Tanzania will be getting a $455 million loan from the World Bank under its International Development Assistance (IDA) programme to support the financing of power projects in the East African country. This was made known by the World Bank after the loan was approved.
“The $455 million credit will finance construction of critical high voltage transmission infrastructure that will support the electrification of the southern and northwestern regions of Tanzania,” the World Bank said in a statement on Thursday.
This grant or low-interest loan financing from IDA will be used to fund the construction of high voltage transmission infrastructure. This infrastructure will connect Tanzania to other markets in southern and eastern Africa.
Despite having abundant energy sources, access to electricity has remained one of the major challenges in Tanzania. Over the years, investors have been affected by lack of reliable power supply which has hurt their businesses greatly.
According to Reuters, the government said it plans to raise 2 trillion Tanzanian shillings ($880 million) in its budget for fiscal year 2018/19 (July-June) from concessional loans and grants to finance development projects.
Despite facing periodic power shortages due to its reliance on hydropower dams in a drought-prone region Tanzania still boasts of having reserves of over 57 trillion cubic feet (tcf) of natural gas.
The President of Tanzania, John Magufuli, last year said the country needs about $46.2 billion over the next 20 years to revamp its deteriorating energy infrastructure and meet the growing demand of electricity in the country.
The energy ministry of the East African country also revealed that the country plans to boost power generation capacity from around 1,500 MW currently to 5,000 MW over the next three years by building new gas-fired and hydroelectric plants
According to the World Bank development indicators, 32.8 percent of Tanzanians accessed electricity in 2016. The rates of access to electricity in other East African countries was 56 percent in Kenya, 29.4 percent in Rwanda, 26.7 percent in Uganda and 7.6 percent in Burundi.
The major sources of hydro generation power plants in Tanzania are in Iringa, Morogoro, Dodoma, Tanga and Kilimanjaro.