14 February 2013

Tanzania: Mtwara to Have 400 Mw Power Plant

SOUTHERN regions will soon enjoy electricity in abundance as plans are underway to build a 400 MW power plant in Mtwara Region through public private partnership.

In Dar es Salaam, the Tanzania Electric Supply Company Ltd (Tanesco) and Symbion Power inked a memorandum of understanding to build the plant which will include a 650 km transmission backbone from Mtwara to Songea in Ruvuma Region.

The Tanesco Board of Directors Chairman, General (retired) Robert Mboma, said the power will be connected to the National Grid through a transmission line that will be built from Makambako in Njombe Region to Songea. He said that the project comes amid increased demand for power in Mtwara Region following commercial gas exploration.

"The cement factory which is due to be constructed in Mtwara will demand 30 MW while the fertilizer factory will demand 20 MW and Mtwara Airport is expected to demand six megawatts. The uranium mine in Namtumbo (Ruvuma Region) will demand 30 MW," he said.

Gen. Mboma added that there were also requests from the government of Mozambique. The neighbouring country has asked Tanzania to sell it power for the benefit of its northern regions. Malawi was also expected to ask for power from Tanzania.

"We are starting with 400 MW but we will continue to monitor the demand volume and we may have to shoot to 500 MW in the near future. We expect the power to go a long way in serving the whole country through the National Grid," he said. The Symbion Chief Executive Officer, Mr Paul Hinks, noted that the development will be implemented in phases and will take three years from financial closure to completion.

"The first phase will involve increasing the existing capacity in Mtwara which is set to start soon to meet the growing demand in the southern regions including Lindi and Mtwara. Engineering study work will commence in March," he said. He added that for the whole project in question it will take around 12 months to put the necessary financing in place before the three-year clock begins to tick. He added that the actual construction will start next year.

"This will be the cheapest electricity as it is sourced from gas and the transmission lines will be owned exclusively by Tanesco but they will be built as a part of the project," he said.

He declined to mention the actual cost of the project but noted that the two companies will be working with a number of international funding agencies, banks and private equity firms this year to put the financial package together.

He named the US Exim Bank and the US Overseas Private Investment Corporation as among potential agencies which have shown keen interest in the investment.

The Tanesco Acting Managing Director, Felchesmi Mramba, said that for many years the southern part of the country has been suffering from poor power reliability because it is not connected to the National Grid and that this was their turn to enjoy. "Connecting the Southern regions to the National Grid will significantly improve reliability of the entire network," he said.

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