Prime
Tanesco vs IPTL: The saga continues
The IPTL power generation plant in Tegeta, Dar es Salaam. PHOTO | FILE
What you need to know:
- In his latest report presented to President Samia Suluhu Hassan, Mr Kichere explained that despite the ongoing issue surrounding the non-renewal of IPTL’s license between 2017 and 2022, the company has filed several other claims for compensation, production costs, and legal fees against Tanesco.
Dar es Salaam. The Controller and Auditor General (CAG), Charles Kichere, has disclosed that the Tanzania Electric Supply Company (Tanesco) is facing a significant claim from Independent Power Tanzania Limited (IPTL), amounting to Sh238.7 billion.
This debt includes Sh111.48 billion in principal along with 127.2 billion shillings in interest as part of an ongoing financial dispute.
In his latest report presented to President Samia Suluhu Hassan, Mr Kichere explained that despite the ongoing issue surrounding the non-renewal of IPTL’s license between 2017 and 2022, the company has filed several other claims for compensation, production costs, and legal fees against Tanesco.
Tanesco, however, asserts that the dispute over the license renewal was settled through Case No. 200 of 2015.
The controversy surrounding IPTL’s financial dealings with the government dates back to the 2015 case, which was expected to settle various legal and financial disputes.
However, the claims from IPTL continue to grow, leaving Tanesco in a precarious financial position.
Mr Kichere also highlighted IPTL's outstanding debt to the government, noting that by June 2024, IPTL had failed to repay $148 million (approximately Sh389.8 billion), money owed to the government since February 2022, arising from the Tegeta Escrow fund agreement.
In light of these findings, Mr Kichere has recommended that the government thoroughly review all the claims associated with IPTL’s debts.
This audit would assess the legitimacy, accuracy, and execution of the legal agreements, which are central to resolving this financial stalemate.
“The government should focus on recovering the 148 million US dollars owed by IPTL in line with the 2021 agreement regarding the Tegeta Escrow funds,” Kichere urged in his report.
The recommendation comes as part of the government’s ongoing efforts to ensure financial accountability and transparency, particularly in dealings with independent power producers.
The Tegeta Escrow fund became a key point of contention between IPTL and the government, designed to settle various financial obligations.
However, the failure to resolve these issues has left both parties in a state of uncertainty, with financial implications not only for Tanesco but for the wider energy sector as well.
