The number of people connected to power is set to increase in the future following a study for the implementation of small hydropower projects in the country, under the Rural Energy Agency (REA).
Completion of the study would enable the government to execute electricity projects especially in rural areas where over 86 percent of Tanzanians do not have access to power.
A statement issued by REA in Dar es Salaam over the weekend said the World Bank has issued USD 22.88m credit to the government, part of which will be used for the study.
The agency has announced tender for provision of consultancy services to carry out the job.
REA through its rural energy fund is intended to provide capital subsidies to buy down the cost of energy services and thereby reduce the risks to project developers envisioned to include communities, companies, local governments and others that are ready and capable of investing in the provision of modern energy services in rural areas.
The statement said whereas Tanzania has plentiful natural gas, coal, hydropower, solar and biomass resource potential, it has one of the world’s lowest levels of electricity consumption per capital.
Considerable scope exists for accelerating electrification to meet the growing demand especially in the rural areas through off-grid solutions, according to the bank.
Investment opportunities exist for developing hydropower dams, solar photovoltaic systems, biomass based co-generation in sugar, wood, and tea factories to provide electricity, the statement said.
Tanzania’s power sector is dominated by the national utility, Tanzania Electric Supply Company Ltd (Tanesco).
Total installed generation capacity is 1219 MW, from which hydropower comprises 561 MW and thermal 658 MW.
According to the Ministry of Energy and Minerals more investments are required in the sector to meet the projected growth demand.
Currently investment opportunities exist in the energy sector rural electrification are exploration of petroleum; generation, transmission and distribution of electricity, development of new and renewable energy resources and promotion of energy efficiency.
The rural energy projects developed with the facilitation of the agency will ultimately be owned and implemented by the private sector, NGOs and conservation initiatives.