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Facilitating small power projects in Tanzania


31 May 2012 – In Tanzania, power projects of between 100 kW and 10 MW are now allowed to feed the national grid, following the approval of small power project guidelines by the Energy and Water Regulatory Authority (EWURA).
According to the new guidelines, EWURA provides standardised small project tariffs aimed at accelerating rural electrification. The move is designed to accelerate electricity access and promote development and operation of small power projects by local and foreign private investors. The framework includes introduction of standardised power purchase agreement and standard tariff methodology, which will be applicable between the developer and the buyer.
The guidelines also aim at promoting renewable energy, intended to supply commercial electricity to the national grid. The framework will reduce negotiation time and cost and opens the possibility of implementing rural electrification projects.

One of the small projects that will be enabled by such guidelines is a biomass project being undertaken by KMR Infrastructure of the USA to produce 10 MW of electricity in Kigoma and replace expensive diesel generators.
Up to US$25 million will be invested into this biomass power plant in Kigoma over the coming three years. Kigoma municipality uses diesel-powered generators with installed capacity of 11 MW. However, these are only producing three to four megawatts and Tanesco spends about US$640,000 a month running the generators but only collects about US$85 million over the same period from customers.