9 April 2013 – The Tanzanian parliamentary committee on energy and minerals says that a lack of investments in the power sector, for ten years spanning 1995 and 2005, has seen the country rely on emergency power plants which are costly to operate.
During that period Tanesco was lined up for privatisation through the Parastatal Sector Reform Commission (PSRC) before the government decided otherwise. As a result of the privatisation plan Tanzania’s government did not invest in power generation and heavily depended on hydro-power which was unreliable due to prolonged droughts in some parts of the country.
The parliamentary committee chairman Victor Mwambalaswa says Tanesco has been making losses over years since it pays huge amounts of money to independent power producers (IPPs), a situation which could be avoided if it had its own generating plants. “’The power utility purchases a unit of power from IPPs at 32 cents and sells the same for 12 cents and is thus embroiled in loss making business,” Mwambalaswa says. He adds that if Tanesco had its own plants producing power through hydro, natural gas and wind it could produce electricity at just 8 cents per unit and eventually reduce the cost burden on its part and consumers as well.