The implementation of the 50MW wind power generation project in Tanzania, estimated to cost $136m, is likely to be delayed following the government’s decision to withdraw from guaranteeing the project, the Daily News reported.
This follows the decision by Exim Bank of China, which had agreed to provide loan for financing the project, to reduce the loan facility’s repayment term from 25 years to 20 years, and increase interests from 1% to 2%.
The project had been set to be implemented in a joint venture agreement between the National Development Corporation (NDC), Tanzania Electric Supply Company (Tanesco) and Power Pool East Africa with ownership structure of 60%, 20% and 20%, respectively.
However, the Controller and Auditor General (CAG), Professor Mussa Assad, cautioned that the decision to approve or disapprove should have been made earlier, to reduce unnecessary time lag and project cost overruns hence improving government trust, All Africa wrote. In fact, the agreement to develop the Geo Wind Power Tanzania Limited was inked in 2013.