AfDB lends $145m to construct regional power line

NAIROBI — The African Development Bank (AfDB) has approved a $145m loan to fund the building of an electricity line between Kenya and Tanzania to improve regional power connections, it said.

East Africa has some of the fastest-growing economies on the continent but electricity shortages deter investment, pushing up business costs and sustaining poverty and inequality.

The AfDB said on Wednesday that the funding would help construct 508km of transmission lines and substations along its path to allow for the transfer of 2,000MW of electricity in either direction between Kenya and Tanzania.

"The Kenya-Tanzania Interconnection Project plays an important role in promoting regional integration through power trade," the AfdB said in a statement.

Earlier in January, the two countries said they were seeking a consultant to oversee the construction of the line.

Kenya is adding 5,000MW on installed capacity by 2017 from about 1,664MW now. Tanzania aims to double its generation capacity to 3,000MW by 2016.

Kenya, Tanzania and Zambia said in December they would spend $1.4bn to link their power grids by 2018 and create a regional power pool for trading electricity.

Ethiopia and Kenya are also constructing a power line aimed at improving electricity supply between the two countries.

Southern Africa already has a series of interconnections linking countries, including SA, Zambia, Zimbabwe and Mozambique, which allows them to trade power.