September 18th, 2007
Minister of Trade, Industry and Marketing, Hon. Basil Mramba, today made what he termed as “the first official public announcement” that the Tanzanian Government will now allow private energy companies to distibute power in the country.
Speaking at the 2nd annual Tanzania Investment Forum in New York, Minister Mramba said that the move will effectively end TANESCO’s long held monopoly in power distribution. “From now on, any qualified company will be able to apply for licence to generate and sell electricity to the market”. Minister Mramba added that what remains is the official passage of the law which is currenty being prepared. The added that the amendment is expected to be tabled in the Bunge sometime this year in November at the earliest or by April of 2008.
Since early 1990’s, private power companies in the country have been generating their own electricity using gas and diesel fired turbines but were required by law to sell only to TANESCO, the Government owned power utility company. In recent years, few exemptions where given to mining and gas companies to generate and distribute power for their own use to support local operations. Today’s announcement, however, will open the field to more players from inside and outside the country to add power to the National grid and supplement TANESCO’s role of distributing electricity to urban and rural consumers. In recent years, due to various reasons such as economic and population growth as well as structural problems, TANESCO had been unable to cope with the rising demand for electricity in the market. For this reason, the liberalization of power distribution had been lobbied for a long time by the businesses and consumers alike as one of the panaceas to the power crisis in the country.
In other major news today, the board of directors of Millenium Challenge Corporation have approved a $698 million Millennium Challenge Compact to Tanzania to reduce poverty, stimulate economic growth, and increase household incomes through targeted infrastructure investments in transport, energy, and water.