Tanzanian President Jakaya Kikwete has said his government is striving hard to reduce electricity tariffs to enable the majority of the East African nation’s population to access reliable energy for development.
Kikwete, currently on a week-long tour of the southern Ruvuma Region, made the remark at a public rally after inspecting rural development projects undertaken by different communities and private institutions.
The projects included small hydropower generation and irrigation schemes as well as road construction.
According to Energy and Minerals Minister Sospeter Muhongo, who is accompanying the President on the tour, a unit of electricity in Tanzania is currently sold at 16.8 US cents compared to 18 cents and 18.5 cents in neighbouring Kenya and Uganda respectively, while in Rwanda it costs 23 cents.
Tanzania Electric Supply Company (TANESCO), wholly owned by the government, is the country’s main power generator.
This month, the government embarked on a one-year Electricity Supply Reform Strategy aimed at creating a financially-sound power infrastructure through increased investment from both private and public sectors.
According to its outline, the strategy is aligned with Tanzania’s development vision of becoming a middle-income economy by 2025, with an annual per capita income of at least US$3,000.
By then, the population is projected at 69.5 million and would require electricity supply capacity of at least 10,000 MW.
About 24 percent of the nearly 45 million Mainland Tanzanian population, of which 7 per cent is in rural areas, is presently connected to electricity services, while the national demand for electricity grows between 10 percent and 15 percent per year.
Muhongo said ongoing efforts aim to raise power connection levels to 30 percent before the end of 2015 and 50 percent by 2025.
“The objective of the reform is to improve electricity supply industry governance and performance for sustainable socio-economic transformation and environment protection anchored on active participation of the private sector.
As of May 2014, Tanzania’s installed total power generation capacity was 1,583 MW composed of hydro 561 MW (35 percent), natural gas power plants of 527 MW (34 percent), and liquid fuel power plants of 495 MW (31 percent).
TANESCO also imports 10MW from Uganda, 5MW from Zambia and 1MW from Kenya.
According to the country’s power supply master plan of 2012, short-term financing requirements from 2012 to 2017 were put at US$11.4 billion, about US$1.9 billion per year, of which 73.5 percent was for power generation.
In order to improve the security of supply, the government has started diversifying the sources of electricity generation to include natural gas, coal, hydro, uranium and renewable energies.