The Government of the United Republic of Tanzania and the Government of Sweden have today signed two Agreements under which Sweden will provide financial support on a grant basis totalling Swedish Kronor 304 million (approximately Tanzanian shillings 48.7 billion) to enable the Government to implement the following two energy sector projects for five years 2008 to 2013:1. Support to Makambako – Songea 132 Kv Transmission Line and Rural Electrification of Districts in Iringa and Ruvuma Regions, Tanzania; and2. Capacity Development of the Rural Energy Agency (REA).
The first financing Specific Agreement signed today committing SEK 290m (equivalent to Tshs 46.5 billion) is for financing the Makambako – Songea 132 Kv transmission line and rural electrification of districts in Iringa and Ruvuma regions. In addition to the grant, Sweden will also extend a credit of SEK 210m (equivalent to Tshs 33,6 billion). The financial support to this project will enhance supply of the electricity to Makambako and Songea towns and villages along the transmission lines. This project will lead to economic growth, improve living standards and social development in the six beneficiary districts in Ruvuma and Iringa regions. Increased access to electricity business activities, water pumping, schools, hospitals will also contribute to sustainable effect on poverty reduction. Optical fibre mounted along the power lines will multiply the capacity for data communication in the region. This project to be implemented by TANESCO.
Specifically, the project aims to extend the national grid network via a 132 Kv transmission line from Makambako substation to Songea substation including the electrification of Namtumbo, Mbinga, and Mbamba bay. The project will also include an installation of a new substation in Madaba about half-way between Makambako – Songea in order to electrify villages in vicinity of Madaba and further extension to district town Ludewa. The project document dated June 2006 has identified 21,200 potential customers in the project area.
The second Specific Agreement on Capacity Development of the Rural Energy Agency (REA), which is an autonomous agency responsible for the administration of the Rural Energy Fund (REF), aims to develop the skills, competence, systems and tools required to efficiently and effectively carry out the obligations of the REA. The Rural Energy Agency (REA), Rural Energy Board (REB) and the Rural Energy Fund (REF) were established by law in 2005 in order to enhance Government efforts to increase access of rural areas and poor households to modern energy services. These agencies provide the institutional mechanism for the implementation of the Government’s goal to increase electricity access in Tanzania from 10% to 20% by 2010. The Government has already allocated seed funds for the REF as well as financing of the physical establishment of the REA. This project to be implemented by REA shall commit a total of SEK 14 million (equivalent to Tshs 2.3 billion) for a period of about five years up to November 2013.
The agreement was signed today at the White Sands Hotel by the Permanent Secretary, Mr. Ramadhani M. Khijjah and the Ambassador of Sweden to Tanzania H.E. Mr. Staffan Herrström on behalf of their respective Governments.