AFD signs three concessional loans with the government of Tanzania for development in the Lake Victoria Region

TANZANIA – French Development Agency (AFD) has signed three financing agreements with the Government of Tanzania. The French financial institution is lending US$261.25 million to improve access to electricity in rural areas and to support drinking water supply and sanitation services in the Lake Victoria region.

The three concessional loans are for the implementation of several electricity and water projects in Tanzania. The first concessional loan of US$113.59 million is for the national rural electrification programme.

The funds will be used to finance the second phase of a project to electrify 90,000 households. AFD financing is also earmarked to finance the construction of several solar power plants with a cumulative capacity of 3 MWp in rural areas.

The programme financed by AFD is in line with the strategy of the Tanzanian Rural Energy Agency (REA), which is based on grid extension and off-grid projects.

“In rural areas, the historically low rate of access to electricity has improved over the past 10 years. This is thanks to the National Rural Electrification Programme. Nearly a quarter of rural households are now connected to electricity, compared to 17% in 2017,” said AFD.

The French financial institution is also supporting the electricity interconnection between Tanzania and Zambia through a US$113.59 million concessional loan. The French financial institution also supports the electricity interconnection between Tanzania and Zambia through a US$113.59 million concessional loan.

AFD thus joins the World Bank and the European Union which are financing this project. The project will enable the construction of a 400 kV transmission line and substations from Iringa to Sumbawanga via Mbeya and Tunduma and the Tunduma interconnection line in Tanzania’s Songwe region to the border with Zambia.

The objective of this power interconnection project is to ensure security of electricity supply to the countries in the East African sub-region and the pooling of energy resources in the region.

According to the French Development Agency (AFD), the Kenya-Tanzania connection is currently under construction, making the connection between Tanzania and Zambia the last link towards the interconnection between the East African Power Pool and the Southern African Power Pool.

The water and sanitation sectors also benefit from AFD’s financial support US$34 million in the form of a concessional loan. This financing will help extend water services in the country.

The funds will also help to improve sanitation services in Mwanza, as well as localities located in the Lake Victoria watershed, particularly in the Usagara, Buhongwa, Kisesa, Buswelu and neighboring areas.

The provision of adequate sanitation facilities in schools and public places in Mwanza is also on the agenda of the Tanzanian government. This project is a follow-up to the ongoing Lake Victoria water and sanitation project in Tanzania.

This other project is financed by the Tanzanian government with loans from the French Development Agency (AFD), the European Investment Bank (EIB) and the European Union.

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