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OPEC Fund and Partners to Aid Tanzania's Renewable Energy Project with USD 60 Million Outlay

Tanzania is investing in the augmentation of its hydropower capacity with plants under development at Rusumo and Kakono in its northwestern region.

July 01, 2023. By EI News Network

A new USD 60 million loan by the OPEC Fund for International Development (the OPEC Fund) and partners is anticipated to remarkably boost energy security in northwest Tanzania.

The project will involve the development of a 166km overhead transmission line linking the Kagera region to the national grid, replacing the current energy supply from Uganda with local hydropower resources.

Tanzania has massive potential in the field of renewable energy. Tanzania is investing in the augmentation of its hydropower capacity with plants under development at Rusumo and Kakono in its northwestern region.

The two new hydropower plants are likely to be operational in 2024 and 2030 with a nominal capacity of 80 MW and 87 MW, respectively.

The financing of the project will be distributed among several partners: The OPEC Fund with a USD 30 million loan, as a first tranche of a USD 60 million facility, will be added by the Abu Dhabi Fund for Development (USD 30 million), the Saudi Fund for Development (USD 12.8 million) and the government of Tanzania with USD 2.6 million.

The construction of the new transmission line will facilitate Tanzania to lower its reliance on energy imports.

This diversification will increase energy security and save costs by reducing the requirement to pay for imports in foreign currency.

Moreover, the expansion of hydropower generation will allow the country to shut expensive and polluting back-up thermal power plants, leading to a cleaner and cheaper energy sector in Tanzania.

The OPEC Fund for International Development (the OPEC Fund) is the worldwide mandated development institution that provides financing from member countries to non-member countries exclusively.

Tags:

Overhead transmission line

Rusumo and Kakono in its northwestern region

Hydropower project

Energy imports