The Tanzanian government has recently announced that a stake of up to 49% in Tanzania Electric Supply Company (TANESCO) will be offer to the public in 2016 through a sale of shares to support the power industry’s split into separated generation, transmission and distribution units.
The announcement, done by Tanzania’s Minister of Energy and Minerals Sospeter Muhongo, follows a plan undertook by the government in December, 2015, which seeks to replace TANESCO with six private companies by 2022 to ensure competition and tariffs’ efficiency in the industry.
To reach this goal, the government is planning to invest USD 1.2 billion per annum towards 2025 to increase the installed power capacity from the current 1,583 MW to 10,000 MW in the same period, explained Minister Muhongo.
The government invites all those investors able to develop projects with a power generation of at least 100 MW from coal, gas, hydro, solar, wind, and thermal to come up with ideas to ensure that the country will count with enough, reliable and affordable energy for its development goals in the next 20 years, he added.
The participation of private investors is needed for the development of this plan and TANESCO’s financial structure is currently being assessed to establish a payments’ plan and payoff its total debts by 2021 to strengthen governance and performance in the energy sector, explained TANESCO’s Commissioner of Energy and Petroleum Affairs, Mr. Hosea Mbise.
With a better financial performance and more competitive electricity distribution, a decrease in Tanzania’s average electricity tariff will be achieved, from USD 0.14 per kW-h to USD 0.09 per kW-h towards 2022 according to the African Development Bank (AfDB).
A reduction in the average electricity tariff for industrial use, from USD 0.21 per kW-h to USD 0.12 per kW-h is expected in the same period.
Finally, it will support an increase in Tanzania’s GDP growth from the current 6.8% per annum to 10.0% per annum in 2022 says the AfDB.