The overall goal of the Program is to stimulate economic growth, increase household incomes, and raise the quality of life through targeted infrastructure investments in transport, energy, and water.
Transport Sector Project ($372.8 million)
Transport infrastructure in Tanzania is inadequate to meet the needs of the country's widely dispersed population. The Transport Sector Project aims to reduce travel times and provide access to basic social services by rehabilitating a portfolio of trunk roads on the mainland and the airport on Mafia Island, both originating from the GoT's Transport Sector Investment Program (TSIP) for mainland Tanzania, as well as selected rural roads on Pemba Island in Zanzibar. To ensure the sustainability of these investments, the Project will provide technical assistance to enhance the maintenance capacity of the GoT in both the road and airport sectors, as listed below:-
- Mainland Trunk Roads.
- Zanzibar Rural Roads.
- Road Maintenance.
- Mafia Island Airport.
Energy Sector Project ($206.5 million)
Currently in Tanzania, industry, businesses, and households suffer from either a lack of energy services or unreliable service. Where electricity is available, the quality of supply is poor, and blackouts and other service interruptions are common. The Energy Sector Project will improve electricity service and coverage in Tanzania through the addition of new power generation, transmission and distribution capacity, as well as through much needed reinforcement of the existing network. The Project is expected to result in improved reliability and quality of electric power, and the extension of service to communities and businesses not currently served, in the following areas:-
- Zanzibar Interconnector
- Malagarasi Hydropower & Kigoma Distribution
- Distribution Systems Rehabilitation & Extension
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Water Sector Project ($66.3 million)
Tanzania faces a serious shortage of access to potable water, resulting in a high incidence of water-related disease, decreased workforce productivity, and a challenge for business growth. To address these issues, the GoT, in coordination with other stakeholders (including donors) developed a 20-year program for transforming the sector known as the Water Sector Development Program (WSDP). The WSDP identifies all activities under the Water Sector Project as priorities. The Water Sector Project focuses on improving water supply infrastructure in Dar es Salaam and Morogoro, and is designed to increase the quantity and reliability of potable water for domestic and commercial use. By increasing the volume of water supply, the Water Sector Project is expected to reduce the prevalence of water-related disease, to increase time available for productive activities such as education, and to promote greater investments in physical capital. The following are the areas which will be improved:-
- Lower Ruvu Plant Expansion
- Non-Revenue Water
- Morogoro Water Supply
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The Program's investments in the transport, energy, and water sectors are critical to Tanzania's development.
First, poor transport infrastructure is a constraint to Tanzanian economic growth. In Tanzania, roads are essential for commerce (especially agricultural commerce), and for trade between Tanzania and its neighboring countries, including Kenya, Mozambique and Malawi. The rehabilitation of the roads, therefore, will help connect road users and communities along the rehabilitated roads with markets, schools and health clinics, and promote the expansion of economic opportunities by reducing transport costs and thus increasing the economic viability of various local products, including cash crops. The rehabilitation of the airport on Mafia Island will allow for easier, more efficient, and safer access to the island, resulting in increased tourist and business travel to and from the mainland, leading to additional income on the island.
Second, an inadequate supply of energy is also a constraint to private investment and economic growth in Tanzania. Energy is essential for activities in industry, agriculture, transport and water service supply, and for the provision of social services such as education and health. Moreover, it serves as an important catalyst for private sector development. The Energy Sector Project will result in households and businesses receiving more reliable and better quality electricity, and many currently un-served households and businesses will receive electricity for the first time.
Third, a shortage of access to potable water by both households and businesses is another constraint to Tanzanian economic growth addressed by the Program. Water is an important input to production in many industries, and expanding the supply of water will allow the expansion of economic activity as well. In addition, lack of access to potable water results in a high incidence of water-related disease, burdensome healthcare costs, and decreased workforce productivity. By improving the water supply, incidence of disease and time spent collecting water will decrease, resulting in potential gains in labor productivity. Households, businesses and institutions relying on network water will benefit from improvements in water supply under the Water Sector Project.
Finally, the Compact development process itself has already contributed to encouraging the GoT to undertake important policy reforms in the transport, energy, and water sectors, the absence of which have constrained economic and private sector growth in Tanzania for years. Moreover, the various investments in physical infrastructure during the implementation of the Program will be tied to continued policy and sector reform.