Tanzania needs $1,5bn for power in next five years

Tanzania needs about $1,5-billion over the next five years to revamp its power sector, but the global financial crisis may make access to funds harder, a senior energy and minerals ministry official said on Saturday.

In a presentation made on his behalf, permanent secretary Arthur Mwakapugi said among the projects due by 2015 were two natural-gas powered plants, two hydro dams and a wind-powered project expected to add up to 1 178 megawatts (MW) to the grid.

But due to the world economic downturn, funding might be hard to come by as donors could cut back on direct financing of projects, said the presentation, given at a meeting to discuss the fallout from the global crisis.

Mwakapugi’s presentation showed that a 200 MW coal power plant worth $400-million that was due to start operation by 2011 had already been delayed.

The government also said on Friday a 300 MW natural gas-powered project in southern Tanzania worth $300-million was struggling to secure funds.

Prosper Victus, acting commissioner for energy, said there was a possibility some other projects could be delayed, but not all were linked to the financial crisis. He said that so far no project had been put on hold.

“Because of lack of adequate financing, some of the projects might be delayed. Exactly by how much is difficult to tell,” he told Reuters after making the presentation.

In late February, state-run Tanzania Electric Supply Company (Tanesco) said it needed to add 105 MW to its grid each year to meet rising demand, but faced delays in building the new plants necessary to hit the target.

Peak time demand in the East African nation of about 40-million people stands at about 787 MW versus 595 MW available on the grid.
The utility forecasts demand rising to 1 331 MW against 1 445 MW capacity by 2014.

Tanzania produces the bulk of its power from hydro dams, while it generates close to 300 MW from natural gas at another deposit on an island off its coast.

It suffered acute power cuts in 2006 after a drought slashed hydro-power production.

Mwakapugi’s presentation showed that among other projects the country plans to implement by 2015 are a power transmission line from Zambia through Tanzania into Kenya worth $770-million, and a 400 kilovolt line in Tanzania worth $690 million.

Others were the construction of an oil refinery and pipeline from Dar es Salaam to Mwanza in western Tanzania worth $2,9-billion and a $35-million natural gas distribution network. - Reuters

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