Tuesday, November 18, 2014

Tanzania government welcomes private sector investment in energy sector

The government has called on private sector investment in renewable energy in order to supplement the insufficient amount of megawatts of energy supply required annually to cater for the domestic and industrial use in the country, the Minister for Energy and Minerals Professor Sospeter Muhongo has said. Prof. Muhongo made the announcement in his speech when addressing foreign delegates after he had just opened the second powering Africa Tanzania conference in Dar es Salaam on Thursday this week. Powering Africa is an initiative of the Millennium Challenge Cooperation (MCC) formed by the US President Barrack Obama with a view to help energy infrastructural facilities in African countries Tanzania included. The conference which was attended by 170 investors on renewable sector from America, Europe and Asia is the second to take place in Tanzania after the first one which was held in January this year. In his speech to the conference delegates, Prof. Muhongo said that the government wants to concentrate on Solar Energy as a form of investments on renewable energy. He noted that, the government is welcoming more investors for the sake of developing the energy sector so that its targets of enabling 75 percent of Tanzanians access electricity by 2025 is achieved. He said since Tanzania is striving hard to save poverty stricken situation among its citizens, one way to make the initiative more successful is by having a reliable and enough power energy supply that would enable cater for the individual economic gain. He assured the delegates that, someone has to come with over 1,000 megawatts in order to reach the targets required by the government of between 10,000 to 15,000 megawatts of energy to be produced annually, and in view of this the government has embarked on a program to increase private sector participation in a move to improve the energy sector. According to him, the current level in the energy sector which stands at $ 4 m (6.4 trillion) needs more spectrum of investments to attain the targets of increasing access to electricity by Tanzanians from the current 36 percent to 75 percent in 2025 when the country will attain middle income status. 

Minister for Energy and Minerals Professor Sospeter  Muhongo

However, Prof. Muhongo thanked the current energy sector development initiatives since 2005 whereby only 10 percent of Tanzanians had an access to electricity energy power a move he termed as progressive that it has surpassed the target as compared to the electricity users today that covers 36 percent of the population. “We must open private sector investment on energy sector in order to be self sufficient with energy supply as there is no way to achieve development targets if there is no potential investors to help supply the needed energy”, he said adding that, the government does not have enough money to set in its national budget to accomplish such an investment task. Among the investment opportunities, he noted that, Tanzania needs a maximum of $ 700 million (Sh. 1.2 bn/-)  to construct a transmission services  from Dar es Salaam to various destinations in the country, and in order to achieve the required target, the government would borrow money and involve the private sector in this issue. Prof. Muhongo used the opportunity and informed delegates of the conference that Africa is tired of untrustworthy investors who are not sure of their duties once allowed to engage in energy production business, a factor he noted to be undermining  their national economies. Either Prof. Muhongo has hailed efforts currently being undertaken by his ministry in collaboration with Tanzania Electricity Supply Company (TANESCO) to spearhead rural electrification through Rural Electrification Programme (REP), the programme which ends in June 2015 he said has enabled rural areas to have electricity supply.

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