Power Export Aspirations Could Leave Population In The Dark
BMI View: Although we believe that the Tanzanian government's plans to export power over the short-term are unfeasible, given the current dynamics in the country's power sector, the announcement serves to highlight the government's apparent willingness to side-step vast portions of the population in order to boost economic growth. Such a move could potentially elevate already heightened tensions amongst the population who are becoming increasingly dissatisfi ed with the levels of economic disparity across the country.
We have long highlighted the inadequacies of the Tanzanian power sector, as under-investment and inefficiencies have curtailed growth in the industry, particularly in terms of the transmission and distribution network and installed capacity. The supply/demand gap remains tight, exacerbated by unreliable output from the hydropower segment during times of low rainfall.
However, we have begun to see signs of progress during 2013 with several new power project announcements and investor interest picking up. For example, in March two new power station projects were announced, a US$900mn 400MW gas-fired station in Mtwara, in the south east of the country, and a 150MW hydropower plant, to be built by Kitonga Electric Power Company Limited, to power the Kitonga Valley region (see 'New Power Projects Do Not Prompt A Change In Outlook', March 11). Most recently, an agreement between TANESCO and China Power Investment Cooperation Limited (CPI) to develop the Kinyerezi III 600MW gas-fired power station has prompted the government to announce that it plans to start exporting electricity by the end of the year - as the capacity surplus will be about 500MW, according to the Minster for Energy and Minerals, Sospeter Muhongo. The Minister went on to say that the surplus will reach 1,500MW by 2015, thus providing even greater scope for power exports.
|Tanzania Electricity Consumption, Generation and T&D Losses, 2012-2022|