Tanzania Power Report Q2 2016
BMI View: Tanzania will focus on diversifying its power sector, moving away from a reliance on intermittent hydropower generation. Investment will be focused on thermal power, with the discovery of more gas reserves ensuring the opportunity for new gas-fired capacity in the long run, while coal-fired power will provide additional generation in the short term.
Latest Updates And Structural Trends
Tanzania has made more discoveries of natural gas in the Ruvu basin, totalling 2.17 trillion cubic feet (tcf). The discovery was made in a block operated by Dodsal Hydrocarbons and Power Tanzania Limited. Tanzania's current proven natural gas reserves now reportedly sit at up to 57.27tcf, which underlines our forecast that gas-fired power will be the focus of thermal power investment.
Edenville Energy are in the process of raising GBP400,000 for its coal-to-power project at Rukwa after having been granted a mining licence. Edenville is currently in talks with the distributor, Tanzania Electricity Supply Company (TANESCO) for a power purchase agreement (PPA) for the power plant.
According to the Kagera regional Tanesco manager, construction of the Rusumo Falls Hydroelectric Project will start later in 2016. The dam will have a capacity of 80MW which will be split evenly between Tanzania, Rwanda and Burundi.
Private-equity owned firm, SonGas, which supplies up to 20% of Tanzania's electricity, has threatened to stop generating electricity if Tanesco does not pay the money owed. Tanesco is currently suffering from a shortage of funds due to having to buy expensive back-up fuel for generators as the hydropower dams were generating below capacity.
Tanesco has announced that it will develop a monitoring and control power station, with the goal of being able to quickly identify in what area an infrastructure breakdown has occurred, enabling technicians to rapidly address the problem. The station is scheduled to be completed in 2016.
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