THE government yesterday signed 361bn/- (130m Euros) with the French Development Agency (AFD) to finance the 150MW solar power project in Kishapu District, Shinyanga region.
Permanent Secretary in the Ministry of Finance and Planning, Mr Emmanuel Tutuba said the project is expected to be implemented in two phases.
He said the project is designed to be implemented in a period of one year and that upon the completion of first phase at least 50MW is expected to be generated.
"The first phase is scheduled to kick off in March, next year," he said.
The agreement was signed by the Permanent Secretary in the Finance and Planning ministry, Mr Emmanuel Tutuba and AFD country director, Mrs Stephanie Essombe. The signing ceremony was also attended by ambassador of France, Mr Frederic Clavier.
The Paymaster general said part of the funds will be used for grid modernisation in order to transform National grid to be able to integrate non-dispatchable renewable energy and also stabilise the grid to reduce losses.
He said the France government through AFD financed the feasibility study of the grid project through a grant. He said additional 0.7m Euro has been committed for assisting in technical assistance of the project.
Mr Tutuba outlines a number of benefits that will arise from the project naming some as to increase security of power supply to the national power utility, Tanesco to fulfill target of diversifying energy generation resources with renewable power generation mix.
The project will as well reduce dependence on Hydropower during daylight hours and allow conservation of generation capacity thus allowing spare capacity to be used during peak demand periods and extensive dry season.
As for Shinyanga region, he said, after completion of the project, they will enhance the ability to supply to the adjacent gold mines as well as stabilise the grid to strengthen power supply capacity and stimulate the economic and social development.
Mr Tutuba said the signed concessional loan agreement is in line with newly approved National Five Year Development Plan III, which emphasizes on Industrialisation for Human development.
He said reliable and adequate power supply justifies strong commitment in building up the industrial economy.
Speaking after signing the agreement, AFD Country Director, Mrs Mouen said they are towards energy transition in the country for a cleaner energy.
She said the AFD goal is to ensure everyone is able to access efficient and low carbon energy services.
The project, she said, among others is to make Tanzania become one of few countries in Africa which develop huge solar potential and the plant will contribute to improve renewable energy share in the power generation mix.
She said they are anticipating that the project will provide the foundation of a sustainable low-carbon economy by improving the grid performance and by deploying solar production capacity.