HomeRegional NewsEast AfricaTanzania new electricity plan: US$1.4bn a year on generation

Tanzania new electricity plan: US$1.4bn a year on generation

In East Africa, Tanzania plans to spend around US$1.4 billion a year on power generation as part of a new roadmap to drive the country’s energy sector forward.

The newly released energy blueprint, dubbed Electricity Supply Industry Reform Strategy and Roadmap 2014-2025, shows that the government hopes to increase installed generation capacity from the current 1,583 MW to more than 10,000 MW over the next 11 years, according to local media source East Africa Business Week.

The document shows that nearly 4,000 MW will be generated from natural gas and 200 MW from geothermal.

Minister for Energy and Minerals Sospeter Muhongo said the plan requires funding of US$11.4 billion or about US$1.9 billion per annum, of which 73.5 per cent is for generation.

This amount would be used for paying state utility Tanzania Electric Supply Company (Tanesco) debts (US$412 million), capacity charges for existing independent power producers (US$635 million) and other expenses (US$101.2 million).

This initiative is the biggest undertaking in electricity sub-sector in Tanzania since the de-specification of Tanesco from privatization in 2005.

Funding energy infrastructure

Despite the ambitious targets laid out in the electricity supply blueprint, economists believe that availability of funds could be a challenge, as the government – the primary investor in the power sector – is still struggling to improve revenue collection in the country.

Tanzania is therefore looking to the private sector in a shift that will see the financing of power projects move away from government hands and reduce public expenditure on electrical supply projects.

Tanzania has diverse energy resources including natural gas, hydro, coal, biomass, geothermal, solar, wind and uranium.

As of May 2014, Tanzania’s total installed generation capacity was 1,583 MW composed of hydro 561 MW (35%), natural gas power plants of 527 MW (34%) and liquid fuel power plants of 495 MW (31%).

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