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AFD to Finance the First Grid Connected Solar Photovoltaic Power Plant in Tanzania and the Modernization of Electricity Network
The Government of Tanzania and Agence Française de Développement (AFD) signed today in Dodoma a financing agreement for an amount of 130 M€ (approximately 366 bn TZS) which will be on-lent to Tanzania Electric Supply Company (TANESCO), the final beneficiary of these funds.

This soft loan agreement will finance a 50 MW Solar Photovoltaic (PV) Power Plant in the Kishapu district of the Shinyanga region in the northwest of the country as well as several investments aimed at upgrading TANESCO’s transmission network to a “smart grid” to increase the level of injection of intermittent power such as solar energy.  

A complementary amount of 0.7 M€ has also been delegated as a grant by the French Government to finance a technical assistance in favor of the program in order to build national capacity on renewable energy matters, particularly related to the management of a network fed with intermittent production.

The 50 MW Solar PV Power Plant, first phase of a 150 MW plant, will be the second largest solar PV plant in East Africa. Located in the sunniest area of Tanzania, it will consist in fixed solar panels, inverters and a direct connection to the existing Singida-Shinyanga 220 kV High Voltage line which borders the site. With this renewable energy, the plant is expecting to produce 91,600 MWh per year and to fight against climate change by reducing CO2 emissions by 22,400 tCO2 eq/year. 

The other investment component of the project will participate in the transformation of the transmission network of TANESCO into a “smart grid” by implementing Supervisory Control and Data Acquisitions system in a National Grid Control Center in Dodoma. It will also enable to deploy a Distribution Control Center with Distribution Management System in Dodoma, Arusha, Mwanza and Mbeya. Others smart investments will modernize the network by optimizing its utilization through data acquisition, in order to ensure the stability of the grid and reduce losses. 

This program contributes to the objective of the Tanzanian government to improve  renewable energy share in the power generation mix of TANESCO, and to AFD’s effort to make its activity be 100% compatible with the Paris Agreement and to ensure that 50 % of annual financing goes to projects that have a direct and beneficial impact on the climate.

This event represents an important step forward in AFD’s cooperation with the government of Tanzania, which started more than 20 years ago and has significantly increased since then. The Energy sector is now the first sector in terms of commitments in Tanzania with almost 400 M€ approved by AFD Board of Directors during the last 6 years. AFD is involved along with TANESCO and the Rural Electricity Agency to support access to electricity, transportation and generation.

Speaking during the signing ceremony, Ms. Stéphanie Mouen, Country Director of AFD in Tanzania, reaffirmed France’s commitment to support the Government of Tanzania towards his energy transition: “We are anticipating that the program will provide the foundation of a sustainable low-carbon economy by improving the grid performance and by deploying solar production capacity. The construction of the first Tanzania’s Solar PV Power plant connected to the national network will have a major demonstrating and ripple effect on the development of renewable energy in the country.”

Mr. Emmanuel M. Tutuba, Permanent Secretary, Ministry of Finance and Planning, pointed out that the signed Concessional loan Agreement is in line with the newly approved FYDP III, which emphasizes on industrialization for Human Development. Really, Industrialization is impossible without the reliable and adequate power supply.

Press Contact: Bérénice OREYO-PIERRONNET