AfDB approves loan for 50-MW run-of-river HPP project in Tanzania

The African Development Bank (AfDB) said that its board of directors has approved a USD-120-million (EUR 100.6m) loan to finance the construction of the Malagarasi hydro-power plant (HPP) project in Western Tanzania.

The project will involve the construction of a 50-MW run-of-the-river HPP, a 54-kilometre long 132-kV transmission line, a distribution network expansion, including rural electrification and last-mile connections. Resettlement and compensation for people affected by the project will also be required, according to the bank’s press release.

The Malagarasi project will cost around USD 144.14 million. Besides AfDB’s contribution, additional USD 20 million will come from the Africa Growing Together Fund, a co-financing fund sponsored by the Chinese government and administered by the bank. The government of Tanzania will provide USD 4.14 million.

The plant will be located in the Kigoma region. Its average annual output is estimated at 181 GWh, which would be enough to meet electricity needs of over 133,600 Kigoma households.

With Malagarasi in operation, the Kigoma region stands to cut the electricity generation costs to about USD 0.04/kWh from the current rate of USD 0.33/kWh. The cost of doing business is also expected to drop since local industry will no longer need to maintain costly back-up generators, AfDB added.

(USD 1.0 = EUR 0.839)

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