The Tanzanian government signed a loan agreement of 161.47 million US dollars with the African Development Bank (AfDB), to implement the Kakono Hydropower Project (Kakono HPP). The approximate cost of execution of the Kakono HPP is 325 million US dollars.
The Tanzanian government signed a loan agreement of 161.47 million US dollars with the African Development Bank (AfDB), to implement the Kakono Hydropower Project (Kakono HPP). The approximate cost of execution of the Kakono HPP is 325 million US dollars. Minister for Finance and Planning, Dr Mwigulu Nchemba said the remaining portion not signed out of the total project cost is a grant from the European Union (EU), which will be administered by AFD amounting to 35 million Euro. Dr Nchemba requested the grant arrangement between AFD and EU to be expedited in order to have a full package of financing ready for the project.
The overall development objective of Kakono HPP is to increase on-grid energy production from the least-cost renewable sources to address electricity deficits in north-western Tanzania. Dr. Nchemba said the government had requested AfDB and the French Development Agency (AFD) to consider financing the project to enable the Lake Zone residents to get reliable electricity.
The Lake Zone is a highly productive area demonstrated by the fact that it accounts for the largest share of the value of minerals and fish traded in Tanzania, which also demand cost-efficient and reliable sources of power. However, the zone had been characterised by the use of diesel power plants and operational inefficiencies such as high network losses. The development of Kakono HPP will displace the use of fossil fuels in north-western 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.
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Kakono HPP is in line with Third Five-Year Development Plan (FYDP III) and part of a broad agenda of the sixth phase of government that seeks to build a competitive and industrial economy for human development through improving productive infrastructures, reliable access to energy, strengthening the business and investment enabling environment as well as education and training systems. The project is also well aligned with the current AfDB’s Country Strategy Paper 2021-2025 for Tanzania and operational priorities commonly known as High Fives, particularly industrialising Africa, feeding Africa, and improving the quality of life for the people of Africa as well as AFD priorities.
