Tanzania Electricity Supply to Increase in the Coming Years

The supply of Tanzania electricity is expected to increase after the construction of a 400mw coal power plant is completed within the next three years.

TANCOAL is owned by the Tanzanian firm Pacific Corporation East Africa Limited (PCEA), of which the Australian firm, Atomic Resources Limited (Atomic), is the majority stakeholder.

The exploration of minerals in Australia and Tanzania is the primary activity of Atomic Resources Limited.

Atomic has recently announced that it has signed a letter of intent to enter into an agreement with Gold Mining Limited where it will begin farming out five locations containing uranium within the republic of Tanzania.

However, in the meantime, the Company has announced that PCEA and TANCOAL have located an initial combined coal resource of approximately 179 million tons, which represents nearly twice as much coal as the historic estimate that stood at between 90 and 110 million tons.

The current power utility supply company, Tanzania Electric Supply Company (TANESCO), has an installed capacity of 1,212 MW, out of which nearly half, 562MW, is generated from hydro-power stations, while the rest if generated from a combination of diesel and gas-powered plants.

For a variety of reasons including adverse weather and aged machinery, TANESCO has recently fallen below their installed capacity rate and has, therefore, suffered also a loss in income.

In spite of the reduced production of power, industry sources have indicated that the demand for power within the country is likely to increase by 2010 and will soon exceed 1,100MW, thus making the need for increased diversification more prevalent and in need immediate attention.

With this in mind, TANCOAL was established last year in order to take advantage of the known coal resources in both Ngaka and Mhukuru, both in the Ruvma Region.

According to a recent report in the Daily News, the Director of TANCOAL Energy Limited, Peter Tsegas, has said that the most recent project of building an additional coal plant is a joint venture between TANCOAL and the National Development Corporation (NDC).

Mr. Tsegas went on to say that his company is currently waiting for the required approvals as well as a license from the appropriate authorities before moving ahead with their plans.

This project was designed in order to generate more electricity to be incorporated into the National Grid and also follows the recent change in Tanzanian law that will allow private investors to generate, distribute and trade in electricity.

Mr. Tsegas has indicated that the total estimated cost for the project is Tshs 1.6 trillion, or USD 1.2 billion.