The World Bank Group has approved a $1.6 billion financing package for the Regional Energy Transmission, Trade & Decarbonization Program for Eastern Africa (RETRADE-EA), a ten-year initiative aimed at strengthening regional power integration, expanding access to electricity, and promoting economic growth across Eastern Africa. The program seeks to improve the affordability, reliability, and sustainability of electricity by enabling greater cross-border power trade and cooperation among countries in the region.
RETRADE-EA will support both physical infrastructure development and institutional reforms necessary for efficient regional electricity trading. The initiative will enhance cross-border connectivity, improve power system resilience, and facilitate the integration of countries that remain outside the regional grid, including Somalia. It will also support the establishment of the Eastern Africa Power Pool’s Day-Ahead Market, improve regional planning and operations, strengthen governance and regulatory harmonization, and encourage greater private sector participation in transmission infrastructure.
A key component of the first phase is the Uganda-Tanzania Interconnector Project, which will receive $250 million in concessional financing through the International Development Association. The project will finance a new high-voltage transmission line connecting Uganda and Tanzania, allowing Uganda’s surplus clean energy resources, particularly hydropower, to be supplied to regional electricity markets.
The first phase also includes support for the Eastern Africa Power Pool through a $10 million grant from the International Development Association and an additional $3.5 million grant from the Energy Sector Management Assistance Program. These resources will strengthen regional market coordination and institutional capacity, contributing to the goal of facilitating more than 5,000 gigawatt-hours of cross-border electricity trade annually by 2031 while improving energy security and affordability across member countries.
Uganda currently produces more electricity than it consumes domestically, resulting in underutilized hydropower capacity. To address this, the Uganda-Tanzania Interconnector Project will construct approximately 260 kilometers of 400-kilovolt double-circuit transmission lines linking Wobulenzi, Masaka, and Mutukula at the Uganda-Tanzania border. The infrastructure will provide a transfer capacity of 1,000 megawatts and establish a vital connection between Uganda and the broader regional power network.
By 2031, the project is expected to facilitate at least 452 gigawatt-hours of annual electricity trade between Uganda and Tanzania. Across the wider Eastern Africa Power Pool, increased use of Uganda’s clean hydropower is projected to reduce reliance on expensive and carbon-intensive thermal power generation, helping avoid approximately 25.8 million metric tons of carbon dioxide emissions. The initiative is expected to enhance regional energy security, lower electricity costs, support economic development, and contribute significantly to Eastern Africa’s clean energy transition.
