M a r k e t N e w s

Tanzania Starts Construction Works Of Power Interconnection Project With Kenya

Posted on : Tuesday , 3rd November 2015

The Tanzanian and Kenyan Governments have recently announced that construction works have started on the Kenya-Tanzania Power Interconnection project that aims at connecting the Eastern Africa Electricity Highway between Kenya and Ethiopia, with the Eastern Africa Power Pool compounded by countries of the Common Market for Eastern and Southern Africa (COMESA).

 
The project, implemented by Kenya Electricity Transmission Company (KETRACO) and Tanzania Electric Supply Company (TANESCO), consists on the development of a high voltage alternating current (HVAC) 400 kV transmission line (T-line) with a total length of 507.5 km, which starts in Mbeya city in southwest Tanzania and finishes in Isinya town, located 58 km southwards from Kenya’s capital Nairobi.
 
The Kenya-Tanzania Power Interconnection project has as a first component the development of a 414.4 km transmission line located in Tanzania, which includes the construction of a 400 kV substation in Arusha and rehabilitation and upgrade works at the existing Singida substation in Tanzania’s central region.
 
The second component that consists on the development of a 93.1 km transmission line in Kenya does not include any substation construction works.
 
The project is being partially funded by the African Development Bank (AfDB) with a UA 102.79 million (USD 159.06 million) loan, the Japan International Cooperation Agency (JICA) with a UA 63.48 million (USD 98.23 million) loan, the Tanzanian Government with a UA 28.49 million (USD 44.09 million) equity, and the Kenyan Government with a UA 5.10 million (USD 7.89 million) equity.
 
The Kenya-Tanzania Power Interconnection project, is part of a wider project called the Zambia-Tanzania-Kenya Interconnection Project which consists of over 1,600 km T-line linking the three countries, to facilitate power trade, reduce average energy production costs and improve reliability and security of power supply to both Southern and Eastern Africa.
 
According to the AfDB, the project is expected to be completed by December, 2017.
 
Expected results include facilitation of the wheeling of 400 megawatts of electric power form Zambia to Tanzania and facilitation of wheeling at least 300 megawatts from Tanzania to Kenya.
 
The expected reduction of energy production costs is estimated to be around the USD 109.64 million between both Tanzania and Kenya and will support a raise in power trade to 5,885.80 GW-h by the year 2022 according to a project’s assessment from the AfDB.
 
As a result, a decrease in Tanzania’s average electricity tariff will be achieve in the domestic sector from USD 0.14 per kW-h to USD 0.09 per kW-h in the same period.
 
Regarding to the industrial sector, it will also see a reduction in the average electricity tariff from USD 0.21 per kW-h to USD 0.12 per kW-h towards 2022.
 
Finally, it will support an increase in Tanzania’s GDP growth from the current 6.8% per annum to 10.0% per annum in 2022 according to the AfDB.

Source : tanzaniainvest.com
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