Tanzania

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.

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.

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.