Symbion Power seeks $561m from Tanzania in power supply row

Symbion Power seeks $561m from Tanzania in power supply row

Symbion Power is seeking $561-million from Tanzania’s state power supplier Tanesco through international arbitration, reproving it of breach of contract, the US firm.

Symbion owns a 120 MW thermal power plant in Tanzania’s commercial capital Dar es Salaam and is one the few independent producers that vend power to State-owned utility Tanzania Electric Supply (Tanesco).
Tanzania has reserves of more than 57-trillion cubic feet (tcf) of natural gas but faces unceasing power deficit owing its dependence on hydropower dams in a drought-prone area, forcing its utility to buy from the private firms.

Symbion’s spokesperson Julie Foster said it sued Tanesco at the International Chamber of Commerce’s International Court of Arbitration in Paris on March 13, saying it has not honored a 15-year contract.

“The power purchase agreement is now terminated and the sum claimed is $561-million. Since the case is a very straightforward case to arbitrate, we trust that it will not take too long for the mediation to come to an end,” Foster said.

Foster said Symbion filed for mediation because it ran out of alternatives “after trying to resolve the disagreement … in a friendly manner for over a whole year.”
Tanesco refused to comment, saying the matter was under court proceedings.

Tanzanian President John Magufuli, nicknamed “the Bulldozer” for his infrastructure projects and stern leadership style, launched his reform drive after he was elected in 2015, vowing to change an economy shambled by bureaucracy and bribery.

But some foreign investors have said they could level back their operations or development plans because of harsher demands, including elevated tax bills, as part of the president’s drive to revamp the economy.

“The worry however is that such quick-fix thinking, and resulting polices, only strengthen a growing investor opinion that Magufuli’s government is anti-business,” Ahmed Salim, VP of consultancy Teneo Intelligence, said in a note to patrons .