EU, AFD to disburse 384.7bn/- for Kakono power plant

TANZANIA: AGENCE Française de Développement (AFD) signed a contract to, jointly with European Union EU), finance the construction of the 87.8-megawatt Kakono hydropower plant in Kagera Region.

A statement issued by the European Union Delegation in Tanzania on Thursday, through the agreement signed at the Global Gateway Forum in Brussels, the EU and the AFD will jointly contribute €146 million (about 384.7bn/-) of the total cost of €296 million (about 780bn/-) of the project.

“The recent, first-ever Tanzania–EU Business Forum saw investments worth €1 billion being announced, notably the Kakono hydropower project. I am pleased to follow up with today’s signature, with the EU contributing to Tanzania’s efforts to diversify its energy sources and bring green energy into the mixin line with the Global Gateway Investment Package for Africa,” Commissioner for International Partnerships Jutta Urpilainen is quoted as saying.

Out of €146 million (about 384.7bn/-) to be dished by the EU and the AFD into the project, the European Union EU will invest €36 million (about 95bn/-) in grants. The African Development Bank (AfDB) will also finance the project which is worth €296 million (about 780bn/-) in total.

The proposed Kakono hydropower plant, approximately 90 km west of Bukoba Municipality in the north-western corner of Tanzania, will be situated downstream of the three sites, namely, Rusumo, Murongo/Kikagati and Nsongezi along the Kagera River.

It is one of the energy sectoral interventions under the “economic growth” pillar of FYDP III to realise an inclusive and competitive economy by increasing the generation capacity to improve the availability and reliability of electricity supply.

The Kakono HPP, together with the ongoing and planned projects in the north-western part of the country, are expected to contribute to increased renewable energy production, thereby displacing the costly diesel generators while, at the same time, improving TANESCO’s financial health.

It will also address the deficits of electricity particularly in Kagera, Geita and Mwanza regions in the Lake Zone.

The long-standing cooperation between the EU and Tanzania focuses on the three priority areas of green deals, human capital and employment and governance.

The hydropower plant will respond to the increasing demand for generation capacity in northern Tanzania and provide a stable supply of power locally in the Lake Victoria Zone and nationally.

It will add 87.8MW to Tanzania’s national grid and reduce greenhouse gas emissions by 213,810 tonnes per year, contributing significantly to both economic development and climate change adaptation.

The Global Gateway Forum brings together an assembly of government representatives from the European Union and across the globe, alongside key stakeholders from the private sector, civil society, thought leaders, financial institutions and international organisations to promote global investment in infrastructure.

During this landmark occasion, a series of strategic investment announcements and agreements with partner countries are being presented, marking a significant leap towards the implementation of the Global Gateway strategy. These announcements not only underscore the tangible worldwide impact of Global Gateway but also provide a platform for governments and businesses to engage in critical discussions surrounding its priorities.

The Global Gateway Forum highlights a collective commitment to fostering sustainable growth and resilience worldwide through a Team Europe approach.

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