AfDB grants $120 million funding for 50MW Tanzanian Hydropower project

Tanzania – The African Development Bank (AfDB) board has approved $120 million funding for a 50MW Hydropower project in western Tanzania that will provide renewable energy to households, schools, clinics and small and medium-sized enterprises in the Kigoma Region. The project also received $20 million in funding from the African Growth and Opportunity Fund (AGTF). The project is estimated to cost $144.14 million, the remaining $4.14 million will be provided by the government of Tanzania.

Commenting on the approval of funding for the Malagarasi Hydropower project, AfDB’s President, Akinwumi Adesina said “the approval is a reflection of the Bank’s commitment to assist the Tanzania to accelerate its transition to more inclusive and sustainable growth through the production of clean, reliable and affordable electricity.”

Technical aspects of the Hydropower project

The Malagarasi hydroelectric plant will be built on a run-of-river basis, unlike most hydroelectric plants. The plant will exploit the Igamba Falls on the Malagarasi River, according to Studio Pietrangeli which will provide engineering services for the power station. A 132-kV transmission line will be built and connect to Tanzania’s national grid, as well as a distribution network expansion operation that includes rural electrification and last-mile connections. 

The hydropower plant has a potential average annual output of 181 GWh. This will meet the electricity needs of as many as 133,649 Kigoma households, bringing the region’s electrification rate more closely in line with the rest of the country.

Economic, social and environmental impact

The project is anticipated to create about 700 jobs during the construction phase, reduce the region’s electricity production costs (from US$0.33 to about US$0.04 per kWh). It will also reduce the use of fossil fuels that emit greenhouse gases. The cost of doing business will also come down because the industry will no longer need to maintain expensive back-up generators, said the AfDB.

The construction of the Malagarasi hydroelectric plant is in line with Tanzania’s National Development Plan (Vision 2025) and the country’s Second Five-Year Development Plan (2016/17 – 2020/21) . 

The project  will also contribute to the AfDB’s Light Up & Power Africa High-5 development priority, which is being implemented through the institution’s New Deal on Energy for Africa strategy.