AfDB approves US million loan to build Malagarasi hydropower project in Tanzania
The African Development Bank (AfDB) has approved a US million loan to fund the construction of a 50 MW hydropower plant in western Tanzania.
When operational, the plant will provide reliable renewable energy to households, schools, clinics and small- and medium-sized enterprises in the Kigoma Region.
The Malagarasi Hydropower project has several components: a run-of-the-river hydropower plant facility; a 54- km, 132 kV transmission line that will connect to Tanzanias national grid; a distribution network expansion operation that includes rural electrification and last-mile connections; project management and contract administration support; and compensation and resettlement of affected persons.
Bank President Adesina Akinwumi noted that the approval of the project is a reflection of the Banks commitment to assist the Government of the United Republic of Tanzania to accelerate its transition to more inclusive and sustainable growth through the production of clean, reliable and affordable electricity.
The projects overall cost is estimated at US.14 million. The bulk of the funding (US million) will be sourced from the Bank Groups sovereign window, with an additional US million contributed by the Africa Growing Together Fund a co-financing fund with resources from the government of China that is administered by the Bank. The Government of Tanzania will provide the remaining US.14 million.
The hydropower plants expected average annual output of 181 GWh will meet the electricity needs of as many as 133,649 Kigoma households, bringing the regions electrification rate more closely in line with the rest of the country.
The project is expected to create about 700 jobs during construction, cut the regions electricity generation costs to approximately USsh.04/kWh from the current USsh.33/kWh, and also reduce reliance on greenhouse gas-emitting fossil fuels. The cost of doing business will also fall because industry will no longer need to maintain costly back-up generators.
The project aligns with Tanzanias national Development Vision 2025 and its Second Five-Year Development Plan (2016/17 2020/21) and complements other regional initiatives, including the North West Grid 400 kV Nyakanazi-Kigoma transmission line project, which the Bank is financing in parallel with the South Korea Economic Development Co-operation Fund.
The Malagarasi Project will also directly contribute to the Banks Light Up