Tanzania Daily News (Dar es Salaam)

27 February 2013

Tanzania: Tanesco and Symbion Sign Promising Pact

Photo: Chris Kirchhoff
Electricity pylons.

IN a move that brings hope for better days, the Tanzania Electric Supply Company Ltd (Tanesco) and Symbion Power recently inked a memorandum of understanding to build a 400mw plant in Mtwara, which will include a 650km transmission backbone from Mtwara to Songea in Ruvuma Region. Southern regions have for many years lagged behind other regions in electricity connectivity.

The Regions which include Mtwara, Lindi and Ruvuma have longed to get connected to the national grid. The plan therefore reassures them more. The southern regions have languished in this misery despite the abundance of the local indigenous energy resources.

However, the resources, including wood for fuel, other biomass fuels, hydropower, natural gas, coal, uranium, wind, geothermal and solar, are yet to be fully exploited. To date, Tanzania's energy supply depends mainly on biomass used by about 80 to 85 per cent of the population, which do not have electric power.

The overwhelming majority of households use wood and charcoal for cooking. The move to develop the southern regions' electric potential is not only going to connect the residents, but it is expected to increase connectivity and play a significant role in the government's target of ensuring that the country will move into the middle income status by 2025 and ensure that 30 per cent of Tanzanians have access to electricity by 2015.

Data have it that the national electricity connectivity is about 14 per cent now though, it is expected that electricity demand will triple by 2020. Inking the MoU in Dar es Salaam recently, the Tanesco Board of Directors Chairman, General (retired) Robert Mboma, said the 400mw power will be connected to the Tanesco national grid through a line that will be built from Makambako in Njombe Region to Songea.

He said the project comes amid increased demand of power in Mtwara Region following commercial gas exploration. "The cement factory which is due to be constructed in Mtwara will demand 30mw while the fertilizer factory will demand 20mw and the Mtwara Airport is expected to demand 6mw.

Uranium mine in Namtumbo (Ruvuma Region) will demand 30mw," he said. Gen Mboma added that there were also requests from the government of Mozambique asking Tanzania to sell power to the country's northern regions and that Malawi was also expected to demand power from Tanzania.

"We are starting with 400mw but we will continue to monitor demand and we may have to shoot to 500mw 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 phased 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, adding 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. 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 for many years Southern part of the country has been suffering from poor power reliability due to the region not being 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. This is one of the ways Tanesco can benefit from PPP (public private partnership) arrangement whereby the Public and Private sector join forces to undertake projects that would otherwise be difficult to implement," he said.

Tanesco and Symbion have been in discussions since Symbion presented a proposal to Tanesco and the Ministry of Energy and Minerals in September 2012. In November, last year the Minister of Energy and Minerals, Prof Sospeter Muhongo, said only 6.6 per cent of the rural Tanzanians are connected to the power grid out of the total 18 per cent population that have access to electricity.

Prof. Muhongo said there can be no reduction of poverty if the majority of the citizens lacked access to energy, saying cheap, availability and accessibility to energy would make the country competitive in the region and move its economy forward. He said the country's vision 2025 clearly stipulated to reach the status of a middle income in 2025 and that to achieve the target the country must be driven by cheap and reliable energy.

"For the vision to be realized there is a need for the country to record a growth of 10 per cent for a period of 10 to 15 years and this can only be realized with cheap and reliable energy which is accessible to the majority of Tanzanian population," he said.

He underscored that the government has reduced the electric connection fee charges by 70 to 50 per cent in order to allow more citizens be connected to the national grid while at the same time encouraging Rural Energy Authority (REA) to make sure that the majority of the rural population are connected with renewable energy. Muhongo said the government was looking at the sources of energy and that at present the country is moving away from the unreliable hydro energy to gas whereby 65 per cent of the total energy production in the country is from gas.

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