Tanzania secures Sh384 billion from EU, AFD for Kakono hydropower plant

Dar es Salaam. The French Development Agency (AFD) and the European Union (EU) will contribute 146 million euros (about Sh384.6 billion) for the construction of the Kakono Hydropower Plant on the Kagera River, according to a statement from the EU.

The contract between the AFD and the EU to jointly finance the project was reached at the Global Gateway Forum in Brussels.

Through this agreement, the EU and the AFD will jointly contribute 146 million euros, or about half of the total cost of 296 million euros (about 779.9 billion) for the project.

The European Commissioner for International Partnerships, Jutta Urpilainen, said in a statement: “The recent, first-ever Tanzania-EU Business Forum saw investments worth 1 billion euros being announced, notably the Kakono hydropower project.

“I am pleased to follow up with today’s signature, with the EU contributing to Tanzania’s efforts to diversify its energy sources and bring green energy into the mix in line with the Global Gateway Investment Package for Africa”.

The long-standing cooperation between the EU and Tanzania focuses on the three priority areas of green deals, human capital and employment, and governance.

The EU will invest 36 million euros in grants for the construction of a hydropower plant at the Kakono dam in a joint project with the AFD and the African Development Bank (AfDB) worth 296 million euros in total.

The hydropower plant will respond to the increasing demand for power generation capacity in northern Tanzania and provide a stable supply of power locally in the Lake Victoria Zone and nationally.

It will add 87,8 MW to Tanzania’s national grid and reduce greenhouse gas emissions by 213,810 tonnes per year, contributing significantly to both economic development and climate change adaptation.

The Global Gateway Forum brings together an assembly of government representatives from the European Union and across the globe, alongside key stakeholders from the private sector, civil society, thought leaders, financial institutions, and international organisations to promote global investment in infrastructure.

During this landmark occasion, a series of strategic investment announcements and agreements with partner countries are being presented, marking a significant leap towards the implementation of the Global Gateway strategy.

These announcements not only underscore the tangible worldwide impact of Global Gateway but also provide a platform for governments and businesses to engage in critical discussions surrounding its priorities.

Global Gateway represents the European Union's effort to reduce the worldwide investment disparity, boost smart, clean, and secure connections in the digital, energy, and transport sectors, and strengthen health, education, and research systems. It provides sustainable investment opportunities to enhance the prosperity and security of our global partners and Europe alike.

The Global Gateway strategy embodies a collaborative approach that brings together the European Union, EU Member States, and European development finance institutions. Together, we aim to mobilise up to 300 billion euros in public and private investments from 2021 to 2027, creating essential links rather than dependencies and closing the global investment gap.

Team Europe stands out with a compelling proposition for democratic partner nations, focusing on sustainability across social, environmental, and financial aspects, promoting long-term drivers of growth through a comprehensive 360-degree approach, encompassing both hard and soft infrastructure, and reinforcing the resilience of nations seeking strategic autonomy.