Tanzanian government is seeking to overhaul its energy legal and regulatory framework to attract investments in alternative sources of energy.
This follows after the state received a rude shock by America’s move to withhold $472 million from the Millennium Challenge Account last year. The board of the Millennium Challenge Corporation deferred a vote over Tanzania’s eligibility to the funds meant for electrification. It is suspected that this was because of the impasse in Zanzibar and the arrests under the cyber crime law during October elections.
The suspended $472 million grant was meant mainly to fund electrification projects through the country’s rural electrification agency, Rural Energy Agency.
The overhaul may see some regulatory authorities linked to the energy sector disbanded or merged, sources within the government say.
The review would enable the country achieve its ambitious plan of increasing access to power to over 90 per cent of the rural population by 2025.
Despite provision of solar energy to nearly 50 per cent of dispensaries in over 3,000 villages the government says lack of financial investment and technology hampered its efforts to expand energy services to 16,000 primary schools countrywide.
Tanzania has discovered massive natural gas amounting to 1.9 trillion cubic feet, 200 million tonnes of uranium and 200 million tonnes of coal but it lacks the technology, finance and expertise to develop the resources which could help the government increase its energy efficiency.
The Prime Minister Kassim Majaliwa appealed to investors to consider investing in the energy sector. “The government has the goodwill to allow investors to operate in Tanzania,” Mr Majaliwa said at the 51st Annual Meeting of the African Development Bank (AfDB).
Despite recent government efforts to provide electricity to rural areas, the rural electrification coverage is low in Tanzania with only 11 per cent of the population having access to electricity.
AfDB says that about $3.5 billion will be needed to increase the rural electrification ratio from 6.6 per cent to 36.6 per cent in rural areas and the urban rate from 34.2 per cent to 75.7 per cent.
