The Tanzanian government and AFD Group have just signed an agreement for the construction of a hydropower plant and dam in the Kagera region that will provide electricity to 3 to 4 million people and reduce greenhouse gas emissions.
Tanzania, which relies on hydropower and thermal power plants (mainly gas) for its electricity supply, has considerable untapped renewable energy potential. With the country's rapid growth – having grown by nearly 40% in the past ten years - the Tanzanian government intends to tap this potential to meet energy needs, while intensifying its low-carbon commitment.
88 additional megawatts
To support this trajectory, AFD Group is financing a new project that will increase renewable energy production capacity. It will provide the national grid with an additional 88 MW through the construction of a hydroelectric power plant and dam on the Kagera River and the development of related infrastructure (including upgrading the existing Kyaka substation and a new 39 km 220 kV transmission line). The capacity of Tanzania Electric Supply Company (Tanesco), the Tanzanian electricity operator, will also be strengthened.
This project is the result of close collaboration with other co-financiers. In addition to AFD's €110 million loan, the African Development Bank and the European Union are expected to weigh in with a loan of $161 million and a grant of €36 million respectively.
Positive impacts for the climate and the economy
The Kakono project is an example of climate and biodiversity commitment. It is expected to reduce greenhouse gas emissions by 216,000 tCO2/year. And thanks to its location in a new watershed less affected by droughts, the risk of water shortages to operate the plant is limited. With regard to biodiversity, an "environmental and social management program" will be implemented. In line with the most rigorous international standards, it will include conservation measures for a species of fish, the ningu (or Labeo victorianus), thanks to the EU grant delegated to AFD.
The project will have a major impact on the economic development of this fast-growing zone located in the heart of the Great Lakes region. It is expected to stimulate growth not only in Tanzania, but also in neighboring countries.
