A $455 million loan has been approved by the World Bank to Tanzania under its International Development Assistance (IDA) programme to support financing of power projects in the East African nation.
The financing from the International Development Assistance program will give low-interest loans to the world's poorest countries and will also fund construction of high voltage transmission infrastructure to connect Tanzania to regional power markets in eastern and southern Africa.
"The $455 million credit will finance construction of critical high voltage transmission infrastructure that will support the electrification of the southern and northwestern regions of Tanzania," the World Bank said in a statement.
The government said for fiscal year 2018/19 (July-June) it plans to raise 2 trillion Tanzanian shillings ($880 million) in its budget for from concessional grants and loans to finance development projects.
The country has reserves of over 57 trillion cubic feet (tcf) of natural gas but faces periodic power shortages as it relies on hydropower dams in a drought-prone region.
President of Tanzania, John Magufuli last year stated that Tanzania needed to invest $46.2 billion over the next 20 years to revamp its aging energy infrastructure and meet soaring electricity demand.
According to the energy ministry, Tanzania plans to increase power generation capacity from around 1,500 MW to 5,000 MW over the next three years by building new gas-fired and hydroelectric plants.