Tanzania will sign a deal this week for the construction of a $3-billion hydroelectric power plant, the President said in remarks broadcast on state television on Tuesday.

President John Magufuli did not name the company awarded the contract for the power plant and dam to be built in the Selous Game Reserve, a UN-designated world heritage site in southern Tanzania. Government sources told Reuters the contract would be signed with Egypt's Arab Contractors.

Magufuli said the East African country was moving ahead with the project due to improved revenue collection by the government, without giving details.

The 2 100 MW project would more than double the country's power generation capacity. But the project's location is in a World Heritage site and has faced opposition from conservationists. They have said the construction of a dam on a major river that runs through the Selous Game Reserve could affect wildlife and their habitats downstream.

The government invited bids in August last year for the project at Stiegler's Gorge which is in the Selous Game Reserve.

Egypt's El Sewedy Electric Co has said it will also participate in the construction of the dam. Arab Contractors will have a 55% stake in the project and El Sewedy 45%, Ahmed Hassouna, El Sewedy's head of marketing, said on Tuesday.

Covering 50 000 km², the Selous Game Reserve is one of the largest protected areas in Africa, according to Unesco. It is known for its elephants, black rhinos and giraffes, among many other species.

The World Wide Fund for Nature conservation group said in a report in July last year the proposed large-scale hydropower dam "puts protected areas of global importance, as well as the livelihoods of over 200 000 people who depend upon the environment, at risk."

"The impact on Tanzania's largest river would affect many ecosystem services it provides. It would affect tourism in Selous downstream in some of the most abundant wildlife areas in the game reserve,” it said.