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Tuesday, April 9, 2013

Tanzania Energy Sector Expected to Surge With World Bank Loan

              

BY DEODATUS BALILE, 8 APRIL 2013


Dar es Salaam — An interest-free 196.5 billion-shilling ($121.5 million) loan from the World Bank is expected to help Tanzania stimulate competition in the private sector and boost capacity, output and efficiency in electricity and gas production.
"The cost of power supply is too high in our country," Minister of Energy and Minerals Sospeter Muhongo told Sabahi. At present, the government is the country's main producer of electricity. The state-owned Tanzania Electrical Supply Company (TANESCO) currently has a capacity of nearly 1,100 megawatts daily, but opening up energy production to private companies will encourage competition and drive down electricity costs for consumers, Muhongo said.
The future growth of the Tanzanian economy depends on the country having enough electricity, which will attract more investment, he said. Tanzania plans to roughly triple its electricity production to 3,000 megawatts daily by 2015. Such an endeavour likely will cost nearly 1.6 trillion shillings ($1 billion), so the World Bank loan will cover part of the financial deficit for reaching that target, Muhongo said.
TANESCO acting managing director Felchesmi Mramba expressed gratitude for the loan, which the World Bank's Boards of Executive Directors approved March 26th. It is crucial, he said, because boosting the power and gas industries are priorities for Tanzania.
"No nation in the world has ever developed without enough energy," Mramba told Sabahi. "In fact, most developed countries have managed to make it with the support -- be it credit or donation -- from these giant institutions, [which] helps to build strong systems that serve countries' economies."
By investing in gas-fuelled power generation projects, the country will be able to turn around its economy, said Joseph Simbakalia, regional commissioner in Mtwara, where the government is constructing a controversial gas pipeline to power stations in Dar es Salaam.
Economic projections indicate that through proper investment in its energy sector, Tanzania could become Africa's biggest economy within 15 years, Simbakalia told Sabahi. "Today we are the third-largest gold producer in the world," he told Sabahi. "We have the Nickel Project in Ngara district that needs 800 megawatts of electricity to take off. No doubt, the opportunity has come to this country. Let us thank our development partners who are supporting us towards achieving this goal."
In Dar es Salaam's Ilala district, resident Aristides Majura, 47, said the loan is encouraging because it means the World Bank recognises the importance of supporting the Tanzanian energy sector.
The country's economy has suffered, he told Sabahi, because businesses continually have to shutter because of a shortage of electricity. "You start a shop, but you cannot sell a soda here in Dar es Salaam. Most of the time there is no power. Customers need cold drinks," Majura said. "Investors in big factories need enough power as well. I think the World Bank has done something good".

Source: allAfrica

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