Announcement of Five Million Two Hundred Thousand US Dollars Loan in Tanzania for Power on November 3, 1967

l'JJ\L 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3~6360 Bank Press Release No. 67/52 Subject: $5.2 million loan in November 3, 1967 Tanzania for power The World Bank has approved a loan equivalent to $5.2 million to the Tanganyika. Electric Supply Company, Limited. The loan will fina~pe the fcreign exchange costs o:E installing some 21 megawatts of diesel-generating facilities in Dar es Salaam on the Indian Ocean and iQ. Mwanza on Lake Victoria, totether with related transmission and distribution equipment .. The new installations .should meet Tanzania's power re- quirements until early 1971. The Chase Manhattan Bank, N.A. in New York has agreed to participate in this loan in the amount of $90,000 representing the first maturity falling due on · • .July 1, 1971. The Tanganyika Electric Supply Company, Limited (TANESCO) is a-government- owned company which supplies and distributes electric powe~ on the mainland of Tanzania. The TANESCO system can be divided as follows: the Dar es Salaam/Tanga/ Morogoro ar~~ along the coast, the Moshi/Arush~ area to the north, and 14 small branches with their own generating facilities. The Moshi/Arusha and'Dar es Salaam/ Tanga areas account for over 90% of the company's sales. In the last 16 years power demand in Tanzania has been growing at an average rate of 9% a year. Growth in recent yearsi has been largely concentrated in the /Dar es Salaam area and has been more rapid than in the past. In the five-year period 1961 through 1966, total sales in the Dar es Salaa.t\l area increased at an average rate of 18.4%; in the last two years the increases were 18% and 33.5% re- ~ · spectively. This ·has been due largely to the fact that Dar es Salaalll is the prin- . cipal port, railhead and center of the largest market in the country and the site  . 2 - of several new i.ndustrics. TANESCO' S' sales are expected to increase at an average minual rate of 13.51 through 1970 and at nearly 12% in the following five years. In order to meet the demand for power TAKESCO has been engaged in a six-year expansion program. The project being assisted by the Bank loan is part of this program and will be used for facilities to be installed during the years 1966 th1·ough 1970. At Dar es Salaam about 18 megawatts of generating plant and auxil- iaries in three or four units will be installed at the Ubungo power station now under construction on the western outskirts of the city. The Mwanza installation will cousist of two additional units of generating plant of about 1.5 megawatts c3ch in a new power station containing three units of the same size, which is at present under construction. Both the Dar es Salaam and the Mwanza installations are designed to run on residual oil from the refinei·f in Dar es Sdaam. Minor gen;2rating facilities will be installed at various isolated plants th1.·oughout the •• country. The extensions to the transmission system consist mainly of a nunber of 33-kilovolt feeder lines in the coastal areas to enable the existing systems to carry additional loads. The extension of the distribution systems comprise a multi~ tutle of minor works to connect new consumers in all areas and to reinforce existing systems. The Bank loan will be for a .term of 20 years and bear interest at the rate of 6% per annum. Amortization will begin in July 1971. The loan will be guaranteed by The United Republic of Tanzania. This is the first loan to be made by the Bank in Tanzania. However, Tanzania has benefited from three Bank loans totaling $75 million to the East African·Comnou Services Aut;1ority for transportation and telecommunications; these loans are jointly guaranteed by the Governments of Tanzania, Kenya and Uganda. Furthermore, tht? Internationa~ Development Association has granted three credits totaling $23.6-milliori to Tanzania, and the International Finance Corporation has invested $4.7 million in the Kilombero ,Sugar Company in Tanzania; both agencies are af- filiates of the World Bank. •