Tanzania's state utility TANESCO has secured €130 million (approximately TZS 366 billion) in financing from Agence Française de Développement (AFD) to build the country's first grid-connected solar photovoltaic power plant.

The Deal

The financing agreement combines AFD loans with European Union grants to reduce the debt burden on Tanzania's national budget while delivering clean energy infrastructure.

• Initial phase will deliver 50MW of solar capacity in Kishapu District, Shinyanga
• Full project scale reaches 150MW, making it East Africa's largest solar plant
• Package includes funding for smart grid transmission upgrades

Why It Matters

Tanzania has long relied on hydropower and fossil fuels for electricity generation, leaving it vulnerable to climate-related supply disruptions and high energy costs.

• The country targets 80% renewable energy mix by 2030
• Solar penetration in Tanzania's grid remains below 1%
• Industrial electricity costs in Tanzania exceed East African averages by 15-20%

Company Background

TANESCO, the Tanzania Electric Supply Company, is the country's sole electricity generator, transmitter, and distributor serving over 3 million connected customers.

• Operates a generation capacity of approximately 1,800MW
• Manages over 14,000 km of transmission and distribution lines
• Recently commissioned the 2,115MW Julius Nyerere Hydropower Plant

What's Next

The Shinyanga solar project is expected to begin construction in 2026 with commercial operations targeted for 2028.

• Project preparation and procurement to proceed through 2026
• Smart grid upgrades will modernize TANESCO's transmission network
• Success could unlock additional AFD solar investments across Tanzania