AfDB grants Tanzania $140m loan for hydropower project

Friday May 28 2021
Power plant.

A power plant. Tanzania is set to receive a $140 million loan from the African Development Bank Group (AfDB) to finance a hydropower project. PHOTO | FILE | NMG


Tanzania on Friday signed loan agreements with the African Development Bank Group (AfDB) totalling $140 million to finance power generation and electricity connectivity.

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 50-megawatt Malagarasi hydropower plant in western Tanzania and an evacuation transmission line, as well as to add 4,250 rural electrification connections.

The project aims at 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, signed the agreements.

“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,” said Mr Tutuba.


He lauded Tanzania’s cordial relationship with AfDB that goes all the way back to 1964. He noted that the country was a proud founding shareholder that regards the Bank as a “development partner of choice.”

The hydropower project is one of Tanzania’s priorities under its Second Five-Year Development Plan and will advance the objectives of 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 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,” said Nwabufo.

The project is one of six transformative infrastructure projects, with a total value of $1.12 billion, which the AfDB 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 Africa Growing Together Fund is a facility sponsored by the People’s Bank of China and administered by the African Development Bank.