The government of Tanzania, the African Development Bank (AfDB), and the French Development Agency (AFD) have signed agreements for two development project loans worth $300 million to finance the construction of the Kakono Hydropower Plant in the Kagera region of Tanzania. The European Union (EU) has also granted €36 million for the project.

The Kakono Hydropower Project is intended to increase renewable generation capacity and reduce hydrological risk via a dam located on a new watershed that is less affected by droughts.

Tanzania currently relies on hydropower and thermal power plants, mainly gas-fired, for its electricity supply. However, the Kakono Hydropower Project, which will be implemented by Tanzania’s Electric Supply Company (TANESCO), will reduce greenhouse gas emissions by 216,065 metric tons per year and comply with international environmental and social standards. The project is expected to serve four million people and increase the service coverage rate by around 7% of the population, as well as to spur economic growth in Tanzania and the neighboring countries.

Alongside the construction of the new hydropower plant, associated infrastructure will also be built, including the upgrading of the existing Kyaka substation and a new 39-kilometer 220-kilovolt transmission line, and capacity building support for TANESCO. The project is a result of close collaboration between the African Development Bank, the Agence francaise de developpement, and the European Union.

Following the signing ceremony in Dar es Salaam, participants expressed their support for the project. African Development Bank Country Manager for Tanzania, Patricia Laverley, observed that the Kakono Hydropower Plant would help to improve TANESCO’s financial sustainability and improve the quality of life for people in the Kagera region and in Tanzania more broadly. The French ambassador to Tanzania, Nabil Hajlaoui, expressed France’s readiness to invest in power generation and transmission projects to meet the rapidly growing electricity demand while reducing the carbon intensity of its energy mix. AFD Country Director, Celine Robert, noted that the investment would have a major impact on economic development and population well-being.