Tanzania needs $2.9bn investment to meet power demand

Power transmission grid04 February 2014, Dar es Salaam – It has been predicted that Tanzania’s power and energy infrastructure will require a new investment of about $2.9 billion annually for the period of 10 years to meet its power supply demand.

This was revealed during the Powering Africa Tanzania, a symposium which brings together key public and private sector energy stakeholders from Tanzania and beyond as well as about 200 international observers.

Speaking during the event organized by EnergyNet, a company dedicated to furthering development and investment in Africa’s power sector, the African Development Bank’s Chief of Power Engineer, Dr Babu Ram said, Tanzania’s infrastructure gap is large.

“It is predicted that Tanzania would needs to invest $2.9 billion annually for 10 years to meet its power and energy infrastructure targets,” Dr. Ram told East African Business Week.

Dr. Ram noted that spending at the level would absorb just over 20% of the country’s GDP, yet on average African nations are spending only 40% on infrastructure.

Tanzania Electric Supply Company (Tanesco)’s Managing Director, Mr. Felchesmi Mramba said that failure to replace ageing infrastructure as well as debts are the main cause of numerous operation challenges that the company is currently experiencing.

Mramba said there is need to promote investment from the private sector and put in place strategies to generate more electricity using natural gas.

He added that to ensure there is an enabling environment that supports sustainable economic growth, Tanzania needs to overcome inhibiting infrastructure challenges such as interrupted power supply.

The current electricity production method has caused the power utility to enter a large loss, according to Mramba, the power utility has been using costly rented power plants whose bill ran up to a total of Tsh26.6 billion ($16.42 million).

“Tanzania’s infrastructure gap is large and the capacity to borrow is not unlimited, so bringing in the private sector seems to be the obvious solution going forward,” said Thomas Baunsgaard, Tanzania’s Representative of the International Momentary Fund



– East African Business Week

About the Author