In February 2008, the Millennium Challenge Corporation signed a five-year, $698 million compact with the Government of Tanzania seeking to reduce poverty and stimulate economic growth by increasing household incomes through targeted investments in transportation, energy, and water. The investments in three projects will help Tanzanians address the inadequate transportation network by improving roads that will increase commerce and help connect communities with markets, schools, and health clinics; improve the reliability and quality of electric power and extend electricity service to communities not currently served; and increase the availability and reliability of potable water for domestic and commercial use which will increase health and productivity. The compact in Tanzania entered into force (EIF) in September 2008, formally initiating the five-year timeline for project implementation.

This project will improve electricity service and coverage through the addition of new power generation, transmission and distribution capacity, as well as through much needed reinforcement of the existing network. The project will increase investment and economic activity to businesses and communities, some of which will receive electricity for the first time

• Lay a submarine electric transmission cable from the mainland to Unguja Island (Zanzibar), as well as extend the distribution network; and
• Rehabilitate the existing distribution infrastructure and a number of distribution line extensions to unserved areas in six regions (Mwanza, Iringa, Mbeya, Dodoma, Tanga, Kigoma and Morogoro).

This project aims to reduce transport costs and travel times, which will facilitate access to social services and markets and will increase tourism potential.

• Rehabilitate and upgrade three trunk roads on the mainland;
• Upgrade the airport on Mafia Island; and
• Repair selected rural roads on Pemba Island (Zanzibar).

The project also includes funds for road maintenance to enhance Tanzania’s capacity to maintain its road network.

This project aims to increase the quantity and reliability of potable water for domestic and commercial use to reduce the incidence of water-related disease, increase time available for productive activities including education, promote greater investments in physical capital, and, ultimately, lead to an increase in income.

• Expand the capacity of the Lower Ruvu water treatment plant;
• Improve the system efficiencies of the Dar es Salaam Water and Sewerage Authority;
• Rehabilitate water intake and water treatment plants; and
• Improve the existing distribution network in the city of Morogoro.