Tanzania to Spend $1.9 Billion on Electricity Network Upgrade

(Bloomberg) -- Tanzania will spend $1.9 billion to upgrade its power transmission and distribution network as part of plans to end electricity outages.

The project will “upgrade power sub-stations and transmission lines across the country to stabilize power supply,” Energy Ministry January Makamba said in a presentation to parliament. He did not disclose how the government will finance the project.

The gas-rich East African nation is struggling with erratic power supply, which Makamba attributed to a legacy failure to invest at least 10% of the utility’s annual revenues in repair and maintenance.

He said state-run Tanzania Electric Supply Co. posted annual revenues of 1.8 trillion shillings ($778 million) last year, almost 6% more than the previous year. Only a tiny fraction of the income was spent on repair and maintenance of the grid, he said.

More than half of Tanzania’s current output of around 1,600 megawatts is from gas-fired power plants. The nation is also developing a $3 billion hydropower station for 2,115 megawatts that could transform it into an electricity exporter to neighboring countries. 

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