The Tanzanian energy ministry has issued its Power System Master Plan (PSMP 2016–2040), mapping out how much will be required in investments to balance the sector.
On Monday, the ministry released its power roadmap, which stated that 70% of capital spending would be financed by debt and the rest by the government’s own resources, the Standard reported.
“The financing requirement to implement the PSMP 2016–2040 is about $46.2 billion for capital cost,” the updated plan said.
It added: “The cost includes investment on generation, transmission and substations. Generation accounts for almost 80% of the total investment cost.”
It is reported that Tanzania aims to boost power generation capacity to 10,000MW over the next decade from around 1,500MW.
This target is envisioned to be achieved by using some of the country’s vast natural gas and coal reserves in efforts to end chronic energy shortages and boost industrial growth.
Tanzania energy ministry seeking loan
In January, the energy ministry stated that it was seeking a loan of $200 million from the World Bank to relieve the indebted national power supplier Tanzania Electric Supply Company (Tanesco), after the country’s president refused to allow the utility to raise prices to cover its costs, media reported.
As a result, President John Pombe Magufuli, fired the public power utility’s managing director, Felchesmi Mramba.
Magufuli said an increase in electricity rates would “…stunt his plans to industrialise the east African country.”
According to media, Tanesco has debts of $363 million, up from $250 million at the end of 2015.
Media further reported that on 31 December 2016 Tanzania’s energy regulator approved a tariff hike of 8.53%, less than half of what the utility said it needed to cover the losses.
The power system master plan has noted that around 40% of Tanzania’s estimated population of 50 million currently has access to electricity.
The government wants to boost the electrification rate to 90% by 2035, media stated.