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The African Development Bank, the French Development Agency (AFD) and the European Union (EU) have agreed to provide $300m in loans to the government of Tanzania to build the 87.8MW Kakono hydropower plant.

Tanzania is chiefly dependent on hydropower and gas-fired thermal power plants for its electricity generation.

By using the considerable untapped potential of renewable energy, the country will be able to meet the rapidly growing demand for energy using low-carbon methods.

The AfDB and the AFD have agreed to provide $161.47m and €110m ($121.2m) for the project respectively, and the EU has made a grant of €36m ($39.6m).

The Kakono will be a run-of-river hydropower project with an annual energy generating capacity of 573GWh.

The project is being developed by Tanzania’s Electric Supply Company (TANESCO) and is expected to reduce greenhouse gas emissions by 216,065t per year.

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By GlobalData

Operational by the end of 2026, the Kakono will generate enough clean energy to serve 4 million people and expand its service coverage to around 7% of the country’s population.

The project is also expected to have a significant impact on the region’s economic development, boosting industrialisation and economic growth both in Tanzania and in neighbouring countries.

African Development Bank Tanzania manager Patricia Laverley stated: “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. 

“The economic benefits derived from the supply of affordable power will be immense. We can expect to see marked improvement in the quality of life for people in the Kagera region and in Tanzania more broadly. These tremendous gains will contribute to building a more competitive economy in Tanzania, under the leadership of President Samia Suluhu Hassan.”