Tanzania's economic resurgence has been well documented. A country that had suffered from years of stagnation, low investment and overbearing state control has gradually turned itself around as a result of economic reform. The renaissance has been even more impressive because ever higher growth figures have been based upon a diverse range of sectors from tourism to mining.
With the ruling Chama Cha Mapinduzi (CCM) safely returned to power, however, the government must now continue the improvement in national infrastructure and seek to boost industrial output. The power sector is perhaps the area where the biggest improvement can be made. The success of the Songo Songo gas-to-power project (Songas) has provided a much needed alternative to the country's traditional reliance on hydro schemes; new investment is tying the Tanzanian transmission grid to its Kenyan and Zambian counterparts. This should enable the country to play a full role in the emerging Southern African Power Pool (SAPP) and the East African power pool.
However, the government would be well advised to make the most of domestic generating resources before any thought is given to importing electricity. Imports could be vital during a sustained period of low rainfall that cuts production at the main hydro schemes but Tanzania also has the potential to export electricity during times of plenty.
Such an idea may seem fanciful at a time when the state power utility, the Tanzania Electricity Supply Company (Tanesco), is still unable to meet domestic demand, yet there is the potential for further hydro projects and ongoing offshore oil and gas exploration is likely to provide more gas feedstock for the domestic power sector.
Room for more power plants
The Ubungo power plant, which is the main recipient of Songo Songo gas, has proved to be an overwhelming economic and industrial success and so further plants could be developed to supply Tanzanian consumers.
Yet with the development of cross-border transmission interconnectors, private investors could also be enticed to invest in power plants in order to supply neighbouring states. Independent power producers (IPPs) in Africa are not an attractive option for the vast majority of international power companies but there is a new generation of power firms which could provide the necessary capital.
The UK's emerging markets power sector specialist, Globeleq, holds a 60% controlling stake in the Songas venture and has...