Tanzania has secured a loan from the Exim (Export-Import) bank of China to build a $684m 300 MW gas fired power plant at Mnazi Bay in the south of the country.

The plant will be built by China National Machinery & Equipment Import & Export Corporation (CMEC) and German engineering group Siemens with implementation due by June 2012, said a government statement.

Construction of a 1100 km power transmission line from Mtwara in southern Tanzania to the central Singida region is also part of the project, which should help resolve chronic power shortages that have hit Tanzania’s growth.

“Electricity to be generated from the project will be hooked to the national power grid … Six regions that were not in the power grid will be connected thanks to this project,” said the statement.

China has emerged as the main source of funding for major infrastructure projects in Tanzania, including construction of a $1bn natural gas pipeline. Recent discoveries have boosted Tanzania’s natural gas reserves to more than 10 trillion cubic feet (tcf) from a previous estimate of 7.5 tcf.

State-run power utility TANESCO has said it plans to spend 1.2tn shillings ($710m) by the end of next year on emergency power projects. Rolling blackouts have prompted the International Monetary Fund to cut its 2011 growth forecast for the country from 7.2 per cent down to 6 per cent.

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