Power deal tainted by graft

This case study examines a 1995 power purchasing agreement between Tanzania's Tanesco and Independent Power Tanzania Limited (IPTL). The deal is presented as a failed Public-Private Partnership characterized by alleged corruption, excessive costs, and a lack of feasibility studies, resulting in the state paying for unnecessary generating capacity while facing a deficit in grid infrastructure.

• In 1995, Tanesco entered a 20-year agreement with Independent Power Tanzania Limited (IPTL), a joint venture of a Malaysian company and a local investor, to purchase 100MW of power from diesel generators. The deal was criticized by consultants and donors regarding its cost, technology choice, and projected power demand.
• The IPTL agreement is characterized as a failed Public-Private Partnership (PPP) due to alleged corruption, the absence of a proper feasibility study, and a lack of stakeholder consultation. Tanesco paid for capacity regardless of need; in 2002, it paid $40 million in capacity payments despite the project functioning at less than 10% capacity thereafter.
• The deal resulted in Tanesco paying inflated prices for electricity it did not require, as the primary infrastructure deficit was a lack of gridlines rather than generating capacity. IPTL electricity cost 12 US cents per unit, compared to Tanesco's 7 to 9 US cents per unit, with an additional $3 million monthly in statutory costs.

APA

South African Institute of International Affairs (2008). Power deal tainted by graft. https://saiia.org.za/news/case-study-power-deal-tainted-by-graft/

Chicago

South African Institute of International Affairs. Power deal tainted by graft. 2008. https://saiia.org.za/news/case-study-power-deal-tainted-by-graft/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Power deal tainted by graft |date=24 April 2008 |url=https://saiia.org.za/news/case-study-power-deal-tainted-by-graft/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2008power, author = {{South African Institute of International Affairs}}, title = {{Power deal tainted by graft}}, institution = {South African Institute of International Affairs}, year = {2008}, month = apr, url = {https://saiia.org.za/news/case-study-power-deal-tainted-by-graft/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }