Announcement of Sweden and World Bank Lend Forty-Two Million US Dollars for Electric Power in Tanzania on December 14, 1970

.INTERNATIONAL BANK FOR RECONS1~RUC::Tl0f\1 AND DEVELOPl\~ENT' 1818 H STREET, N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 70/68 Subject: Sweden and World Bank lend December 14, 1970 $42 mi'llion for electric power in Tanzania The largest electric power project ever to be undertaken in Tanzania will go forward with the equivalent of $42 million in financial assistance from Sweden and the World Bank. The project is designed to meet the rapidly growing demand for powur through 1980 in Tanzania's coastal region where most of the industrial and conunercial activity is concentrated. A Bank loan of $30 million has been made to the Tanzania Electric Supply • Company, Limited (TANESCO) and guaranteed by the United Republic of Tanzania • The loan is for a term of 25 years, including a 5-year grace period, with inter~st at 7-1/4%. The Swedish credit, equivalent to $12 million, was ex- t9nded to the United Republic of Tanzania. It is interest-free and for a tenn of 50 years, including 10 years grace, with a service charge of 3/4 of 1%. Tl1e Govermncnt will re-lend the proceeds of the Swedish credit to TANESCO ,\ on terms similar to those of the Bank loan. The United Republic of Tanzania comprises mainland Tanzania and Zanzibar. TANESCO is responsible for public power supplies throughout mainland Tanzania. Including plants soon to be commissioned, TANESCO will have total generating cgpacity of 122 megawatts. In addition, there is about 30 MW of private plant. T~NESCO has an interconnected power system in the coastal region serving the Dqr es Salaam, Morogoro and Tanga areas, the most intensely developed part of • the co11ntry. Industrial users account for about 60% of total electricity sales. /more Bar..k P.R. No. 70/68 - Tanzania-Electric Power • - 2 - Electricity consumption in the coastal area has grown at an ,werage ar.nt!al rate of ronre than 12% in the past decade and is expected to reach A peak of about 19% in 1972 when construction of certain new industrial plants is completed. The project being assisted by the Bank and Sweden consists of the c~nstruc- tion of th~ first stage of a hydroelectric power scheme at Kidatu on the Great Ruaha River, including a dam creating a reservoir and a generating station with an initial capacity of 100 MW. To meet the requirements of the coastal system prior to the commissioning of the hydroelectric plant, a diesel generating station near Dar es Salaam will be expanded by the addition of about 15 MW. Also included is the construction of a 190-mile, high-voltage transmission line from Kidatu to Dar es Salaam and a related substation. Consultants have been retained to assist i.n carrying out the project and to study and make recommendations for dealing with any ecological consequences of the project. The project is scheduled for completion by mid-1975 at a total cost esti- mated at the equivalent of $59 million, excluding interest of $6.5 m:i;Jlion • during construction. The Bank and Swedish financing of $42 million will cover the foreign exchange required for construction and consultants' services. The $17 million local currency component will be provided by the Government in the form of a subscription to TANESC0 1 s equity capital. Hydroelectric projects generally have a number of environmental side effects, both positive and negative, and therefore a general ecological reconnaissance of the area to be affected by the Kidatu project was carried out in mid-1970. Some ~f the probable consequences of the project brought out in the course of these investigations are now the subject of an in-depth study. It is believed that • they can be dealt with effectively so that any adverse ecological effects will be minimized. - 0 -