World Bank to Help East African Power Crisis
Date: 14-Jul-06
Country: TANZANIA
Author: Lesley Wroughton
They were responding to an appeal for help from Juma Volter Mwapachu -- secretary-general of the East African Community, which groups Uganda, Tanzania and Kenya -- during a meeting with visiting World Bank President Paul Wolfowitz.
Tanzania and Uganda have been worst hit by the power crisis and are currently enforcing rolling blackouts that are hurting their economies.
"In the short term we need a quick intervention," Mwapachu told Wolfowitz. He said the EAC was working on developing an east African power grid in which all three countries could share resources and storage capacity.
Mark Tomlinson, the World Bank's country director for regional integration, said power shortages facing the governments over the next few years would hurt the region's competitiveness unless the situation was addressed.
An estimated US$1.3 billion in new investment in the EAC region was needed for additional power generation and an extra US$1 billion for transmission over the next five years, he said.
Regional generating capacity is around 1,200 megawatts, but current use is about 800 megawatts.
Speaking on the sidelines of the meeting, bank officials said they were preparing a loan of around US$100 million for thermal power to Uganda, which is using water from Lake Victoria, already at its lowest levels.
A decision on the funding is likely after the August recess of the World Bank board of member countries, they said.
In Tanzania, the bank is considering using US$80 million left from a loan for the Songo Songo gas pipeline for power transmission and generation.
Meanwhile, the government is considering using its savings from debt relief to build capacity, the officials said.
The drought, the worst in decades, has caused significant load shedding, which is costing the economy about US$1.7 million per day, or US$330 million for the year.
The bank estimates the government will likely lose revenues through value added tax on electricity consumption amounting to about US$3 million this year.