Public to buy 49pc of Tanesco shares

Nairobi. Tanzania’s government plans to sell shares in the state-owned power utility to the public this year and split it into separate generation, transmission and distribution units.

Energy and Minerals minister Sospeter Muhongo told The EastAfrican newspaper that the state will offer as much as 49 per cent of Tanzania Electric Supply Company (Tanesco) while the government will retain a controlling stake.

The government will also invest $1.2 billion in the company over 10 years, boosting efforts to increase electricity production to 10,000 megawatts by 2025 from 1,400 megawatts, Prof Muhongo said.

Business owners in Africa’s third-biggest gold producer told President John Magufuli at a meeting last month that inadequate and unreliable power supply is increasing production costs and frustrating their operations. It has come to the conclusion that the sector needs to be liberalised to expose Tanesco to competition.

“We invite local investors capable of generating 100MW to 5,000MW or more to come up. This will ensure the country has sufficient power supply for 10 or 20 years to come,” Prof Muhongo said.

He said the investors would be encouraged to generate electricity from coal, gas, hydro, solar, wind and thermal to realise energy mix that delivers reliable and cheap power.

The move by the Tanzanian government to attract private investors in the power sector has been driven by the increasing demand for electricity. Although 750,000 households are connected to the national grid, Tanzania has a supply deficit of 1,000MW that has led to loadshedding. The government plans to invest $1.2 billion (Sh2.4 trillion) in Tanesco over a decade, giving three in four of the country’s households access to electricity.

Under the Tanzania Electricity Supply Industry Reform Strategy and Roadmap 2014 to 2025, the financing of power projects is to be left to the private sector.