the Agence Française de Développement (AFD) and the European Union (EU) have inked a contract to jointly finance the construction of the Kakono hydropower plant in Tanzania, boasting a capacity of 87.8 MW.
Under this agreement, the EU and AFD will pool their resources, contributing a combined €146 million (approximately US$154.9 million), which accounts for nearly half of the project's total cost of €296 million ($314.1 million). The EU, as part of this partnership, will invest €36 million ($38.2 million) in grants to support the development of the hydropower facility at the Kakono Dam, situated on the Kagera River. This collaborative venture also includes the African Development Bank (AfDB).
Kakono is strategically located in Tanzania's Kagera region, near the border with Uganda. As a nation largely reliant on hydropower and thermal power plants, particularly gas-fired ones, for its electricity supply, Tanzania possesses substantial untapped renewable energy potential. This initiative aligns with Tanzania's goal of accommodating its growing energy needs while adopting a low-carbon approach, as highlighted by AfDB.
The Kakono hydropower plant will address the escalating demand for electricity generation in northern Tanzania, delivering a stable power supply to the Lake Victoria Zone and the entire country. Beyond bolstering the national grid, it is expected to yield a reduction of 213,810 tons of greenhouse gas emissions annually, thus playing a pivotal role in fostering economic development and contributing to climate change adaptation.
Commissioner for International Partnerships, Jutta Urpilainen, lauded the EU's involvement in diversifying Tanzania's energy sources, noting that this project is a part of the Global Gateway Investment Package for Africa. She highlighted the recent Tanzania-EU Business Forum, which announced investments totaling €1 billion, with the Kakono hydropower project being a standout example.