East African Business Week

DAR ES SALAAM, TANZANIA - The Government has embarked on negotiations with China-Exim Bank to finance the US$700 million Mnazi Bay gas-for-electricity project in southern Tanzania.
The $700 Mnazi Bay gas-for-electricity project is expected to generate 160 megawatts, which will be connected into the national power grid. According to the Government, the implementation of the project is expected to start late this year, whereby Tanzania will contribute 15% of the investment.
Mr. David Jairo, the Energy and Minerals permanent secretary said that the Tanzania and the China-Exim Bank are at an the advanced stage of negotiations on the modality of financing the 160 megawatts project.
He told East African Business Week in Dar es Salaam last week that Tanesco, the company that generates and distributes almost all power in the country, will be the implementing  agent along with two private power firms of Artumas - based in Mtwara, and the Tanzania Petroleum Development Corporation (TPDC) who own the project.
He said the Treasury, on behalf of Tanesco, is negotiating with China Exim Bank regarding the financing arrangement. Once the loan is secured, the Treasury will transfer the money to Tanesco for the implementation as soon as possible."
Implementation of short-term strategies such as the Mnazi Bay gas project will be a big boost to the country's power supply capacity, thus off-setting existing electricity shortages in Tanzania. To date the country is suffering from an acute shortage of power supply leading to power rationing, and gravely affecting industries and social activities.
Tanzania which for decades has been depending mostly on hydropower as the source of power generation, is affected by a shortage cause by low water levels  at the main Mtera dam following poor rains, and several others strung on one river.
The Energy and Minerals permanent secretary said the Government is stepping up strategic interventions to rescue the country from the looming power crisis, insisting that the Mnazi Bay gas-for-power project was one such intervention.
The country's power consumption stands at over 800MW, but it generates less than 450MW through hydro sources and other sources. To solve the power crisis, Tanzania has in recent years been engaging in different power generation contracts with local and international firms capable of generating electricity to easy the power shortage in the land.  
However, most of them have been disastrous in that, they ridden by corruption. Most of them installed emergency thermal generators, but there has been a move away to others sources of energy such as wind turbines to generate a minimum of 2MW and a maximum of ten 10MW.
To date preparations are at advanced stage for the construction of 100MW wind power generation at Makambako in the southern highlands of Tanzania expected to be in full operation in July 2013.
The 100MW  wind power project is being carried out jointly by three partners namely: Sino Tan Renewable Energy Ltd of Tanzania, MCC 20-Hainan International (of China) and Norks Vind Energi of Norway.