Tanzania’s government has announced plans to invite private investment into the country’s electricity transmission projects for the first time.
Speaking on the sidelines of the Africa Energy Forum in Cape Town, Felchesmi Mramba the Permanent secretary of Tanzania’s Ministry of Energy said the government has received strong interest from potential investors following the Cabinet’s approval last year to open up the transmission segment to private players.
The move marks a new milestone in the country’s efforts to deepen private sector participation in the energy sector.
He said the government, through the National Energy Compact, has agreed to kickstart the private investment model with one or two transmission projects that will be formally announced later this year.
“We have agreed with the International Finance Corporation (IFC) that in September they will come to Tanzania, where we will begin preparing tender documents that will open these projects to qualified investors,” Secretary Mramba said.
In recent years, Tanzania’s government has opened up generation to Independent Power Producers (IPPs), while the transmission and distribution value chains have remained under the control of the state-owned Tanzania Electricity Company Limited (TANESCO).
The new policy shift is intended to address infrastructure gaps, keep pace with growing power demand and facilitate industrialization, Mr Mramba said.
The move comes at a time when Tanzania is implementing the Mission 300 Initiative to connect 8.3 million new customers by 2030, in line with the country’s broader electrification strategy.
Secretary Mramba said the recent interest shown by the private sector at the Africa Energy Forum was a positive sign that Tanzania’s energy sector reforms were gaining international traction.
“There is great enthusiasm from investors to come to Tanzania and invest in power infrastructure. As the economy grows, we need to expand the scale and scope of our investments to ensure energy remains the backbone of our economic growth.”
Tanzania is currently enjoying a power surplus following the completion of the 2.1 GW Julius Nyerere Hydroelectric, but officials say the government is now focused on scaling up future capacity in both generation and transmission to stay ahead of anticipated demand.
However, Mr Mramba said Tanzania is seeking a total of $12.9 billion to fast-track access to affordable and sustainable energy for 42 million people by 2030 as the country is implementing different initiatives under the ambitious continental Mission 300 initiative.
The funding will be used to support a wide range of energy projects over the next five years aimed at achieving universal access.
