Tanzania: US$ 47 million to improve electricity supply

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Tunis, 14 December 2007 - The Board of Directors of the African Development Fund approved on Friday 14 December 2007 in Tunis a loan and a grant amounting to 30 million Units of Account (47.2 million US dollars or 54.3 billion Tanzanian Shilling) to improve electricity suply in Tanzania.

The loan (US$ 45.1 million or TZS 51.8 billion) and the grant (US$ 2.1 million or TZS 2.4 billion) will help is extend, secure, and improve the supply of electricity to economic sectors and households in rural towns, per-urban areas and district headquarters in Mwanza, Shinyanga, Arusha and Dar Es Salaam regions.

Despite abundance of energy resources, access to electricity is low in Tanzania – 1% for rural and 10% overall; with above 91% of country’s energy consumption being derived from biomass: fuel wood and charcoal. The electricity quality and reliability are poor and power supply interruptions are frequent due to inadequate and dilapidated transmission and distribution infrastructure, causing damage to equipment and appliances and loss to industrial output, while also impacting service delivery by health and education facilities.

In order to help enhance access to electricity, expand and strengthen the electricity transmission and distribution infrastructure, the Electricity V project – whose funding has been approved by the ADF, the soft loan arm of the African Development Bank Group – will connect an additional 37,803 customers to the electricity grid. In addition, it will ameliorate the connectivity, quality and reliability of electricity supply in the covered regions (Mwanza, Shinyanga, Arusha and Dar Es Salaam). The project embodies construction of distribution networks, rehabilitation of substations, low voltage lines, distribution transformers and street lights in the project areas.

Through those outcomes, the project will support economic growth and poverty reduction by developing a diversity of economically competitive and reliable sources, with emphasis on the development of the country’s indigenous energy resources including hydropower, natural gas and coal for the internal market and export. By delivering power to meet electricity demands of economic sectors as well as households, the project since it is the least-cost and most economic option, helps the government in realizing its energy sector goal.

1 Unit of Account ≈ USD 1.57 ≈ TZS 1,809.05 as at 14/12/2007

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