Abu Dhabi, UAEThursday 20 June 2019

Egypt to build $3bn hydroelectric plant in Tanzania

El Sewedy Electric and Arab Contractors to construct huge facility that will more than double Tanzania's power generation capacity.

Egypt's El Sewedy Electric Group at the Africa 2018 Forum. Te company is to build a power plant in Tanzania. Reuters
Egypt's El Sewedy Electric Group at the Africa 2018 Forum. Te company is to build a power plant in Tanzania. Reuters

Tanzania has signed a deal with Egypt's El Sewedy Electric and Arab Contractors to build a $3 billion hydroelectric plant on a World Heritage site in the country, that will more than double Tanzania's power generation capacity.

Energy Minister Medard Kalemani, said in comments broadcast on state television on Wednesday that the plant would have an installed capacity of 2,115 megawatts, calling it "a very huge dam project".

Representatives of state-run Tanzania Electric Supply, El Sewedy and Arab Contractors signed the agreement in the presence of President John Magufuli and Egyptian Prime Minister Mostafa Madbouly, TV broadcasts showed.

Mr Magufuli said the project will be wholly funded from taxes. Monthly tax revenue collection has increased from 850 billion shillings (Dh1.36bn) per month before he came to power in late 2015, to an average of 1.3tn shillings under his administration, he said.

"When we asked for financing for this project, the lenders refused to give us money but thanks to improved tax collection, we are able to finance this project using our own resources," he said.

Arab Contractors will have a 55 per cent stake in the project and El Sewedy 45 per cent, El Sewedy said on Tuesday.

El Sewedy said the Egyptian stock market had halted trading of its shares pending details on the deal it had signed.

Covering 50,000 square km, the Selous Game Reserve is one of the largest protected areas in Africa, according to Unesco.

The World Wildlife Fund conservation group said in a report in July last year the proposed hydropower dam "puts protected areas of global importance, as well as the livelihoods of over 200,000 people who depend upon the environment, at risk".

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Officials at the WWF Tanzania office were not immediately available to comment on Wednesday's deal.

Mr Magufuli dispelled the environmental concerns, saying Tanzania had allocated 32.5 per cent of its total land mass to conservation.

"The dam will become a major source of water and the cheap electricity to be produced from the dam will reduce the number of people who cut trees for firewood," he said.

Mr Magufuli has in the past pushed for the project to start as quickly as possible to speed up development.

He has introduced anti-corruption measures and tough economic reforms and pushed for swift completion of big infrastructure projects including roads, railways and airports.

Updated: December 12, 2018 03:46 PM

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