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Since 2015, AFD and the European Union EU have been contributing to the decarbonization of Tanzania, which is still largely dependent on fossil resources. But it has considerable potential in terms of renewable energies. Earlier this year, the country reached an important milestone, having laid the corner stone for the Shinyanga solar power plant at a ceremony that could usher in a new era of energy.

Tanzania's official ceremony of March 14 presented an opportunity to present two major projects supported by AFD and the EU, which contribute to the country's energy transition: the Shinyanga solar power plant and the Kakono hydroelectric power plant. 

Tanzania, with its excellent solar, wind and hydropower resources, is stepping up the diversification of its energy supply in order to increase its energy production. By 2025, the national electric utility, TANESCO, expects a 40/60 mix of renewable and conventional energy production, against a backdrop of increasing demand (between 6% and 10% additional demand per year in recent years).

Key facilities

To support Tanzania, two innovative projects benefited from feasibility and environmental impact studies financed jointly by the EU and AFD, via the ARE Scale up and SE4ALL facilities. 

These facilities are “essential for a donor such as AFD”, says Céline Robert, AFD's Country Director in Tanzania. “They enable us to finance studies on key issues, and to engage in dialogue with the EU from the earliest stages of the project. In the case of the Kakono dam, this dialogue led to the mobilization of a grant of €36 million from the EU to support TANESCO in implementing the environmental and social management plan. Given the scale of the project, it would have been much more complicated for AFD to commit to it without EU support.”

Further reading: Hydropower in Tanzania to reinforce renewable energy

In concrete terms, the 87.5 MW Kakono hydroelectric power station is expected to supply around 4 million people with low-cost energy, thereby supporting economic growth in the far northeastern region of Tanzania. Thanks to 24/7 production of renewable energy, it will save 214,000 tonnes of CO2 per year compared with emissions from existing diesel power plants, while improving the stability and reliability of the local power grid.

Turning challenges into opportunities

The second, even more ambitious project is the country's first industrial-scale solar power plant in Shinyanga, in the northern region. Here, the EU and AFD have worked in support of TANESCO to assess the technical, economic, financial, environmental and social feasibility of a 150 MW solar photovoltaic (PV) power plant. Ultimately, this plant will be the largest solar power station ever built in East Africa.

“AFD loans and EU grants work hand in hand to finance project preparation, works execution and supervision,” says Cédric Merel, Head of Cooperation at the EU Delegation in Tanzania, “while reducing the burden of debt repayment on Tanzania's national budget”. 

More broadly, Cédric Merel says, the EU's commitment in this country is part of the “Global Gateway” strategy, which aims to build sustainable infrastructures. “The EU is promoting a ‘Green Deal’ whose ambition is to turn climate and environmental challenges into opportunities, and stimulate the efficient use of resources. This means moving to a clean and circular economy, reversing biodiversity loss, reducing pollution and, ultimately, achieving climate neutrality.”

Further reading: Boosting access to renewable energy across East Africa

Studies to attract investments

Feasibility studies for both the Kakono hydroelectric power plant and the Shinyanga solar plant are proving decisive for the introduction of renewable energies in Tanzania. They provide vital information on the viability of projects and potential environmental and social risks. What's more, they help create a continuous pipeline of renewable energy projects, and attract private and public investment.

As Céline Robert sums up, “ARE Scale up and SE4ALL facilities have financed nearly €2.8 million in studies, enabling AFD alone to commit €340 million to the deployment of renewable energies and increased access to electricity in Tanzania”. 

“Our aim, together with AFD and other international financial institutions, is to achieve the highest possible leverage - the maximum amount of a loan for a given grant - in order to make a significant contribution to Tanzania's energy transition,” says Cédric Merel.

The content of this publication is the sole responsibility of AFD and does not necessarily reflect the opinions of the European Union.