To secure a better electricity future, the Tanzanian government in partnership with the private sector aims to invest USD 1.2 billion in power transmission projects. The project is expected to set a historic precedent as it would be the first ever public-private partnership in power transmission in Tanzania, marking the end of monopoly in the energy sector.
With an installed grid capacity of 1,899.05 MW and an estimated growth rate in electricity demand of 10-15% per year, Tanzania, through partnerships with the private sector, aims to develop its electricity infrastructure by investing USD 1.2 billion in transmission projects.
The first goal is to tap into private sector funds to complete government projects, then utilize advanced technology from the private sector, and finally employ effective management skills that the private sector often possesses.
DAVID KAFULILA , Director, Tanzania Public Private Partnership Center
The generation, transmission and distribution of electricity in Tanzania is handled by the Tanzania Electric Supply Company (TANESCO), which is wholly owned by the government and accounts for 98% of the electricity generated in the country. Although the government insists that local firms should take the helm in these public-private ventures, Experts say there are still major challenges to overcome, including filling skill gaps within government agencies and creating a sound regulatory environment conducive to investment.
The previous law barred Tanzanian companies from leading major projects. With the new law, local firms can spearhead significant undertakings while collaborating with foreign companies as needed.
MWIGULU NCHEMBA , Minister of Finance
As Tanzania aims to increase its electricity generation capacity to 5,000 MW by 2025, two private companies have so far expressed interest in investing in the expansion of the power sector, but a series of approvals must be obtained before these projects can take off.