- Tanzania signs 161.47 million US dollars to implement Kakono HPP in Lake Zone
- European Union (EU) to chip in additional 35 million Euro for Kakono HPP
- Kakono HPP will take five years to complete, feature a primary school, health centre
The government of Tanzania has secured funding for the Kakono Hydropower Project (Kakono HPP). The project is in line with the country’s Third Five-Year Development Plan (FYDP III) and aligns with President Samia Suluhu’s plan to foster a competitive industrial economy.
The Lake Zone, in the north-western part of Tanzania, is one of the country’s highest fossil fuel consuming region due to the low coverage by the national electricity grid. The region uses diesel generators making the region expensive for investors and residents.
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With assistance from the African Development Bank (AfDB), the government of Tanzania has recently signed a loan agreement of $161.47 million to implement Kakono HPP.
This is a major chunk of the needed $325 million to complete the project. The rest of the funding will come from an agreement with the French Development Agency (AFD) for the provision of $110 million a deal that was inked earlier this month on March 7th, 2023.
As for the remaining funding, Tanzania is looking towards grant funding from the European Union (EU) to the tune of 35 million Euro.
In his speech at the signing ceremony in the commercial port city of Dar es Salaam, Tanzania’s Minister for Finance and Planning, Dr Mwigulu Nchemba said the Kakono HPP will increase the Lake Zone access to on-grid energy and resolve power deficits across north-western Tanzania.
“The Lake Zone is a highly productive area, it accounts for the largest share of the value of minerals and fish traded in Tanzania,” the Minister said citing the fact that to realize the potential of the region, then the need for cost-efficient and reliable source of power is critical.
“Development of Kakono HPP will displace the use of fossil fuels in the north-western part of Tanzania, where costly diesel power generators are often brought online to either supplement the grid supply or improve the quality of supply to avoid prolonged blackouts and brownouts,” the Minister explained.
The minister also reaffirmed the project implementation period which he placed at an estimated five years. He said, once the funding is ready, the project will involve the construction of an 87.8 MW hydropower plant, a primary school, and a health center.
The new HPP will result in the improvement of the living standards of communities in the vicinity of the plant and the wider Lake Zone Region.
“With a strong relationship, we shall be able to achieve our national and international development aspirations,” the Minister said noting that the project is aligned along with the AfDB’s Country Strategy Paper 2021-2025 for Tanzania.
The AfDB has what it refers to as the High Fives, these are the bank’s operational priorities that include industrialization, food and Africa, and overall improvement of the quality of life for the people of Africa..
In her comments, the AfDB Tanzania Country Manager, Dr. Patricia Laverley expressed the bank’s satisfaction in what she described as ‘the capacity commitment that the government of Tanzania has demonstrated.’
“The Kakono Hydropower loan agreement which we have signed today demonstrates our commitment as development partners in supporting Tanzania’s development aspiration of becoming an upper middle-income country,” she told a press conference at the signing event.
The AfDB Tanzania Country Manager was also proud to point out that currently, the bank’s total active portfolio in Tanzania is $2.7 billion. 86 per cent has gone to fund key infrastructure development areas including energy, water, sanitation, and transportation.
“We will work with the government (of Tanzania) to ensure the successful implementation of the entire portfolio of active projects,” Dr. Loverley pledged the bank’s commitment to Tanzania.
Seconding the commitment was AFD Country Director in Tanzania, Ms. Celine Robert who described the signing of the agreement as “…a new milestone in the important work and efforts of the country to achieve its vision 2025 for the energy sector.”
“AFD is proud to contribute to a project that is fully in line with international climate objectives and AFD’s strong commitments in that regard,” the AFD country director said.
Robert was keen to highlight that the project will operate in full compliance with the best international standards and meet all environmental requirements as well as observe all social risk safeguards.
“The energy sector is our most important sector of intervention with six projects for a total of half a billion Euros,” Robert said.
“The AFD will continue to invest in the energy sector depending on the government’s demand and in line with France’s country strategy,” assured Robert.
European Union (EU) Head of Delegation to Tanzania and East Africa, Cedric Merel, said the EU’s 36 million Euro grant money that is due to complete the funding for the project will be disbursed with no fail or delay.
“The project will add 87,8MW to Tanzania’s national grid and will reduce GHG emissions by 213,810 tons per year, therefore a significant contribution to economic development and to climate change adaptation,” the diplomat summed up.
Merel said the funding will provide what he described as “indispensable elements of technical assistance, environmental studies, and capacity building.”