The Tanzania Backbone Interconnector Project is part of the Tanzania Electricity Supply Company (TANESCO) National Grid reinforcement strategy and will provide access to cost-efficient electricity essential for private sector development in the country. The project comprises the construction and operation of a 667 km 400 kV AC double circuit transmission overhead line between Iringa, Dodoma, Singida and Shinyanga. The link will transfer hydropower generated in the South to Northern Tanzania, currently experiencing strong economic growth and increased demand for electricity due to developing mining and industrial activities. Eventually the line will become part of the infrastructure connecting the East and Southern African Power Pools. The USD 472 m transmission project is co-financed by the European Investment Bank, by the World Bank, AfDB/ JICA and Korea EDCF, with the balance financed by the Republic of Tanzania and/or TANESCO. The construction works for transmission lines and substations commenced in December 2013. The overall EPC progress is 95.4% for the transmission line (Lot 1, Lot 2, Lot 3) and 99.9% for the substations (Lot 4).
The IRS Grant from the ITF is used by EIB to reduce the interest rate applicable to its loan of EUR equivalent of USD 134.5m, so that it reaches the IMF concessionality requirements. As at June 2016, EUR 36.148 m (USD 48.3 m) had been disbursed under the EIB loan (using EUR 5 m of the EU-AITF subsidy).