Tanzania Daily News (Dar es Salaam)

18 September 2012

Tanzania: Let's Go for Fair for All Gas Deals

ELECTRICITY supply in the country is expected to go up significantly in the next few years following recent massive discoveries of natural gas fields and commencement of coal production projects.

Industry experts say that the country's demand for energy is expected to grow 1,583 megawatts by 2015 from the current demand of around 800MW due to the ongoing industrialisation and change of lifestyle. However, the experts say, within the next few years more than 3,000MW electricity is likely to be generated in Tanzania from natural gas, coal and hydro. Generation from coal alone can contribute a third of that projection.

Production of coal has started at Ngaka in Mbinga District, Ruvuma Region, where the mine will initially be producing about 30 tonnes of coal per month, but at full capacity the output is projected to reach five million tonnes annually. The amount is well beyond the country's annual demand.

Coal from Ngaka, according to investors, will be used in generation of 240MW of electricity by the year 2015. This will be a big boost to power supply in the country. Sources in the ministry of energy and minerals say that the lifespan of Ngaka Coal Mine is about 50 years.

Leaving coal from Ngaka apart, Tanzania's energy industry is set to gain significantly from other coal fields. There is 800MW from the Mchuchuma and Kiwira coal mines in Njombe and Mbeya regions, respectively. In June, last year, the government announced that China would invest 400 million US dollars (abot 630bn/-) in the Kiwira coal mine project estimated to generate 200MW of electricity.

The money, according to officials with the ministry, is expected to come under soft-loan arrangement. In September, last year, China's Sichuan Hongda Company Limited, signed a 3 billion US dollars (about 4.7tri/-) deal with the National Development Corporation (NDC) to mine coal and iron ore in Tanzania.

The investment involves construction of the Mchuchuma Coal Mine and an accompanying 600-megawatt (MW) thermal power station. It is estimated that Mchuchuma coal deposits have more than 480 million tonnes of coal reserves.

However, as the Minister for Energy and Minerals, Professor Sospeter Muhongo, rightly pointed out at the weekend that relevant authorities must act vigilantly to ensure Tanzania is not short-changed in all contract involving power supply. It is hoped that in all transactions, the win-win scenario will be achieved.

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