AFDB Approves $140 Million Loan to Tanzania
The African Development Bank Group and the Government of Tanzania have signed loan agreements totalling $140 million to finance the construction of the 50-megawatt Malagarasi hydropower plant in Western Tanzania.
The agreements cover a $120 million sovereign loan from the Bank and $20 million from the Africa Growing Together Fund (AGTF), administered by the Bank.
The funds will be used to construct the plant and an evacuation transmission line and add 4,250 rural electrification connections, providing reliable renewable energy to households, schools, clinics, and small and medium-sized enterprises in the Kigoma Region.
Emmanuel Tutuba, the Tanzanian permanent secretary in the Ministry of Finance and Planning, and Nnenna Nwabufo, the director-general of the Bank Group’s East Africa Regional Development and Business Delivery Office, expressed his gratitude when signing the agreement.
“I would like to re-affirm the government’s commitment to working closely with the Bank in efforts to realise our national and international development aspirations. The government will take all necessary measures to ensure successful implementation of this project as planned,” Mr Emmanuel Tutuba.
The hydropower project is one of Tanzania’s priorities under its Second Five-Year Development Plan and will advance the country’s Vision 2025.
It also aligns with two of the Bank’s High Five strategic priorities, namely, Light up and Power Africa and Improve the quality of life for the people of Africa.
The project is one of six transformative infrastructure projects, with a total value of $1.12 billion, that the African Development Bank has approved in Tanzania over the last three years.
The Bank Group’s total ongoing commitment in Tanzania, about $2.33 billion in value, covers the key sectors of transport, energy, water supply and sanitation, agriculture, governance and finance.
“The signing of the loan agreements is another testimony of our joint commitment to working together to support Tanzania’s development aspirations. Malagarasi Hydropower is one of the flagship projects in Tanzania’s Second Five-Year Plan. We appreciate the trust the Government has put in the African Development Bank and we are committed to remaining a privileged and trusted partner of choice.” Nnenna Nwabufo, Director General of the Bank Group’s East Africa Regional Development and Business Delivery Office.
The hydraulic project is also expected to create jobs, reduce the production cost of electricity in the region and reduce the exploitation of fossil fuels.