Tanzania Gas Power Plants: USD1.063b Investment Needed

Tanzania’s installed capacity of gas fired power plants is projected to increase by 150%, from 711MW in 2015 to 1,774MW by 2020, which requires an investment of about USD1.063b.

This was indicated in the recently published final draft of the Natural Gas Utilisation Master Plan (NGUMP) 2016–2045 by the Ministry of Energy and Minerals of Tanzania.

In 2015, the installed capacity connected to the national grid was 1,516MW, out of which gas fired amounted to 711MW, thermal amounted to 243.4 MW and hydropower accounted for 561MW.

It is projected that the installed capacity in Tanzania will be 4,436MW by 2020 with natural gas accounting for 40% of the generation mix (1,774MW).

Estimates included in the NGUMP show that a typical investment requires approximately USD200m for the construction of a 200MW facility.

In line with these estimates, an additional 1,063MW is required by 2020 from the current existing capacity of 711MW. This will require an investment of USD1.063b.

“[…] the adequate power generation from natural gas will replace the expensive power generation from liquid fuel, thereby increasing saving of forex that could have otherwise been used to import fuel. Availability of reliable electricity will generate significant opportunities for industrialization and rural electrification and hence improve social and public services,” NGUMP indicates.

Tanzania Natural Gas

Tanzania has the second largest natural gas reserves in East Africa with more than 55 trillion cubic feet (tcf) so far discovered, behind Mozambique with 100 tcf according to the Energy Information Administration (EIA).

The Tanzania Petroleum Development Corporation (TPDC) estimates that the country’s gas fields are large enough to cover the domestic power requirements.