Slide 1

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 2

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 3

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 4

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 5

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 6

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 7

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 8

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 9

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 10

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 11

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 12

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 13

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 14

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 15

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 16

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 17

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 18

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 19

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 20

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!


Slide 21

MINISTRY OF ENERGY AND MINERALS-TANZANIA

A NEW ERA IN TANZANIA’S
ELECTRICITY INDUSTRY

INTRODUCTION








Ladies and Gentlemen,
Distinguished members of the audience
Yesterday while rushing to the airport I had an unfortunate minor accident
which meant I spent time, valuable time sorting out the incident and as a result I
missed my direct flight to Joburg. I would have arrived here in this wonderful
city of Cape Town in time for a nice dinner and much deserved rest which I am
sure would have significantly improved the quality of my following presentation,
if anything just by being awake. These are the experiences of life and maybe
next time I will travel to the airport with an escort just in case I have a similar
mishap. Nevertheless, notwithstanding the fact that over the past 48 hours I
have been traveling in one form of transport or the other for over 30 hours I still
would not miss this gala event for the world.
I was in Joburg in March of this year for the Hydro Power Conference where we
first learnt of the Power Indaba. I have ever since tried to squeeze it into my
very busy schedule and more than anything I am very excited to be among
such distinguished individuals in the Power sector, and most of all the African
power sector.
In Tanzania we have a saying: it is best to declare your intentions before
something suddenly comes by and you’re forced to abandon the initial plans.
Under that pretext I wish to thank very sincerely the organizers of this wonderful
event for having us.

HISTORY










The first supply of electricity was established by Germans in 1908 at Dar Es
Salaam
Electricity power served railway workshops and part of the town
In 1920 a colonial government formed Electricity Department under the
Tanganyika Railways
In 1931, the government handed over the undertaking at Dar es Salaam, and
the new ones, which had emerged at Dodoma, Tabora and Kigoma to private
enterprise and following expanded use of electricity a legislation by the
electricity ordinance Cap 131 was put in place.
Two private companies were formed; Tanganyika Electric Supply Company Ltd
and Dar es Salaam and District Electric Supply Company LTD
In 1964, three years after independence, the government bought all shares
from two private companies and merged them into single utility under
TANESCO
Since then, TANESCO started planning new power projects aimed at meeting
the increasing industrial, commercial, and residential power demands

Cont’d …HISTORY
The power projects includes Kidatu (204 MW), Kihansi (180 MW),
Mtera (80 MW), North Pangani Falls (68 MW) and Nyumba ya Mungu
(8 MW) which are connected to the national grid system.

Many isolated diesel power stations and rural electrification schemes
have been constructed. However only about 11% of the country’s
estimated 38 million have access to reliable electricity.

ENERGY SITUATION IN TANZANIA


The main source of primary energy supply in Tanzania is biomassbased fuels particularly fuel-wood (Charcoal and firewood) which are
the main source of energy to both urban and rural areas. Biomassbased fuel account for more than 90% of primary energy supply.
Commercial energy sources i.e petroleum and electricity, account for
about 8% and 1.2% respectively, of the primary energy used.

THE CURRENT ELECTRICITY SYSTEM






The current installed capacity in 2006 from both
TANESCO and IPP assets amounts to about
1288MW
The System is hydropower dependent constituting
about 561 MW , or 44% of total installed capacity
Thermal generating capacity forms the rest, mainly
from IPP’s
Tanzania along with the sub-Saharan African
countries had experienced a prolonged drought
(From 2003-2006) and this had depleted the entire
hydropower reservoir system

Cont’d.. CURRENT ELECTRICITY SYSTEM





In 2006, the total available electricity in the country reached 3,590
GWh units that consisted of 1,981 GWh (55%) from IPP generation,
while hydro contributed 1,436 GWh (40%).
The isolated systems contributed 86 GWh (2.4%) while cross border
electricity from Zambia and Uganda amounted to 61 GWh (1.6%).
The thermal plants in the grid contributed about 25 GWh, less than two
percent of the total.

INSTITUTIONAL FRAMEWORK






The Energy sector in Tanzania involves the number of stakeholders,
both the government and non-governmental institutions within and
outside the country.
The degree of their involvement in energy activities varies significantly,
ranging from users of energy, production of energy equipment,
financiers of energy projects, researchers (R&D) , Non governmental
organizations (NGO’s), policy makers and regulation of energy sector
Key players includes Ministry of Energy and Minerals (MEM), Rural
Energy Agency (REA), Rural Energy Fund (REF), the Energy and
Water Regulatory Authority (EWURA) and Developing partners such
as the World Bank, the African Development Bank, the Swedish
International Development Agency and the Norwegian Agency for
Development

Review of the National Energy Policy




The Energy Policy is the document that charts out Government
strategies, plans and commitment in the development of energy sector,
in order to foster economic development
The National Energy Policy of the United Republic of Tanzania was
formulated in 1992. A new policy formulated in 2003 depicts the
structural changes that occurred over the last decade in the economy,
social and political transformations at national and international levels.

Policy Objectives






To ensure the availability of reliable and affordable energy supplies
and their use in a rational and sustainable manner in order to support
national development goals
Efficiency in energy production, procurement, transportation,
distribution and end-use systems in an environmentally sound and
sustainable manner.
On the other hand the National Energy Policy is aimed at meeting
national development goals of Economic Growth and Poverty
Reduction Strategies (MKUKUTA) and to fulfil the ruling party Election
Manifesto of 2005.

Policy Challenges







Increased supply and distribution: Generation of electricity is
expected to triple during the next twenty years in order to meet
the projected increase in demand
Regional interconnection: Regional and international integration
of power systems is essential for Tanzania and neighbouring
countries to reach the projected economic growth
Rural Electrification: Electricity needs to made available for
economic activities in rural areas
Reaching Rural households: Around 80% of the population has
low purchasing power and depends mainly on wood-fuel for
cooking and kerosene for lighting, which have negative
consequences to the environment and the quality of life,
especially the rural poor

TANESCO AFTER ECONOMIC
LIBERALIZATION







It is impossible to talk about the future of TANESCO without referring
to the ten years from 1997.
After 30 years as a public utility TANESCO was put in the market as
one of the utilities targeted for privatization, it was expected that offers
would rush at the opportunity
What followed: complete paralysis of all forms of expansion (Zero
capital expenditure), poor maintenance of structures, paralysis of all
forms of development of human resources schemes, decline of entry
of new clients and poor service delivery characterized by 24% loss of
power.
Management contract was entered with private firm during the
transformation period. In 2005 TANESCO was de-specified (pulled of
the list for sale)

Cont’d…TANESCO AFTER ECONOMIC
LIBERALIZATION






TANESCO not withstanding the fact that has been heavily and
continuously subsidized and providing power mostly by hydro sources
(Over 85%) which is significantly more economical than thermal, still
continuously registers annual operating losses
Over the past 5 years for example, TANESCO has continuously
registered losses, offering electricity at rates that are not reflective of
costs.
The Regulator (EWURA) has gradually been introducing charges but
anything higher will be excessive and inflationary.

CHALLENGES FACING ELECTRICITY SUB-SECTOR









Limited accessibility: It is estimated that only 10% of the population
have access to electricity
Low Investment: Investment in generation, transmission and
distribution of electricity infrastructure has not been adequate to match
the demand.
Dilapidated Electricity Infrastructure: Despite the fact that there is
limited investment in electricity infrastructure, also the infrastructure is
by and large dilapidated and in dire need of repair
Monopoly: TANESCO has up to now, been the only entity that is
allowed to engage in the commercial production, transmission and
distribution of electricity. The New Electricity Act has been prepared to
address the challenge by ushering in new investors in the sector as
Private Public Partnership (PPP)
Highly Hydropower Dependant: Hydro constitutes about 70% of the
total generation, there by posing threat during prolonged periods of
drought as in 2003-2006

Cont’d CHALLENGES





Electricity must be cost reflective. The alternative is that it becomes a
burden on the economy rather than a catalyst for development
Resources allocation and priorities determination is necessarily going
to depend on social economic arguments on the issue rather than
socio-political
The use of electricity must be perceived in the same vein as for
example water, as an agent for poverty eradication in rural areas and it
is something cost is incurred so it must be provided for cost-effecivelly

OPPORTUNITIES





Increased Demand: With increased Economic growth as a result of
economic liberalization, a demand for power is increasing too
Untapped Hydropower Potential: The potential is about 3181 as
opposed to 561 installed capacity. The untapped potential andl
capacity includes: Kakono (53 MW), Upper Kihansi (120MW), Mpanga
(144MW), Masigira (118 MW), Ruhudji (358 MW), Rumakali (222 MW),
Rusumo (62 MW), Songwe (340 MW) and Stigler's Gorge (1200MW)
Huge Potential : Despite hydropower potential, there huge potential in
Coal, Gas, Wind and Geothermal. Coal potential includes: Mchuchuma
(200 MW), Kiwira (100 MW) and Dar es Salaam (100 MW).
Geothermal potential is estimated at 650 MW

A NEW ERA: THE WAY FOWARD









The fiscal year 2007/08 has been eventful year in the Power sector in
Tanzania, because various events and issues have significantly
brought new changes to the sector, generally considered new dawn in
order to address the challenges and take advantage of opportunities:
The Revised Energy Policy: has been formulated to take into account
changes in social, political and economical landscape
New Electricity Act: The Energy bill has been presented to the
Parliament, once passed into law it will enable to implement the
energy policy
Improving Regulatory Framework: A regulator, Energy and Water
Regulatory Authority has been introduced
Rural Electrification: The Rural Energy Agency (REA) has been
introduced to speed up the process of rural electrification
Power Sector Reform Strategy: The new power sector reform strategy
has been introduced to stimulate growth in the sector

Cont’d.. WAY FOWARD






TANESCO together with the government developed a new Power
System Master Plan (PSMP) that will guide the next 25 years (Starting
2007) of its development and strengthen its planning capabilities.
The PSMP basic premise taken in energy needs assessment is that it
will provide an estimate of needs of the customers and not an estimate
of what can be supplied to the customer.
Expansion Planning:- Short term (5 years) the plan will be fixed i.e.
any new installations will have been committed. Medium term (6-15
years) the selection of the least cost will give clear indicators on the
prioritization of new projects. For the long term the plan can only
provide an overview of what resources may be candidates

CONCLUSION
Why am I at IndabaPower?
As a decision maker, public servant burdened with the task of making
very hard choices that unavoidably will make a few happy and many
more very unhappy, I come to learn from other experiences. I also
hope financiers and project developers have been listening, and
therefore have taken note of very attractive, juicy investment
opportunities in the power sector of Tanzania.

Because of the linkages between power and economic growth ,
expansion through investment of related sectors I also hope that other
investors have been listening as well.

Cont’d.. CONCLUSION
I welcome you all to Tanzania the land of Kilimanjaro, and the
Serengeti and Zanzibar, possibly the country with the richest potential
for power generation (After DRC) in the Sub-Saharan Africa.

I hope to welcome you to Tanzania in the near future and I thank you
for listening.

THE END

THANK YOU!