Tanzania Hydropower Project Secures Financing
Patricia N. Laverley, AfDB Tanzania country manager, Mwigulu L. Nchemba, minister of finance and planning of the United Republic of Tanzania and Saada Mkuya, minister in the President’s office responsible for finance from the Revolutionary Government of Zanzibar, signed the agreement in Dar es Salaam.
Photo Courtesy African Development Bank
The effort to build the 87.8-MW Kakono hydropower plant in Tanzania has secured $300 million in financing from the French Development Agency and the African Development Bank, paving the way for the engineering, procurement and construction phase to begin.
A financing agreement between Tanzania and the project's co-financiers—the African Development Bank, Agence Francaise de Developpement and the European Union was signed in mid-April. The lenders are providing soft loans of $161.47 million and $121.2 million respectively, while the EU is offering a $39.5-million grant.
The power plant, located on the 371-mile long Kagera River in northern Tanzania, about 56 miles west of Bukoba Municipality, will enable national power utility Tanzania Electric Supply Co. (Tanesco) to increase electricity from renewable energy sources and replace costly diesel power generators. Tanesco owns the largest share of Tanzania’s transmission and distribution network, and more than 50% of its generating capacity.
Currently, Tanzania's installed capacity is estimated at 1,602 MW—comprised of hydroelectric (568 MW), thermal (951.6 MW) and other renewables (82.4 MW). Natural gas accounts for 48% of electricity generation while hydropower, diesel, solar and biofuels make up 31%, 18%, 1% and 1% respectively.
“The construction of the new power plant will help to improve Tanesco's financial sustainability arising from the decommissioning of the diesel-based power plants in the Kagera Region,” said Patricia Laverley, African Development Bank country manager for Tanzania in signing the loan agreement.
Benefits of the project include supplying electricity to 4 million people, expanding the electricity connection rate by 7%, increasing service coverage rate by about 7% and boosting industrialization and economic growth in Tanzania.
It is estimated that the Kakono project will reduce Tanzania's greenhouse gas emissions by 216,065 metric tons annually and help the power utility improve its financial status. The state-owned company now grapples with a substantial debt of $1.24 billion, according to Tanzania's Controller and Auditor-General Charles Kichere.
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The new power plant will comprise a 284-m long, 60-m high, roller-compacted concrete gravity dam and a 1,380-m long rockfill dam on its left and right abutments, according to UK-based environmental consultant SLR Consulting, which completed an environmental and social impact assessment report for the project.
The dam will also have a 35-km-long reservoir with a storage capacity of 150 million cubic meters over an area of 17,000 acres. Two Kaplan turbine units, with a capacity of 312 cubic-meters-per-second, will also be installed.
The dam's gated spillway will have three gates and a maximum flow rate of 1,240 cubic meters, which the SLR Consulting assessment says is the “maximum probable flood" for the dam. A 220-kV switchyard and a 24-mile-long 220 kV power transmission line will also be constructed to tie into the existing substation in Kyaka.
Work is set to start this year, although no specific timeline has been confirmed. Construction has an estimated 52-month timeframe, with transmission line work expected to take 21 months.
