The Tanzanian Government will need a short term financing of US$11bn for the Tanzania Power System Master Plan project.
The funds will be channeled towards the rehabilitation of the Electricity Industry Supply (EIS) over a period of 11 years, at a cost of US$1.15bn.The rehabilitation of EIS is aimed at meeting the demand of electricity in the country, which is on the rise due to industry growth and the need to realize the country’s vision 2020.
The funds for the Tanzania’s Power System Master Plan project will be used to pay US$412m debt incurred by the Tanzania Electric Supply Company (TENESCO), while the rest used for other expenses. With this Electricity Supply Industry Reform Strategy for the years 2014-2025, the government intends to increase the installed generation capacity to 10,000MW in 2025 up from the current 1,583MW. 4,000Mw will be attained from gas while 200MW from geothermal. This will be achieved through expanded transmission and distribution systems.
The major challenge that the government is going to face is the funding of the Tanzania Power System Master Plan project. This is because the main source of income for the government is tax, yet the mode of collecting the revenue is still wanting. The government hopes to bring on board the private sector to increase their fund base instead of relying too much on tax.
The ESI Reform Strategy and the Roadmap have been prepared by the government in consultation with various key stakeholders including the general public, academia, private sector, financial institutions and Development Partners.
