DAR ES SALAAM, May 7 (Xinhua) -- The government of Tanzania was in final talks with the Indian government to secure a 500 million U.S. dollars loan for undertaking water projects, a senior official said on Monday.

The east African nation's Minister for Water and Irrigation, Isaac Kamwelwe, told the National Assembly in the capital Dodoma that the water projects will end shortage of water facing many parts of the country, the second largest economy in east Africa.

Tabling budget proposals for the Ministry of Water and Irrigation in the House, Kamwelwe said the government was finalizing talks with the government of India before signing the loan contract.

He named some of the areas to benefit from the loan as Muheza, Wanging'ombe, Makambako, Kayanga, Songea, Zanzibar, Njombe, Mugumu, Manyoni, Sikonge, Kasulu, Rujewa, Kilwa Masoko, Geita, Chunya and Makonde.

"These areas face acute water shortages," said Kamwelwe.

The minister said the government was in the process of amending water laws to provide for stiff penalties to those who will be found tampering with or destroying water infrastructure.

In November last year, Tanzania's Minister of State in the Vice-President's Office responsible for Environment, January Makamba, directed all local government authorities in the country to take an inventory of all water sources for protection.

"The inventory of water sources will help the government to protect them from degradation and improve those that have been affected by human activities," Makamba told the National Assembly.

He made the remarks as the latest report by the World Bank revealed that water scarcity facing Tanzania could derail the east African nation's growth and poverty reduction efforts.

"Tanzania needs to urgently improve the management of its water," said the World Bank report.

In its report, the World Bank said against the rapidly expanding economy and population in Tanzania, renewable per capita freshwater resources dropped over the past 25 years from more than 3,000 cubic meters per person to around 1,600 today.

"The decline, which is driven by increasing demand for a finite resource, will be likely to continue and reach around 1,400 cubic meters per person by 2025, well below the 1,700-cubic meter per person threshold that defines water stressed countries," said the report.