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The Country Director of the French Development Agency (AFD), Mrs. Stephanie Mouen, has today signed a grant agreement of EUR 26 million (approximately TZS 73/- billion) with the Ministry of Finance and Planning of the United Republic of Tanzania. The signature took place in the presence of the French Ambassador, H.E. Frederic Clavier and the European Union Chargé d’affaires a.i., Mr. Emilio Rossetti. Representing the Government was Mr. Doto M. James, the Permanent Secretary of the Ministry of Finance and Planning.

The grant has been provided by the European Union and will be implemented by AFD to finance the cross-border link of the Tanzania-Zambia Energy Interconnection Project. The total cost of the project is estimated at EUR 500 million and, in addition to the EU grant, it is co-financed through concessional loans from AFD and the World Bank. 

The project consists of 620 km of 400 kV double circuit transmission lines, starting in Iringa and going through Kisada and Mbeya to Tunduma, close to the border with Zambia, and continuing from Tunduma to Sumbawanga, linking the Tanzanian national grid with the Zambian network. The EU grant will finance the Tunduma substation - including the installation of the 400 kV/330 kV switchgear and construction of 4 km of the transmission line from Tunduma to the Zambian border, enabling the connection with the Zambian electricity grid. This large and very important project will ensure Tanzania’s energy security and trading capacity in the region.

An additional EU grant of EUR 3.25 million (approximately TZS 11 billion) will be allocated to this project and managed directly by the French Development Agency (AFD), to ensure capacity building of TANESCO’s staff for operation of the electricity system, integration of renewable energy, smart grid technologies as well as maintenance of the lines and substations, ensuring project sustainability. 

Speaking on behalf of the EU during the signing ceremony, the Chargé d’affaires a.i., Mr. Emilio Rossetti stated that:  “The EUR 30 million grant from the EU is critical for the development of the whole project as it reduces risks in implementation and facilitates negotiations between Tanzania and Zambia on shared costs for the sub-station connecting the transmission lines between Tanzania and Zambia. The EU grant will also reduce Tanzania’s burden for loans repayment by taking on part of the costs.”

Speaking during the signing ceremony, Mrs. Stéphanie Mouen, Country Director of AFD, emphasized that: “by connecting Tanzania to Zambia, this European Union Grant financing delegated to AFD is creating the largest geographic electricity market in the world”.  

Background:

Tanzania still has a significant energy infrastructure gap, critical for the industrialization of the country. Greater economic diversification and poverty reduction depend on availability of reliable and affordable electricity services. The abundant, diverse, and renewable energy resources in Eastern and Southern Africa underlie the significant potential benefits from regional energy sector integration. The proposed project will construct the final segment of the Ethiopia – Kenya – Tanzania - Zambia regional transmission corridor, which is being developed in a phased manner. In 2014, Energy Ministers from three countries signed a Tripartite Inter Governmental Memorandum of Understanding (MoU) to build the Zambia-Tanzania-Kenya Interconnector in two phases. The MoU required each country to build the necessary transmission infrastructure within the boundaries of their own countries.

The completion of this regional power corridor is critical for power trade between the South Africa Power Pool and East Africa Power Pool and improving energy security and quality of supply in the region. Contributing to the regional power system integration, the Project will deliver significant benefits for the Tanzanian population, in terms of access to affordable power from the grid, increased reliability of supply and decreased pollution from unsustainable energy sources. The line will also enable evacuation of power from energy generation projects currently under construction.

About the European Union:

The European Union and the Republic of Tanzania are long-term partners. The European Union has provided key support for development in Tanzania, with a total envelope of EUR 556 million during the period 2014-2020. Such support has been focussing on:
-    Promoting fundamental rights, good governance and accountable democracy; 
-    Supporting Tanzania's development agenda and sustainable development goals for a better life for all, including through dedicated interventions in the area of large infrastructure, sustainable energy and agriculture, protection of wildlife and biodiversity, climate change mitigation and adaptation;
-    Stimulating inclusive growth, private sector and job creation; 
-    Fostering regional peace and stability, economic integration and trade development.
https://eeas.europa.eu/delegations/tanzania_en 

About Agence Française de Développement:

The Agence Française de Développement (AFD) Group funds, supports and accelerates the transition to a fairer and more sustainable world. Focusing on climate, biodiversity, peace, education, urban development, health and governance, our teams carry out more than 4,000 projects in France’s overseas departments and territories and another 115 countries. In this way, we contribute to the commitment of France and French people to support the Sustainable Development Goals (SDGs).    Present in Tanzania since 2008, AFD group is providing financing solutions and technical assistance (more than EUR 760 million (TZS 1,900 Bn) over the last 10 years) to support the Tanzanian government, local authorities, private sector and NGOs to reduce economic, social and territorial inequalities through the promotion of sustainable and inclusive development.   

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