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 southern Tanzania to northern Tanzania, where economic growth is strong and demand for electricity increasing 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 468m transmission project will be co-financed by the EIB (28.45%), the World Bank (29.72%), AfDB/ JICA (27.44%) and Korea EDCF (7.63%), with the balance (6.77%) financed by the Republic of Tanzania (the borrower) and/or TANESCO (the Promoter). The project is being implemented in two phases: the extension of existing substations and the construction of transmission lines for operation at 220kV under Phase 1, already completed, and their further upgrade to 400kV under Phase 2.
The IRS Grant from the EU-AITF 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 of December 2018, EUR 5.49m of the EU-AITF subsidy has been utilised.