Nairobi — Tanzania has received a $47 million boost for its energy sector from the African Development Fund.

The money - comprising a $45.1 million loan and a $2.1 million grant - will be used to extend, secure and improve the supply of electricity to economic sectors and households in rural towns, peri-urban areas and district headquarters in the country.

ADF said Mwanza, Shinyanga, Arusha and Dar es Salaam will benefit from the fund.

"Despite an abundance of energy resources, access to electricity is low in Tanzania - one per cent for rural and 10 per cent overall," said the ADF.

It added that electricity quality and reliability in Tanzania are poor while power supply interruptions are frequent, due to inadequate and dilapidated transmission and distribution infrastructure, causing damage to equipment and appliances and loss to industrial output.

To help enhance access to electricity, expand and strengthen the electricity transmission and distribution infrastructure, the Electricity V project - whose funding has been approved by the ADF - will connect an additional 37,803 customers to the national grid. These will be drawn from Mwanza, Shinyanga, Arusha and Dar es Salaam.

The project involves construction of distribution networks, rehabilitation of substations, low voltage lines, distribution transformers and streetlights in the project areas.

The project will support economic growth and poverty reduction by developing economically competitive and reliable sources, with emphasis on the development of the country's domestic energy resources including hydropower, natural gas and coal for the internal market and export.

ADF is part of the African Development Bank group, which supports less developed countries in Africa.

Thirty-eight of the 53 regional member countries of the Bank are eligible for ADF resources only, except enclave and private sector projects that are eligible for ADB resources.

Nigeria and Zimbabwe are eligible for ADF and ADB resources while Botswana, Egypt, Equatorial Guinea, Gabon, Libya, Mauritius, Morocco, Namibia, Seychelles, South Africa, Swaziland and Tunisia are eligible for ADB resources only.