are financing the Kakono Hydropower Project, intended to increase renewable generation capacity and reduce hydrological risk via a dam located on a new watershed that is less affected by droughts. The signing ceremony took place on March 15, 2023, in Dar es Salaam.
The Kakono Hydropower Plant is the result of close collaboration between the African Development Bank, Agence francaise de developpement, and the European Union. These institutions are co-financing this project with a $161.47 million African Development Bank soft loan, a €110 million soft loan from French Development Agency, and €36 million grant from the European Union
The Kakono Hydropower Project which will be implemented by Tanzania’s Electric Supply Company (TANESCO), will reduce greenhouse gas emissions by 216,065 metric tons per year, and comply with the best international environmental and social standards.
The project will serve four million people and increase the service coverage rate by around 7% of the population. It is expected to have a major impact on the economic development of this rapidly growing zone, which lies at the heart of the Great Lakes region. This project will boost industrialisation and spur economic growth in Tanzania and the neighboring countries and will strengthen Tanzania’s leading position within the East African Community.
Alongside construction of the new hydropower plant, there will also be associated infrastructure built, including the upgrading of the existing Kyaka substation and a new 39-kilometre 220-kilovolt transmission line, and capacity building support for TANESCO.
