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Petroleum, hydropower and coal are the major sources of commercial energy in the country. The biomass energy resource, which comprises fuel-wood and charcoal from both natural forest and plantations, accounts for 93 per cent of total energy consumption in the country.

The electricity subsector is largely dominated by a state owned enterprise, Tanzania Electric Supply Company Limited (TANESCO) which has a vertically integrated monopoly in the generation and supply of electricity in Tanzania. Power generation is largely hydro-based with three main stations: Mtera, Kidatu, and Kihansi linked together through the national grid.

Table 17: Potential Hydropower Sites

Potential Projects

Capacity GWh

Ruhudji (Middle Step)


Rumakali (Scheme B)


Stiegler’s George I*


Stiegler’s George II*


Stiegler’s George III*


* To be review under the East Africa Master Plan Study

With a current growth rate between 7 – 9 p.a, energy demand is expected to reach 4000 GWh with a peak demand of 700 MW by the year 2003. It is expected that the mining sector will contribute significantly to this demand growth. Electricity energy consumption represents about 1.2 percent of total energy consumption in which commercial and industrial users account for 33.3 percent of total electricity consumption.

By 1999 installed generating capacity on the connected transmission grid amounted to 637 MW including 60 MW from Kihansi hydropower station. Unconnected generating capacity amounted to 28.7 MW. Of the total installed capacity, 435 MW is supplied by hydro and the rest by thermal system.

Private Sector Participation

In order to increase power generation through attracting investment in the energy sector, the Government in 1992, changed its policy stand to allow private participation in generation. Following the policy change two independent power producers (IPPs) have been licensed, namely, Independent Power Tanzania Limited (IPTL) and Songas Limited. The Songo Songo project will utilise natural gas from Kilwa District, Lindi Region to generate 112 MW. The estimated completion date for the project is 2004.

Regulatory Mechanism

The electricity sub-sector is administered under the Electricity Ordinance Cap. 131 of 1957 and will be regulated by the Energy and Water Regulatory Authority (EWURA) whose bill of establishment was passed by the Parliament on April, 2001

Interconnection with Neighbouring Countries

The East African Power Master Plan is being developed under the auspices of the Secretariat of the East African Community. A study of the East African Power systems have been proposed by the three partner states.

A study on the Tanzania – Zambia interconnection recommended construction of a 670km of 330kV transmission line from Pensulo in Zambia to Mbeya in Tanzania and 330/220kV step down facilities.


  • Restructuring of Tanesco is expected to involve unbundling the company into generation, transmission and distribution entities before inviting private investors to participate, depending on the divestiture strategy adopted by the Government.
  • The private sector is invited to particitipate in developing power generating projects. The only private investors to take the opportunity so far are Independent Power Tanzania Limited (IPTL) and Songas Limited.
  • Tanzania has abundant untapped energy resources, some of which could be exploited for electricity generation. Coal reserves are estimated at about 1200mn tons of which 304mn tones are proven. Natural gas is estimated at 44.02bn cubic meters of proven reserves. Hydroelectric energy has a potential of installed capacity of 4.7 GW of which only about 10% is developed.
  • Solar, wind and geothermal sources, remain virtually untapped. Very little attempt has been made to utilize this source of energy, which could be a viable alternative source to reduce the use of wood and oil for heating purposes. These energy sources require low investment capital compared to hydroelectricity generation.
  • Tanzania has a per capital electricity consumption of 46/KWh per annum, which is growing at the rate of 11 - 13 per cent. Hence the government is encouraging investment to expand generating capacity, distribution system and developing indigenous sources of energy.
  • There are other indigenous alternative sources of energy such as coal. Tanzania has 1200m tons, which could provide energy for paper mills, cement factories, agriculture and household consumption, and generation of power.

Rural Energy Agency

The Government is in the process of establishing a Rural Energy Agency with the responsibilities of facilitating increased availability of energy services in rural areas, supporting R&D in rural areas, creating an institutional and legal framework to promote the application of renewable energy and to promote entrepreneurship and private involvement in the marketing of renewable energy in the rural sector.

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