Power Africa in Tanzania

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Power Africa has supported the development of 671 megawatts (MW) of electricity generation projects in Tanzania. In addition, various firms have received U.S. Embassy support to move transactions forward. The page below gives an overview of the energy sector in Tanzania, explains Power Africa's involvement and lists Power Africa’s financially closed transactions in the country, some of which are already online and generating critical electricity supply for the people of Tanzania.

People at a well lit nighttime market
A nighttime market is lit by solar power in Msimba village, Kigoma Region, Western Tanzania. The Millennium Challenge Corporation's solar energy programs have brought electricity to markets and dispensaries in Msimba and dozens of other markets, schools, hospitals, and dispensaries across the region.
Jake Lyell for Millennium Challenge Corporation

TANZANIA ENERGY SECTOR OVERVIEW


Population: 58 million | GDP (1): $63.18 billion

Tanzania is the sixth-most populous country in sub-Saharan Africa; it connects six land-locked countries to the Indian Ocean; and, with the announcement of natural gas reserves, plus abundant and world-class wind and solar resources, hosts many natural resources. The Government of Tanzania (GOT) has committed to reform the operations of TANESCO (the national utility) and meet new demand through low-cost solutions. Historically, Tanzania relied on hydro power generation, which due to climate change were unreliable and forced the sector to occasionally deploy expensive thermal and emergency generation sources. In recent years, major generation sources have been natural gas and all emergency power plants have been decommissioned. Tanzania is currently carrying out renewable energy power auctions which is expected to add up to 350 MW of wind and solar power. Currently, Tanzania is also constructing a large and ambitious 2,115 MW hydropower plant expected to be operational by 2024. There are several rural electrification projects going on in the Country in areas which have never seen electricity and are served by solar home systems or micro grids. Issues with cost-reflective tariffs and off-taker creditworthiness persist.

GENERATION CAPACITY

  • Installed Capacity (2): 1,764 MW
    • Hydro: 581 MW
    • Gas: 876 MW
    • Wind: 2 MW
    • Solar: 2 MW
    • Biomass: 63 MW
    • Other/Thermal: 240 MW

Power Africa New MW to date at financial close: 671 MW

CONNECTIONS

  • Current Access Rate (3): 37%
    • Urban: 73%
    • Rural: 18%

Power Africa new connections: 2,388,031

 

POWER AFRICA SUCCESS STORIES IN TANZANIA


Cultivating Change: Increasing Women’s Access to Off-Grid Productive Use of Energy for Agriculture

What do gender equality and off-grid energy have to do with each other? For suppliers of agricultural productive uses of energy (PUE) in sub-Saharan Africa, understanding how women’s roles in farming differ from men’s can extend market reach, reveal which technologies reduce women’s labor burden, and highlight the products that benefit women most.

Simusolar, Inc. supplies renewable energy–powered PUE technology to farmers in Tanzania and Uganda. Power Africa helped them to understand their market better and to develop a gender strategy to increase the share of female farmers benefiting from PUE.

Learn from Simusolar and access their gender strategy in our latest blog. You can also DOWNLOAD Power Africa's roadmap for developing your own market-focused gender strategy.


Power Africa Supports Tanzania-based Solar Company to Fuel Livelihoods of Rural Farmers and Fishers

Simusolar was one of the first solar companies to center its business model on productive use of electricity. As the off-grid energy industry continues to evolve, companies require up-to-date information on how the market will be impacted by new laws and regulations, and where opportunities exist to access public and private financing for continued growth. Power Africa is supporting Simusolar in these areas to help the company continue to grow and positively impact lives.

One of the key ways in which Power Africa has helped Simusolar is by enabling the company to gain access to financial resources. It has assisted the company in developing and refining its investor-facing materials, such as its pitch deck, and honing its equity story. Because of this support, Simusolar has been able to focus its efforts on investors that align with the company’s mission.

Power Africa has also provided the company with support to develop a gender strategy and showcase its commitment to equity to gender lens investors.

READ MORE about our support to Simusolar on our blog

 

POWER AFRICA FINANCIALLY CLOSED TRANSACTIONS IN TANZANIA


Updated: May 02, 2019

Kigoma Solar Power (Solar 5MW)

Financial Close Date: 09/30/2016
Commercial Operations Date: 05/15/2017
Estimated Project Cost: $13M
Overview: This is a 5 MW solar power plant in Kigoma, Tanzania with support from USTDA and OPIC. The facility will deliver power to an isolated grid administered by TANESCO that serves millions of Tanzanians in western Tanzania. Power Africa supported US Company NextGen Solar on this project by providing USAID technical assistance to the Tanzanian Energy and Water Utilities Regulatory Authority (EWURA) on renewable energy feed-in-tariff (REFIT) procurement and by facilitating an agreement by Tanzania’s Rural Energy Agency (REA) to issue a commitment letter to cover the cost of the transmission line.  Construction is complete, but the plant is not yet energized due to a dispute with the offtaker.


Kilombero Hydro & Biomass Plants (Biomass - .86MW)

Financial Close Date: 05/04/2017
Commercial Operations Date: 06/30/2018
Estimated Project Cost: $4 million
Overview: This project entails the expansion of existing rice and maize production at Mngeta Farm in the Kilombero Valley of southern Tanzania primarily through the installation of overhead center-pivot irrigation systems, the purchase of additional field and processing equipment as well as upgrades to a mini-hydro plant and the construction of a new rice-husk gasification unit. Power Africa supported US Company Pacific Sequoia Holdings from Delaware on the project through Overseas Private Investment Corporation financing. The project was complemented by funding from Norfund, a Power Africa partner.


Kinyerezi I (Natural Gas – 150MW)

Financial Close Date: 12/03/2013
Commercial Operations Date: 04/04/2016
Estimated Project Cost: $183M
Overview: The Kinyerezi I project is a 150 MW gas-fired power plant as well as a 220/132kV substation and 220/132kV transmission lines to connect the new power plant to the existing transmission network. In developing this project, USAID advised the Government of Tanzania on the project. Jacobsen Elektro Company (Norway) constructed the plant and transmission network and used turbines manufactured by Power Africa partner General Electric (United States). The power plant was delivered to the Tanzanian utility company, TANESCO, which then took the plant into commercial operation. This project reached financial close in December 2013 and was commissioned in April 2016.


Kinyerezi I Expansion (Natural Gas – 186MW)

Financial Close Date: 02/29/2016
Commercial Operations Date: 12/29/2017
Estimated Project Cost: $185M
Overview: Power Africa advanced the 186 MW Kinyerezi I Expansion transaction to financial close in 2016 through the provision of USAID Transaction Advisory Services as well as support from the Department of Commerce. Turbines used at the plant were manufactured by US Company General Electric.


Kinyerezi II (Natural Gas – 240MW)

Financial Close Date: 02/29/2016
Commercial Operations Date: 12/29/2017
Estimated Project Cost: $240M
Overview: The 240 MW combined cycle gas technology plant (CCGT) is made up of 6 turbines and is part of a four plant complex. The plant uses gas and steam to generate electricity with a potential to produce 167.82 MW from natural gas and 80.4 MW from steam. The plant was inaugurated in a ceremony by President Magufuli in April 2018. Power Africa advisors performed a detailed technical review of the project feasibility study and provided support to State utility TANESCO during procurement.


Luponde Hydro Power and Rural Electrification Project (Hydro – 2.9MW)

Financial Close Date: 04/03/2018
Commercial Operations Date: 4/2019
Estimated Project Cost: $5.9M
Overview: The Luponde Hydropower project developed two adjacent hydro sites, linked together to feed a common point of interconnection with Tanzania's public utility company (TANESCO). Power Africa provided advisory assistance through all stages of development on this project, which is part of the Rural Energy Agency’s (REA) Mini and micro-grid Results Based Financing (RBF) Program. This project received a $840,000 grant application from REA's Mini and micro-grid Results Based Finance program funded by Swedish International Development Agency and the United Kingdom’s Department for International Development. The project will be located in Njombe district in Njombe Region in Southern Highlands Zone. The project will connect nine villages; five villages are in Luponde Ward and four are in Lungilo Ward. It is expected to result in 1,400 direct connections, and reduce GHG emissions by 6,183,409 tonnes per year.


Tulila (Hydro – 7.5MW)

Financial Close Date: 12/15/2014
Commercial Operations Date: 02/29/2016
Estimated Project Cost: $24M
Overview: Tulila is a run-of-river hydroelectric plant with an earth-fill dam and a weir system to divert water to the plant and increase the naturally available head. Power Africa supported the Tanzanian Rural Energy Agency (REA) by helping draft support letters and clearing one of the final hurdles to reaching financial close. Total financing of $28.3 million for this project was provided by AF-Iteco, via a combination of a bank loans, subordinated loans, equity, and a $1.5 million Green Performance Grant, approved by Tanzania’s REA. This project is expected to result in a GHG reduction of 10,661 tons per year. Run-of-river plants provide significantly fewer environmental and social issues when compared to traditional dam projects.  


Related Links


Sources

  1. https://data.worldbank.org/country/tanzania 
  2. https://www.africa-energy.com/database/datatool
  3. https://www.iea.org/reports/sdg7-data-and-projections/access-to-electricity

Last updated: March 09, 2022

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