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Full meaning African Union Community of Sahel–Saharan States Common Market for Eastern and Southern Africa Economic Community of West African States Foreign direct investment Gross domestic product Inclining block tariff(s) International Monetary Fund Independent power producer Kilowatt Kilowatt hour Liquid petroleum gas Megawatt Pay as you go Power purchase agreement Private public partnership Standard and Poors Global Ratings Sub-Saharan Africa Transmission and distribution Time of use West African Economic and Monetary Union United Nations Industrial Development Organization Value added tax World Bank Regulatory Indicators for Sustainable Energy Projection for 2030 2017/2018 reporting year SSA average includes South Africa. Calculation for SSA average and country data: Total consumption (2016) / total population (2016). SSA average: 18% This includes diesel, kerosene and gasoline subsidies. Rates and tariffs were converted with the average exchange rate to the Euro in April 2020. Exchange rates available from ec.europa.eu Rates and tariffs were converted with the average exchange rate to the Euro in April 2020. Exchange rates available from ec.europa.eu Rates and tariffs were converted with the average exchange rate to the Euro in April 2020. Exchange rates available from ec.europa.eu

Energy Sector

Investment Overview
Tanzania’s peak electricity demand reached 1,046 MW in 2018. Despite having installed generating capacity of 1,461 MW in the same year, average operational capacity was only about 814 MW.

The national electrification rate of 37% means that around 7.2 million households do not have access to electricity. There is also a distinct disparity between settlement types, where urban electrification rates are four times higher than those in rural areas. Tariffs fall in the mid-range compared to other countries in the region after experiencing several increases in recent years.

Peak electricity demand in the country is expected to roughly quadruple by 2025 to 4,000 MW. To help meet this demand, Tanzania is targeting installed capacity of 10 GW by 2025. Meanwhile, the country is aiming to nearly double electrification rates to 75% by 2033.

Since the 1990’s Tanzania has endeavoured to reform its electricity sector to attract greater levels of private participation. Despite policy, regulatory and legal reforms, public-private partnership (PPP) project structures are generally still preferred over structures where IPPs have full ownership. The country does allow private participation in generation and distribution of electricity. Several IPPs and smaller projects are providing critical capacity, however suboptimal competitive conditions persist.

The industry continues to develop with several projects and companies reaching milestones. A local solar kit supplier in March 2020 passed the 1.5 million mark of people electrified. Construction of 11 solar minigrids are underway on a cluster of islands in Lake Victoria as part of the first phase of an ambitious 200 MW rural electrification project.

Structure

Despite efforts to unbundle the energy sector of Tanzania, relatively little progress has been made. Current experience seems to indicate a favouring of public funded projects over private and that future developments will be in the form of PPPs. Finally, while regulatory statutes encourage a competitive approach, such arrangements are seldom the norm in doing business with the private sector.

The industry can be defined as a hybrid electricity market. The national utility continues to dominate generation, while IPPs of varying sizes provide additional capacity. Several prospective IPP developers have encountered headwinds despite having memoranda of understanding with the ministry. A reported lack of capacity within the ministry to assess and support these projects has resulted in many not materialising.

Distribution is also set for privatisation alongside generation, with generation companies preparing for listing and privatisation by 2024. Grid level transmission is only permitted by the national utility, while small power projects are allowed to generate and transmit energy within the confines of project boundaries.
Generation:

The Tanzania Electric Supply Company (TANESCO) covered 78% of generation in 2019, followed by Independent Power Producers (Songas) with 20%, small power producers (>10 MW) with 0.8%. Imports accounted for 1.6%.

Transmission:

TANESCO is the sole transmission grid operator in Tanzania. By 2018, it operated 77,700 km of transmission lines ranging from 66 kV to 400 kV.

Distribution:

TANESCO is the sole distribution grid operator in Tanzania. Its distribution lines covered 30,171 km by 2018. In addition to the interconnected distribution grid, it operates isolated grids in Kagera, Kigoma, Rukwa, Ruvuma, Mtwara and Lindi.
The Tanzania National Electric Supply Company (TANESCO) is the national state-owned utility with the role of generating, transmitting, and distributing electricity to all parts of the country. It also sells electricity to the Zanzibar Electricity Corporation.

The Rural Energy Agency (REA) is an autonomous body under the Ministry of Energy and Minerals and was established in 2008 to oversee the implementation of electrification projects in rural areas of mainland Tanzania, using the Rural Energy Fund (REF). Both REA and REF are governed by the Rural Energy Board (REB). The agency actively works with the private sector.
The Ministry of Energy and Minerals is responsible for policymaking and overall coordination in the energy sector.
The Energy and Water Utilities Regulatory Authority (EWURA) is responsible for technical and economic regulation of the electricity, petroleum, natural gas and water sectors in Tanzania. EWURA regulates tariffs for all electricity trade in the country.
The Tanzania Investment Centre (TIC) was established in 1997 by the Tanzania Investment Act to be the primary agency of the Government to coordinate, encourage, promote and facilitate investment in Tanzania and to advise the Government on investment policy and related matters. The agency deals with all enterprises whose minimum capital investment is not less than US $500,000 if foreign owned or US $100,000 if locally owned. The agency assists all investors to obtain permits, authorisation and any other documents required by law to set up and operate investments in Tanzania.

The Tanzania Renewable Energy Association (TAREA) focuses on promoting the use of renewable energy in the country.

IPPs are defined in Tanzania as private operators of energy plants larger than 10 MW on the basis of a PPA.

Small power producers (SPPs) are defined as private operators of energy plants between 100 kW and 10 MW. These are managed under the SPP Framework of 2019, as per the Electricity (Development of Small Projects) Rules of 2019.

Very small power producers (VSPPs) are operators of plants with installed capacities of less than 15 kW at a single site selling power to at least thirty retail customers or between 15 kW and 100 kW at a single site that either sells wholesale power to the distribution grid or directly to a customer. These are managed under the SPP Framework of 2019, as per the Electricity Rules (Development of Small Projects) of 2019.

Key Actors

Gridfinder Map
Transmission (OSM)
Distribution (predicted)
Electrification targets
Utility/distributor
The Tanzania National Electric Supply Company (TANESCO) is the national state-owned utility with the role of generating, transmitting, and distributing electricity to all parts of the country. It also sells electricity to the Zanzibar Electricity Corporation.

The Rural Energy Agency (REA) is an autonomous body under the Ministry of Energy and Minerals and was established in 2008 to oversee the implementation of electrification projects in rural areas of mainland Tanzania, using the Rural Energy Fund (REF). Both REA and REF are governed by the Rural Energy Board (REB). The agency actively works with the private sector.
Ministry (Ministries)
The Ministry of Energy and Minerals is responsible for policymaking and overall coordination in the energy sector.
Regulator
The Energy and Water Utilities Regulatory Authority (EWURA) is responsible for technical and economic regulation of the electricity, petroleum, natural gas and water sectors in Tanzania. EWURA regulates tariffs for all electricity trade in the country.
Others
The Tanzania Investment Centre (TIC) was established in 1997 by the Tanzania Investment Act to be the primary agency of the Government to coordinate, encourage, promote and facilitate investment in Tanzania and to advise the Government on investment policy and related matters. The agency deals with all enterprises whose minimum capital investment is not less than US $500,000 if foreign owned or US $100,000 if locally owned. The agency assists all investors to obtain permits, authorisation and any other documents required by law to set up and operate investments in Tanzania.

The Tanzania Renewable Energy Association (TAREA) focuses on promoting the use of renewable energy in the country.

IPPs are defined in Tanzania as private operators of energy plants larger than 10 MW on the basis of a PPA.

Small power producers (SPPs) are defined as private operators of energy plants between 100 kW and 10 MW. These are managed under the SPP Framework of 2019, as per the Electricity (Development of Small Projects) Rules of 2019.

Very small power producers (VSPPs) are operators of plants with installed capacities of less than 15 kW at a single site selling power to at least thirty retail customers or between 15 kW and 100 kW at a single site that either sells wholesale power to the distribution grid or directly to a customer. These are managed under the SPP Framework of 2019, as per the Electricity Rules (Development of Small Projects) of 2019.

Tariffs

Tariff components
Low voltage
Consumption Charge (€/ kWh):
€0.09
Service Charge (€/month):
General LV (400V): €5.69
Demand Charge (€/kVA/month):
General LV (400V): €6.00
VAT (%):
18%
Medium voltage
Consumption Charge (€/ kWh):
€0.06
Service Charge (€/month):
All MV customers: €6.71
Demand Charge (€/kVA/month):
All MV customers: €5.28
VAT (%):
18%
High voltage
Consumption Charge (€/ kWh):
€0.06
Demand Charge (€/kVA/month):
All HV customers: €6.62
VAT (%):
18%
Average retail tariff by consumption category
Low voltage (€c/ kWh)
Average LV
9.4
Residential (average of IBTs)
9
General LV (average voltage categories)
9.7
Medium voltage (€c/ kWh)
Average MV
6.3
All MV Customers
6.3
High voltage (€c/ kWh)
Average HV
6.1
All HV Customers
6.1
Is the retail electricity tariff subject to periodic review?
No
Electricity tariffs are automatically adjusted for inflation every six months. licencees may apply to the Energy and Water Utilities Regulatory Authority (EWURA) for tariff review, or EWURA may initiate an inquiry to review a tariff an any licencee.

Quality standards

The Tanzanian Bureau of Standards (TBS) is the national standards body in Tanzania. It enforces quality standards for solar products and carries out testing, verification and registrations. SPPs are also required to meet relevant TBS standards. TBS applies the Lighting Global Standard for small renewable energy and hybrid systems for rural electrification. The basic standards (TZS 1951-9-5 and TZS 1952) involve all solar power and related products manufactured inside the country or imported.

Explore the data

Electrification rates
% National electrification rate
2018
% Rural electrification rate
2018
% Urban electrification rate
2018
Total installed capacity (MW)
2030
10,000
2018
1,461.29
Peak demand (MW)
2025
4000
2018
1046
Electricity consumption by sector (MWh), 2017
Commercial & Public Services
1209.52
Residential
2895.87
Industrial
1523.53
Per capita electricity consumption (kWh/person)
2016
107.1
SSA average (2016)
365.6
Solar PV resource potential (output range, kWh/ kWp)
3.7 - 5.0
Wind resource potential (Wind speed range, metre per second)
2.5 - 9.5
Resource Potential (small hydro) MW
385.5
Electricity mix by source (% of installed capacity), 2018
Small Hydro (1.32 %)
Biomass (0.75 %)
Other (97.93 %)
Diesel price per litre (EUR)
T&D technical losses (% of generation)
2018
17.00%
Electricity and petroleum product subsidies (% of GDP)
Electricity subsidies, 2017
2.47%
€1,127,769,600.00
Petroleum product subsidies, 2017
1.33%
€625,559,700.00
Methodologies
Get to know how this Country Brief was developed
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Contact
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