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Tuesday, December 10, 2013 

TANESCO to cancel generators contract

nMWANZA, Tanzania-- The Tanzania Electric Supply Company Limited (Tanesco) Board of Directors recently agreed to suspend the services of US company, Symbion Power and Glasgow-based Aggreko plc effective October, 2014.

Board Chairman, retired General, Robert Mboma has written to the Permanent Secretary, Ministry of Energy and Minerals Eliakim Maswi informing him of the decision.

“We have reached this decision to avoid further losses due to exorbitant power prices, capacity charges the companies charge TANESCO,” Mboma said.

He said by suspending Symbion and Aggreko, TANESCO would save Tsh 25 billion (about $15 million) per month.

Gen Mboma was responding to Maswi’s letter of November 4, 2013 in which he expressed the Ministry’s concerns in regards to TANESCO’s performance.

The Ministry letter touched on high capacity charges, TANESCO Board/Ministry working relations and excessive and costly Board meetings.

According to Gen. Mboma, the Tanzania power utility, pays capacity charge to those companies, Symbion, Aggreko and Independent Power Tanzania Limited (IPTL) to the tune of Tsh 26.6 billion per month.

In fact Gen. Mboma tells the government that Tanesco is in the doldrums. He says the few fuel generators owned by Tanesco generate one kwh for Tsh750 ($0.46) but sells the same one kwh to customers for Tsh221 ($0.13) only.

The towns of Kigoma, Mpanda, Kasulu, Kibondo, Newala, Songea, Mbinga, Loliondo, Sumbawanga, Mafia use fuel-powered generators. 

“TANESCO incurs big losses and the only solution is to connect the towns/regions to the national grid and start power generation at Malagarasi and Kagera rivers.,” Gen. Mbona said in his reply to Maswi.

TANESCO’s generation division is responsible for all power generation functions owned by Tanesco. Other sources of generation are from Independent Power Producers (IPPs) that feed the National grid and isolated areas as well.

Its generation system consists mainly of hydro and thermal based generation.  Hydro contributes 57% of total power generation from January, 2012 up to December, 2012.

 

Gas and thermal contributes the remaining amount. Future generation plan will largely be led by coal, wind and gas.

By Andrew Zablon, Tuesday, December 10th, 2013