World Bank Supports Power Sector and Natural Gas in Tanzania

In a Press Release in Washington on March 26, 2013, The World Bank Board of Executive Directors approved two International Development Association (IDA) credits amounting to US$121.46 million to Tanzania for power sector reforms, forging public-private partnerships, and strengthening national capacity for the optimal use of the country’s natural gas reserves.

“We are committed to reducing the cost of power supply by expanding the use of domestic natural gas in electricity generation and promoting private sector participation in both the power and gas sectors” said Hon. Professor Sospeter Muhongo, Minister of Energy and Minerals, Tanzania.

“We are taking concrete steps to strengthen power sector governance and to improve planning and implementation capacities for bringing more electricity to homes and businesses across Tanzania.”

Tanzania Investment Guide 2026 Free Edition

The Tanzanian power sector is facing major challenges due to below average rainfall that have reduced hydropower generation and due to inadequate past investment in power generation capacity.

As a result, the state-owned electricity utility, TANESCO has increased the use of expensive emergency generation plants that have placed the sector in financial difficulties.

The energy sector’s financial woes are expected to peak in 2014, bringing the cumulative deficit over the period 2011-2014 anywhere between US$760 million to US$1 billion.  Less than 19 percent of Tanzania’s 46 million citizens have access to electricity.

“With these two new operations, the World Bank will help to place the power sector on a more sustainable path, and will help create foundations to maximize benefits of natural gas reserves for all Tanzanians” said Philippe Dongier, World Bank Country Director for Tanzania.

The two projects consist in:

Tanzania Investment Guide 2026 Full Edition

A Development Policy operation of US$100 million (the first of series of three) that will support the Government of Tanzania to: a) address the financial gap in the power sector, especially in TANESCO, b) help expand power generation using natural gas, including through public-private partnership, c) reform sector institutions, and d) strengthen policy and institutional foundations for maximizing the benefits of natural gas reserves.

A complementary technical assistance project of US$21.46 million that will help build critical capacity for the power and gas sectors.  This project is expected to be co-financed by the Canadian International Development Agency (CIDA).

The projects involve collaboration across the World Bank Group, with Jacques Morisset, Lead Economist based in Dar es Salaam serving as team leader for the Development Policy operation, and Robert Schlotterer, Senior Infrastructure Finance Specialist and Alexander Huurdeman, Senior Gas Specialist, serving as co-team leaders for the capacity building project.

Want to know more about Energy in Tanzania? Our free overview of the Tanzania Business and Investment Guide 2026 covers Energy, plus key sectors and investment opportunities. The complete 141-page edition includes policies, taxation, key regulations, full macroeconomic data, and sources, and is also available at no cost upon completion of a short form.

Download Free OverviewGet the Full Edition for Free
Related Posts
Presidents Samia Suluhu Hassan and Yoweri Museveni witness the Tanga Regional Energy Hub MoU signing, State House Dar es Salaam
Read More

Tanzania, Uganda Sign MoU for USD 20 Billion Tanga Energy Hub

Tanzania and Uganda signed a Memorandum of Understanding at State House on 6 August 2026 to develop Tanga as a Regional Energy Hub, a deal Tanzania's Energy Minister said could attract investment exceeding USD 20 billion. The agreement, signed by the Uganda National Oil Company, the Tanzania Petroleum Development Corporation, and Vitol Bahrain E.C., covers petroleum storage, refining, logistics, and distribution infrastructure at the port of Tanga, building on the East African Crude Oil Pipeline.
Samia Suluhu Hassan Africa50 Forum Dar es Salaam 2026
Read More

Tanzania President Calls for Faster Infrastructure Delivery Via PPPs as Country Signs Five Agreements on Power Transmission, Gas and Health

Tanzania President Samia Suluhu Hassan called for faster infrastructure delivery through public-private partnerships (PPPs) as Tanzania signed five agreements at Africa50's Infra for Africa Forum, covering an electricity transmission PPP with TANESCO, natural gas supply to local industry with TPDC and TAQA Arabia, and expanded kidney dialysis care. Africa50 secured USD 70 million in new capital from British International Investment, the Italian Climate Fund and Proparco, the private sector financing arm of the French Development Agency group (AFD).
Tanzania Contract 100 MW Kishapu Solar Project Phase Two
Read More

Tanzania Signs TZS 204.4 Billion Contract for 100 MW Kishapu Solar Project Phase Two

Tanzania has signed a contract worth approximately TZS 204.4 billion with Sagemcom Energy & Telecom SAS and STEG International Services for the 100 MW second phase of the Kishapu Solar Power Project in Ngunga, Shinyanga Region, taking the full 150 MW project's cost to approximately TZS 323 billion. The contract follows completion of the project's 50 MW first phase, which cost TZS 118.6 billion and became Tanzania's first grid-connected utility-scale solar plant in March 2026.
Eastern Africa Power Pool (EAPP) 2026 Council of Ministers Meeting
Read More

Eastern Africa Power Pool Ministers Agree to Accelerate Regional Electricity Market

Eastern Africa Power Pool (EAPP) member states have agreed to speed up the implementation of a regional electricity market aimed at expanding cross-border electricity trade and strengthening energy security. Tanzania said the initiative will support industrial growth, attract investment, and improve the reliability of electricity supply across the region.