POWER AND THE PRIVATE SECTOR IN TANZANIA: PROSPECTS FOR THE AFDB’S HIGH FIVES STRATEGY

The document analyzes the challenges and opportunities for expanding electricity access in Tanzania, focusing on the role of the private sector and the AfDB. It highlights the financial instability of the national utility, TANESCO, and the impact of recurring droughts on hydropower. The paper argues for a shift toward renewable energy and the development of a local renewable energy value chain to support industrialization and rural access.

• Tanzania faces significant electricity access disparities, with less than 16% of the total population having access in 2014; while 41.2% of urban areas are connected, only 4% of the rural population has access.
• The national electricity utility, TANESCO, suffers from severe financial instability and operational inefficiency, characterized by neglected infrastructure and transmission and distribution losses that reached 17.8% in 2012.
• Tanzania's reliance on hydropower makes its energy security vulnerable to climatic events; recurring droughts since the early 2000s caused the share of hydro-generated electricity in total capacity to drop from 95.1% in 2004-2006 to 27.1% in 2015.
• To compensate for hydropower shortages, Tanzania has relied on expensive emergency hydrocarbon generation, which increased from 334GWh in 2000 to 4,583GWh in 2015.
• The AfDB's 'New Deal on Energy for Africa' aims for universal electricity access by 2025, but the paper suggests this may be unrealistic for Tanzania given its geography, demography, and the financial state of TANESCO.
• Tanzania has a high potential for non-hydro renewable energy, including an estimated 650MW of geothermal potential and theoretically unlimited solar and wind resources, yet these are often deprioritized in favor of coal and gas.
• The development of a renewable energy value chain (REVC) is identified as a missed opportunity in the AfDB's strategy that could otherwise support Tanzania's industrialization goals and local beneficiation.
• Private sector participation is facilitated by the Small Power Producer’s Programme, which uses standardized contracts and fixed feed-in tariffs (FITs) for producers under 10MW, guaranteeing offtake by TANESCO for at least 15 years.
• Major barriers to foreign direct investment (FDI) in the energy sector include payment risks due to TANESCO's arrears—which were 0.7% of GDP in early 2016—and a lack of clear, predictable feed-in tariffs for large-scale renewable projects.
• Tanzania's integration into regional power pools (SAPP and EAPP) is currently limited by inadequate transmission infrastructure, with imports from Zambia and Ethiopia representing less than 1% of total capacity in 2015.

APA

Prinsloo, C., & Bertelsmann-Scott, T. (2017). POWER AND THE PRIVATE SECTOR IN TANZANIA: PROSPECTS FOR THE AFDB’S HIGH FIVES STRATEGY. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2017/11/Occasional-Paper-272.pdf

Chicago

Prinsloo, Cyril, and Talitha Bertelsmann-Scott. POWER AND THE PRIVATE SECTOR IN TANZANIA: PROSPECTS FOR THE AFDB’S HIGH FIVES STRATEGY. South African Institute of International Affairs, 2017. https://saiia.org.za/wp-content/uploads/2017/11/Occasional-Paper-272.pdf.

Wikipedia

{{cite report |last1=Prinsloo |first1=Cyril |last2=Bertelsmann-Scott |first2=Talitha |title=POWER AND THE PRIVATE SECTOR IN TANZANIA: PROSPECTS FOR THE AFDB’S HIGH FIVES STRATEGY |publisher=South African Institute of International Affairs |date=November 2017 |url=https://saiia.org.za/wp-content/uploads/2017/11/Occasional-Paper-272.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{prinsloo2017power, author = {Prinsloo, Cyril and Bertelsmann-Scott, Talitha}, title = {{POWER AND THE PRIVATE SECTOR IN TANZANIA: PROSPECTS FOR THE AFDB’S HIGH FIVES STRATEGY}}, institution = {South African Institute of International Affairs}, year = {2017}, month = nov, url = {https://saiia.org.za/wp-content/uploads/2017/11/Occasional-Paper-272.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }