TANESCO Granted Loan from European Investment Bank

The Tanzania Electricity Supply Company (TANESCO) is set to receive a USD 135 million loan from the European Investment Bank (EIB) in order to co-finance a new 667 km high voltage transmission line that is to be built between Iringa and Shinyanga in Tanzania as a part of the Tanzania Backbone Interconnector Project.

The Tanzania Backbone Interconnector Project, which is part of the TANESCO National Grid reinforcement strategy, is expected to provide access to cost-efficient electricity, which is a necessity in order to achieve adequate private sector development within the country.

Completion of the project will involve both the construction and the operation of a 667 km, 400kV AC double circuit transmission overhead line that will run between the Tanzanian cities of Iringa, Dodoma, Singida and Shinyanga.

The role of the newly constructed link will be to transfer hydropower that has been generated in southern Tanzania to the northern parts of the country where they are currently witnessing strong economic growth and subsequently are experiencing a growing demand for electricity so as to sustain the developing mining and industrial activities in the region.

Overall, the project will help to improve the transmission of electricity from both existing and future generating sources expanding from the southern part of the country to the northern regions and will also serve as a key link in future interconnection with Zambia and Kenya, which will help to promote regional economic cooperation and development between the countries.

The financial agreement for the project was signed earlier this month in Dar es Salaam between the Tanzania Permanent Secretary of the Ministry of Finance and Economic Affairs, Ramadhani M. Khijjah, and the Head of the European Investment Bank East Africa regional representation, Kurt Simonsen.

The ultimate goal through this project is for the overhead line to become part of the overall infrastructure that connects the Eastern and Southern African Power Pools.

“Your involvement signifies the importance that you attach to the development of energy sector in Tanzania which we consider it as the ‘life blood’ for the socio-economic development of our country,” said Mr. Khijjah at the signing ceremony for the financial agreement.

According to Mr. Simonsen, this project will be beneficial to Tanzania as it will help to support economic growth, sustainable development and social inclusion.

“Economic growth requires energy. Energy spurs growth. Renewable energy supports sustainable development and social inclusion promotes cohesion,” said Mr. Simonsen in a recent East African Business Week (EABW) report, “this is a good project for Tanzania.”
Altogether transmission project will receive a total of USD 468 million, which will be co-financed by a coalition between the World Bank, the African Development Bank, the Japan International Cooperation Agency, the Korean Economic Development Cooperation Fund and the European Investment Bank, with the remaining funds being provided by the Republic of Tanzania.