KAKONO 87 MW HYDRO POWER PROJECT


Overview

  • Reference: P-TZ-FAB-003
  • Appraisal Date: 30/09/2016
  • Board Presentation: 31/03/2017
  • Status: LendingLEND
  • Implementing Agency: TANZANIA ELECTRIC SUPPLY COMPANY LTD (TANESCO)
  • Location: North West Tanzania, 90 km Bukoba Town

Description

Through detailed optimization and economic and financial analysis the alternative with full supply level of 1190masl and a maximum turbine discharge of 315m3/s with two turbines was found most advantageous.

The total cost of the proposed alternative is 379.4 M USD

All prices and cost data are quoted in US Dollars (USD). The unit cost is referred to the price level of year 2014 for high quality construction materials and equipment. No taxes and import duties are included in the cost estimate.

It is assumed that the project will be implemented through an international competitive bidding. Without taking into account what will be the form of contract, contract packaging for the Kakono hydropower plant may be:

"Civil and Builder's works: Power Station, Dam and Infrastructure

"Mechanical Works including Hydraulic Steel Structures;

"Electrical Works: Generators, Control system, Transformers, HV Cables, Switchyard/Substation;

"Transmission Line


Objectives

The project objectives are to provide reliable power supply to north-western part of Tanzania; stabilise the national electricity grid; and support regional integration.


Rationale

Kakono is located in North Western Tanzania where the load demand is growing fast and energy supply options are limited to grid supply and thermal generation. Development of hydropower in the area will not only provide cheap energy supply but will also increase grid reliability. Currently there is a feasibility study for Masaka-Mwanza 220kV transmission line between Uganda and Tanzania. The line will be used to connect the proposed plant the National grid.

Kakono hydropower scheme is potentially attractive because it is located in vicinity of the proposed transmission line near Kyaka substation. Both regional and national based studies have ranked Kakono as least cost project.

The proposed Kakono hydropower project has been treated as Category A according to the World Bank and International Finance Corporation (IFC) classification criteria. It also falls under Type A, which require a mandatory ESIA, according to the Environmental impact Assessment and Audit Regulations, 2005. The ESIA study for Kakono, has therefore, been prepared to meet international requirements as well as national requirements.


Benefits

Kakono HPP is among the least cost generation sources in the country and undoubtedly in the region. There are strong socio-economic arguments in favour of developing this project as soon as possible.

Based on the results of the present Feasibility Study of the Kakono Hydropower Project, the following conclusions can be made:

oThe project is a technically feasible project which offers safe, rational and reliable project setup. As such, it reduces technical risks related to its implementation to the minimum extent; and oUnder consideration of financial aspects, the proposed project layout is found to be financially viable, offering attractive NPV and IRR on investments.

Other expected benefits oReliable power supply in Northern part of Tanzania; oGrid stabilization; oImproved social services, trade and tourism oCould be implemented as a regional project thus help in promoting power trade and relations in the region; oWill increase infrastructure development and regional economic integration


Key contacts

MUGUWA Andrew - RDGE1


Estimated Cost

Amount
 379,000,000