Dar es Salaam. Tanzania could generate cumulative economic benefits exceeding $18 billion by 2030 if it effectively translates renewable energy policies into practice, according to new research that highlights the country’s untapped potential and persistent structural barriers.
The study shows that despite Tanzania’s abundant renewable energy resources, the sector currently contributes less than two per cent to the gross domestic product (GDP), largely due to financial, institutional and infrastructure constraints.
Titled Leveraging Renewable Energy for Inclusive Economic Growth in Tanzania, the study is the brainchild of EnergyCARD and Repoa.
The year-long research indicates that with targeted interventions, renewable energy technologies could contribute between 1.5 percent and 10 percent of GDP by 2034, driving wide-ranging economic gains.
These include savings from reduced fossil fuel imports, lower public health costs linked to pollution and increased fiscal revenues.
The report projects that improved adoption of renewable energy could cut fossil fuel imports by $200–300 million annually, easing pressure on foreign exchange reserves.
Speaking during the dissemination of the research findings, Repoa acting executive director Lucus Katera said Tanzania could unlock $4–5 billion in private investment by 2034, create over 150,000 jobs and strengthen energy security through diversified power generation.
“The progress has been slow. Since 2008, only 14 small power producer projects—each below 50 megawatts—have been implemented, reflecting a significant gap in private sector participation. This shortfall is due to regulatory uncertainty, high financing costs, grid integration challenges and weak institutional coordination,” Dr Katera said.
The research found that inconsistent policy implementation has prevented the country from fully benefiting from its renewable energy framework, despite strong national strategies and ambitious development goals. Implementation is hindered by fragmented mandates, lack of actionable guidelines and bureaucratic delays.
The study identifies strategic opportunities to accelerate renewable energy adoption, including binding renewable energy targets, blended financing mechanisms and sustained investment in human capital. Strengthening institutional coordination and improving access to affordable finance are also highlighted as key steps to encourage private sector participation.
Commenting on the findings, Ensol Tanzania Limited managing director Hamisi Mikate said the sector offers vast opportunities that remain largely untapped due to challenges such as limited access to financing.
He described the research as timely, noting that his company continues to collaborate with the government on projects to expand access to solar energy for productive and household use.
The research also highlighted technological challenges, particularly underdeveloped grid infrastructure in rural areas, which limits the integration of decentralised energy systems. Increased investment and policy focus are needed to address these gaps and accelerate renewable energy adoption
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