20100827
africanews

DAR ES SALAAM (Reuters) - The World Bank will lend Tanzania $150 million for a new power transmission project expected to improve the availability of electricity in mining regions.

The loan will finance the first phase of a new 667-km high voltage alternating current transmission line.

"The project is intended to have positive impact for the overall development and growth of the country," said Pankaj Gupta, the World Bank task team leader for the project.

"In particular it will alleviate the increased demands for electricity in northern parts of Tanzania due to increased mining and other economic activities in this area."

Tanzania is Africa's third largest gold producer, but also has reserves of uranium, nickel and coal. Gold exports alone earned it $1.076 billion in 2009, up from $932.4 million the previous year.

Chronic power shortages in east Africa's second largest economy, caused by years of underinvestment coupled with surging demand, have undermined growth in the country.

Only 14 percent of Tanzania's estimated population of 40.7 million have access to electricity, up from 7.5 percent in 2000.

In the medium to long term, the project will also facilitate power trade in the region by providing the link between the Eastern Africa Power Pool and the Southern Africa Power Pool linking Tanzania with Kenya in the north and Zambia in the south, said the bank.