Tanzania (2014)

Degree of reliance on imported energy: 

Tanzania currently imports 10 MW and 3 MW of electricity from Uganda and Zambia respectively.  It is estimated that Tanzania annually imports over 1.8 million tonnes of various refined petroleum products for sale on the local market through port of Dar es Salaam. The continuous high oil prices are a heavy burden for the country.

In Tanzania all of the fossil liquid fuels are imported and 75% of these are used by the transport sector. Around 75% of demand for transport fuel is for diesel. The two railways operating in the country are diesel fuelled. Smaller household electricity generators (“gensets”) run on petrol and larger (from 10 kW and up) run on diesel.

Main sources of Energy: 

Biomass fuel accounts for more than 90% of the total energy consumption, with the remainder being mainly petroleum and hydroelectricity. This energy supply and end use structure reflects Tanzania’s low level of development.

In the rural areas this means burning natural wood (mostly scrub and prunings) for domestic use. Small rural industry uses larger quantities for processing agricultural products, and charcoal, which predominantly is sold and used in urban areas, is produced. Charcoal is the single largest source of household energy in urban areas and (roughly estimated, assuming primitive kilns) represents 20% of total energy use. The proportion of households in Dar es Salaam using charcoal has increased and is now above 70%. Approximately half of Tanzania’s annual consumption of charcoal takes place in Dar es Salaam, amounting to 500,000 tons for 2009 approximately.  The remaining share of energy sources are fossil fuels (6.6%), gas, (1.5%), hydro, (0.6%), and coal and peat, (0.2%). Coal is increasing, with new mines in operation. Consumption in 2010 was over 90,000 metric tons, and this figure is expected to rise substantially. The above regards inputs to the three major energy markets in the country; cooking fuels, (grid) electricity and transport fuels.

According to the TANESCO report of October, in 2011 a total of 766.8 MW has been generated from all electricity sources, which equated to 63.9% of 1,200 MW required for the country.



Extent of the network: 

Tanzania’s national electrification rate lies at just 14% – with less than 3% in rural areas.

Capacity concerns: 

Tanzania’s energy demand for heating, electricity, and transportation has been increasing with improved standards of living. To meet these growing demands, Tanzania has had to import a growing share of electricity from Zambia and Uganda. However, its domestic electricity supply is still vulnerable; delivery from these partners has been inconsistent – in part because they both also depend on hydropower – and the country continues to suffer from frequent power outages. Many grid-connected consumers only have 4 hours of electricity per day.

The reliability of electric grid power is low, with frequent brownouts and blackouts. Tanzania suffered drought-related power crises in the 1990’s and then in 2006, 2007, 2009 and 2011. In 2011, the national utility company TANESCO had to institute rolling blackouts of up to 12 hours, forcing about 50 factories to close down and lay off their employees.

Potential for Renewable Energy: 

The mean solar energy density is about 4.5kW per square metre per day, which indicates its potential use as an energy source. Some solar developers are seeking to set up large solar PV projects..

Wind Energy
Potential areas for wind areas have been mapped by TANESCO. There are several areas in the country, predominantly along the coast, with attractive wind speeds.

Hydroelectricity is the most important indigenous source of commercial energy, with a recognised potential of 4.7 GW of installed capacity and 3.2 GW of firm capacity. Only 15% of the potential installed capacity has been developed and several projects are currently soliciting funding.

Geographically, the hydro power potentials of Tanzania are located in the Rift Valley escarpments in the West, Southwest and Northeast regions of Tanzania. The planned large-scale hydropower generation sources include Ruhudji (360 MW), Rumakali (220 MW), and Stieglers Gorge (2,100 MW). The latter may have the potential to produce enough electricity to justify investments in extending the national grid, and has been under discussion for decades due to a number of environmental and social issues.

There is a high potential for geothermal power generation in Tanzania, with temperatures of up to 255 oC (dry steam). At least 15 thermal areas with hot spring activity could be justifiable development projects. The total potential geothermal power in 50 identified sites is 650 MW. The Songwe site in Mbeya region alone has an estimated potential of 100 MW of electricity. At issue is that some of the identified sites, such as Lake Natron, are in or near reserves such as Lake Manyara and Ngorongoro. Geothermal exploitation involves changing the flows of underground water, which in some cases have led to draining of nearby lakes. While the potential Tanzania is considerable, it should be kept in mind that estimates are more than an order of magnitude less than in neighbouring Kenya.

Potential for Energy Efficiency: 

Primary energy demand per capita was 0.45 ktoe in 2009. The residential sector contributes most to energy consumption in the country (72% in 2009), mainly due to the large amounts of biomass consumed for heating, light and cooking. Further development of the national electricity grid, leading to improved electricity services for households, would reduce this consumption greatly. Small-scale energy efficiency projects have been conducted in the country, for example aggregated purchasing schemes for energy-efficient electrical equipment, however, no governmental projects are currently under-way in the sector. Energy efficiency initiatives in the country are often hindered by limited capacity in strategic planning at Ministerial levels, a lack of awareness, a lack of financial resources for investing in efficient equipments, a shortage of technical capacity to disseminate the skills and adaptation of the technologies, and other issues.


TANESCO started to outsource some of its functions to private companies engaged in power trading in 1992. There was an increase in private power generating companies after the government allowed them to produce electricity from different sources, mainly petroleum and natural gas, and sell to TANESCO and other consumers. The private companies that generate electricity are Independent Power Tanzania Limited (IPTL), Symbion Company, and Agrreko Company. Some of these companies are owned by religious institutions, local industries, and Community Based Organizations (CBO’s).

Structure / extent of competition: 

Tanzania National Electric Supply Company (TANESCO) has the role of generating, transmitting, and distributing electricity to all parts of the country. TANESCO operates the grid system and isolated supply systems in Kagera, Kigoma, Rukwa, Ruvuma, Mtwara and Lindi.

Existence of an energy framework and programmes to promote sustainable energy: 

The 2003 National Energy Policy
The National Energy Policy was adopted in 2003 with the main objective of addressing national energy needs. Subsidiary objectives included developing domestic cost-effective energy resources; improving energy reliability, efficiency, and security; and reducing forest depletion. This sector policy statement is significant as it is the first sector policy to refer to climate change explicitly in its text. The energy policy put much emphasis on the promotion of efficient biomass conversion and end use technologies to enhance the conservation of woodlands. Through these objectives the policy is linked directly to climate change, as specified in one of the policy’s statements:
‘37. Promote efficient biomass conversion and end-use technologies in order to save resources; reduce the rate of deforestation and land degradation; and minimise threats of climate change.’

Tanzania has had a feed-in tariff scheme in place since 2008 for small power producers (100 kW to 10 MW). Above that size, the FIT is negotiable. Feed-in tariffs for small power producers are adjusted annually by the Energy and Water Utilities Regulatory Authority (EWURA) and are based on the avoided cost of the electricity. That means that they are undifferentiated by renewable energy technologies and that there is no guaranteed price over the long term even if a power purchase agreement (PPA) is signed for a 15-year period. Within the standardized FIT scheme there are tariffs for feeding into the main grid and into isolated mini-grids.

For balancing the higher generation costs in dry seasons, when the availability of hydropower is lower than in wet seasons and thermal power plants have to generate more expensive power, the standardized FIT is differentiated according to the season. In 2012, it averaged $0.093 per kilowatt hour, while the Standardized Small Power Purchase Tariff 2012 for mini-grids was at $0.294. The tariff is calculated on the basis of avoided and incremental costs in mini-grids.

Scaling up Renewable Energy Programme-Tanzania (SREP-Tanzania)
Tanzania is one of the pilot countries that were selected to prepare SREP Investment Plans in October 2012. The objective of the SREP-Tanzania Investment Plan is to catalyse the large-scale development of renewable energy to transform the country’s energy sector from one that is increasingly dependent on fossil fuels to one that is more balanced and diversified, with a greater share of renewable energy sources. The SREP-Tanzania IP was prepared by the Government of Tanzania, through a National Task Force led by the Ministry of Energy and Minerals (MEM) with support from the Multilateral Development Banks (MDBs).

Current energy debates or legislation: 

The government is currently reviewing the national energy policy of 2003 with a view to give prominence to biomass and bio-fuel as sources of energy for the population. This comes amid studies which show that over 90% of the population use biomass, particularly charcoal and firewood for cooking and heating. It has been argued by some stakeholders that the government needs to adopt an explicit policy to cover only biomass as opposed to the current energy policy. The envisaged policy would among others set guidelines for sustainability of biomass through modern technology to check environment degradation through reckless cutting of trees to produce charcoal.

Major energy studies: 

Tanzania is a member of the Rift Valley programme - Africa Rift Geothermal (ARGEO). Other member countries are Tanzania, Uganda, Kenya, Ethiopia, Djibouti and Rwanda. ARGEO gets funds from GEF/UNEP.

Role of government: 

Ministry of Energy and Minerals
The Ministry of Energy and Minerals frames its strategy and priorities for renewable energy development as part of the overall efforts to achieve economic growth and poverty reduction. It foresees a need for substantial improvements within the energy sector as a whole, both on the demand and supply sides.

Division of Environment within the Vice President’s Office (VPO-DoE)
The Division of Environment within the Vice President’s Office (VPO-DoE) is mandated to oversee and regulate environmental management across government departments and agencies. It prepares and issues environmental regulations and guidelines, in conformity with the National Environment Act (2004). This includes guidelines for undertaking Environmental Impact Assessments (EIAs) as well as broader environmental guidelines and safeguards. In addition, VPO is the Designated National Authority for the Clean Development Mechanism (CDM), the carbon emissions reduction tool for countries without emission reduction targets such as Tanzania.

Government agencies in sustainable energy: 

REA (Rural Energy Agency) was established in 2008 under the Ministry of Energy and Minerals to oversee the implementation of electrification projects in rural areas of Mainland Tanzania, using the Rural Energy Fund as provided in the Rural Energy Act, Cap 131. Both REA and the Rural Energy Fund (REF) are governed by the Rural Energy Board (REB), which is made up of 8 delegates from different government agencies and sectors of civil society. REA promotes rural electrification and power production. Most of the projects implemented with cooperation from MEM are renewable in nature such as the solar PV projects and projects planned on Pico and mini hydro and energy efficiency technologies.

Energy planning procedures: 

In an effort to increase access to electricity, the government is promoting Small Power Projects of up to 10 MW, through the introduction of a simplified implementation framework. The MEM, EWURA and the REA are developing the framework for renewable energy projects. The framework shall include a Standardised Power Purchase Agreement (SPPA), Standardised Power Tariff Methodology, and a Standardised Power Tariff (SPT).

Short and medium term projects have been identified in the Power System Master Plan 2007-2031 (PSMP) to replace the short-term emergency generation plants. A number of major projects have been proposed to develop the power sector of the country, and provide a solution to the current Southern African energy deficit. These include: the processing of a number of PPAs relating to interconnections with neighbouring countries and IPPs, the construction of new generation facilities (including 100 MW at Ubungo, 60MW at Nyakato – Mwanza, and 222 MW at the Rumakali Hydropower Project), the expansion of the high-voltage transmission network, and further studies into wind energy projects at Singida and Makambako.

In 2008, the Energy Development and Access Expansion Project, a US$111.5 million International Development Association credit and Global Environment Facility grant, was approved by the World Bank.  This project is primarily focused on the improvement of TANESCO's transmission and distribution grid.  The project also supports renewable energy options, namely, mini-hydropower generation, biomass co-generation, and solar energy. Mechanisms to encourage investment include a US$ 500 grant for each new rural connection using RE sources, and a Sustainable Solar Market Packages program, providing effective power solutions for a wide range of sectors.

Energy regulator Date of creation: 

The Energy and Water Utilities Regulatory Authority (EWURA) is an autonomous multi-sectoral regulatory authority established by the Energy and Water Utilities Regulatory Authority Act, Cap 414 of Tanzania regulations. It 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.

Degree of independence: 

The president appoints the chairperson of EWURA. The Minister of Energy has powers to give directions of a specific or general nature to the Authority. The five non-executive members are appointed by the Minister responsible for EWURA after consultation with the relevant sector Ministers. Appointment of members is made from a list of names proposed by the nomination committee, a committee established under section 9 of Cap 414. Funding for the Authority is provided by fees collected for the grant and renewal of licenses, and levies collected from regulated suppliers.

Regulatory framework for sustainable energy: 

The legal instruments for energy in Tanzania are the Electricity Act of 2008, Energy and Water Utilities Regulatory Authority Act of 2001, Petroleum Act of 2008, Gas Bill of 2009, and Rural Energy Agency Act of 2005.

Regulatory roles: 

The functions of EWURA in relation to electricity supply industry are stated under section 6 as follows:

  • Protect customer’s interest through the promotion of competition;
  • Promote access to and affordability of electricity services particularly in rural areas;
  • Promote least-cost investment and the security of supply for the benefit of customers;
  • Promote improvement in the operational and economic efficiency of the electricity supply industry and efficiency in the use of electricity;
  • Promote appropriate standards of quality, reliability and affordability of electricity supply;
  • Take into account the effect of the activities of the electricity supply industry on the environment;
  • Protect the public from dangers arising from the activities of the electricity supply industry; and
  • Promote the health and safety of persons in the working environment employed in the electricity supply industry.

Role of government department in energy regulation: 

MEM has responsibility for setting and reviewing policies and strategies as set out in the National Energy Policy and the National Energy Strategy through issuances and guidelines.  Previously, MEM had exerted regulatory authority over the power sector.  However, those powers were transferred to EWURA upon its establishment in 2005. The Ministry of Industry and Trade is also responsible for promoting sustainable operation and growth of the country’s industrial sector, and assumes a de facto regulatory role for the sector.

Regulatory barriers: 

  • Inadequate data and power planning tools to integrate renewable options;
  • Policy and regulatory framework for renewable energy incomplete;
  • Lack of incentive to develop mini-grid projects due to uncertainty of when the grid expansion reaches the project area.


TanzaniaAllafrica.com: Tanzania: Dar to Review National Energy Policy. Available at http://allafrica.com/stories/201309180920.html Accessed 18th February 2014.

Norton Rose Fulbright (2012): Scaling-up renewable energy in Africa: Tanzania Available at: http://www.nortonrosefulbright.com/knowledge/publications/59141/scaling-up-renewable-energy-in-africa-tanzania Accessed 18th February 2014

Nganga, Joseph et al. (2013): Powering Africa through Feed-in Tariffs Available at: http://ke.boell.org/sites/default/files/2013-03-powering-africa_through-feed-in-tariffs.pdf  Accessed 18th February 2014

Ishengoma, Edward (2013): Scaling up renewable energy programme in Tanzania Available at:http://webcache.googleusercontent.com/search?q=cache:KQPezDYAMfYJ:https://www.climateinvestmentfunds.org/cif/sites/climateinvestmentfunds.org/files/SREP%2520Tanzania%2520Investment%2520Plan%2520-%2520Presentation.pdf+&cd=5&hl=es-419&ct=clnk&gl=uk  Accessed 19th February 2014

Bauner, David et al. (2012): Sustainable Energy Markets in Tanzania. Available at: http://www.renetech.net/wp-content/uploads/2013/03/Sustainable_Energy_Markets_in_Tanzania_I_final_.pdf Accessed 19th February 2014

Kapinga, Severin (2013): A Study on Sustainable Electricity: The Use of Energy Mix in Modernizing Tanzania Available at: https://www.kdevelopedia.org/mnt/idas/asset/2014/01/02/DOC/PDF/04201401020129851075189.pdf Accessed 19th February 2014

Yanda, Pius et al. (2013): Tanzania National Climate Change Finance Analysis Available at: http://www.odi.org.uk/sites/odi.org.uk/files/odi-assets/publications-opinion-files/8627.pdf Accessed 19th February 2014

TANESCO website: Available at: http://www.tanesco.co.tz/index.php?option=com_content&view=article&id=75&Itemid=216  Accessed 19th February 2014

www.pvmagazine.com (2013): Special Report Africa: Tanzania, Mozambique Available at: http://www.pv-magazine.com/news/details/beitrag/special-report-africa--tanzania--mozambique_100013524/#axzz2tz5QmyeG Accessed 19th February 2014