The project consists of the upgrading and extension of water and sanitation facilities in the cities of Mwanza, Musoma and Bukoba and other satellite towns of Mwanza, located on the shores of Lake Victoria, which is one of the most important trans-boundary national resources on the African Continent. It is a shared resource for several countries (Tanzania, Kenya and Uganda) with multiple economic uses and the sole source of water supply for many communities. The need to manage the lake and the activities which impinge on its environmental sustainability has emerged as one of the key challenges in East and Northern Africa in view of experiences with past pollution. A particularly pressing issue is the rapid population growth in the lake zone of the East Africa Community (EAC), which is seven times the African average, as people are attracted to economic opportunities the lake zone offers.
The project is currently in the investment phase. Physical works are expected to start during the second half of 2016.
EIB and AFD are aiming to co-finance the project through a EUR 90 million sovereign loan in the framework of the Mutual Reliance Initiative (MRI) with EIB in the lead. The EU-AITF IRS will be applied to the EIB loan to comply with the IMF concessionality requirement of a grant element of 35% for public lending to the Government of Tanzania. AFD will obtain an IRS for this project from its own resources, ensuring equivalent economic and financial viability of the project and meeting the same grant requirement. The first disbursement related to Priority Works and Immediate Investment Plans is expected to be made during the second half of 2016, upon finalization of contracts and release of Conditions prior to a first disbursement.