Tanzania has finally opened doors to multinational investors in the energy sector in power generation, transmission and distribution sub-sectors.
The move ends 50 years of monopoly control of all three aspects of electricity business where long standing prohibitions prevented independent power companies to generate and sell electricity to the public, except by often costly contracted generation for the Tanzania Electric Supply Co. Ltd (TANESCO).
Energy and Minerals minister Prof. Sospeter Muhongo disclosed this change of policy after concluding a meeting with TANESCO officials, where he said the government shall allow private investors in the power sector as part of measures to reform the power sector and bring to an end electricity woes in the country.
Involving the private sector in power generation would address the long term power supply challenge, the minister declared.
Briefing reporters after the meeting with TANESCO officials, the minister indicated that the meeting between TANESCO management officials and those from the ministry discussed how they can work together to address existing power sector problems.The move ends 50 years of monopoly control of all three aspects of electricity business where long standing prohibitions prevented independent power companies to generate and sell electricity to the public, except by often costly contracted generation for the Tanzania Electric Supply Co. Ltd (TANESCO).
Energy and Minerals minister Prof. Sospeter Muhongo disclosed this change of policy after concluding a meeting with TANESCO officials, where he said the government shall allow private investors in the power sector as part of measures to reform the power sector and bring to an end electricity woes in the country.
Involving the private sector in power generation would address the long term power supply challenge, the minister declared.
“Investors and businessmen capable of producing electricity are welcome to invest in this sector so as to be sure the country has sufficient power supply for ten or twenty years to come,” he elaborated.
He stated that Tanzania is blessed with abundant power sources that can be used to produce electricity at a relatively low cost.
“Exhaustive utilisation of various energy sources including coal, gas, hydro, solar and wind will totally expunge the power woes that consumers have faced for years. This investment drive will ensure reliable and cheap power supply,” he emphasized.
Pointing out that coal is cheaper than gas in power generation, he said that if investors effectively use abundant coal resources available in the country this shall boost generation capacity and make the power more affordable.
The minister did not address possible contention arising from environmental concerns were burning coal to become a major source of power generation as in South Africa or China.
About 1,400 megawatt generation capacity has already been established but the country needs about 1,000 megawatts generation in addition, so investors who can put up plants generating 100mw and above are welcome, he said.
Investor can opt for electricity generation from any source, be it gas, coal or water, he said, assuring investor not to worry about bureaucracy. The ministry has set up a special department within the ministry consisting of new people who will be handling all such problems rapidly, he said.
The ministry had set three months to work on existing challenges in the sector to address those that can be solved administratively, he said.
He also directed the regulatory agency EWURA, TANESCO and the Tanzania Petroleum Development Corporation (TPDC) to submit to him proposed new power tariff recommendations within two weeks, by January 1.
SOURCE: GUARDIAN ON SUNDAY
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