By Favour Nnabugwu

Tanzania and the African Development Bank (AfDB) signed a loan agreement for a total of $161.47 million (or about Sh374.9 billion) to be used in financing the Kakono Hydropower Project in Kagera.

The 87.8 MW project, whose total cost exceeds Sh700 billion, is also financed by the European Union (EU) and the French Development Agency or Agence française de développement (AFD).

The government signed an agreement with the AFD on its portion of the deal, totaling 110 million euros, just one week prior to yesterday’s new development, according to Finance and Planning Minister Mwigulu Nchemba, who spoke during the signing ceremony (about Sh272.6 billion).

The 35 million euro (Sh86.7 billion) grant from the EU, which will be managed by AFD, is the final amount of the total project cost that has not yet been agreed upon.
Following this important milestone, I request the grant arrangement between AFD and EU to be expedited in order to have the full package of financing ready for the project,” Dr. Nchemba, stated.

He emphasized that increasing on-grid energy production from the least expensive renewable sources is the Kakono Hydropower Project’s overall development goal in order to address the electricity deficits in north-western Tanzania.

In the northwest corner of Tanzania, in the Lake Zone, where expensive diesel generators are frequently turned on to either supplement the grid supply or improve the quality of supply to avoid protracted blackouts and brownouts, the development of the project will replace the use of fossil fuels.

Dr. Nchemba predicts that the project will be finished in five years. It will entail building an 87.8 MW hydropower plant as well as a primary school, a health center, and a 28 km long asphalted access road that is part of the Project. He continued by saying that this will ultimately result in an improvement in the local communities standard of living.

He continued by saying that the project also entails the provision of evacuation facilities and the execution of the plan for environmental and social management and monitoring. The Third Five Year Development Plan (FYDP III) of the country and the broad plan of the Sixth Phase Government are both supported by the Kakono Hydropower Project.

Dr. Nchemba also added that the targeted objective is to create a competitive and industrial economy for human development by strengthening the business and investment-enabling environment, productive infrastructure, reliable access to energy, and systems for education and training