Wiktor Wise
Access to electricity in Tanzania is low, with estimates ranging from 14% in 2014 to 36% of households in 2020. The World Bank has committed to supporting Tanzania in increasing access to electricity, with a portfolio of 28 national projects. The Tanzanian government is also taking steps to improve access, with a focus on expanding the grid to rural areas, enhancing the role of renewable energy, and increasing generation capacity with natural gas. However, progress has been slow due to the high upfront capital investments required and the need to balance funding between various public services.
| Characteristics | Values |
|---|---|
| Percentage of Tanzanians with access to electricity | 14% (as of 2016) |
| Number of Tanzanians with access to electricity | 576,000 (including 125,000 women) |
| Percentage of households with electricity | 36% (as of July 2020) |
| Percentage of households in Tanzania Mainland with electricity | 32.8% (as of 2016) |
| Electricity generation capacity in 2020 | 1,601.84 MW |
| Percentage of urban areas with electricity | 73.2% (as of April 2020) |
| Percentage of rural areas with electricity | 24.5% (as of April 2020) |
| Number of rural electrification connections planned | 4,250 |
| Photovoltaic (PV) solar energy installed in Tanzania | 6 MW |
| Renewable energy generation goal by 2025 | 6,000 MW |
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What You'll Learn
Tanzania's electricity access rate is low compared to neighbours
Tanzania has made progress in expanding access to electricity, with the percentage of households connected to electricity increasing from around 13% in 2008 to 32% in 2017. However, this access rate is still low compared to some of its neighbouring countries. For instance, while Tanzania had an electricity access rate of 32% in 2017, South Africa and Ghana had much higher rates of 75% and 60% respectively.
There are several reasons for Tanzania's relatively low electricity access rate. Firstly, expanding the electric grid to remote rural areas requires significant upfront capital investments and public subsidies, which often compete with funding for other essential public services such as education, health, and road infrastructure. Additionally, the high reliance on expensive thermal and emergency generation sources has made the sector financially unviable. Power outages in the country's capital, Dar es Salaam, are often caused by old cables and transformers, and the national electric utility, TANESCO, has faced substantial financial difficulties.
To improve electricity access, the Tanzanian government has implemented various initiatives. The Rural Electrification Expansion Program aims to provide access to electricity for at least 500,000 households, schools, hospitals, and businesses in rural villages. The government is also supporting the development of renewable energy sources, such as solar power, with a goal of producing 6,000 MW from renewable sources by 2025. Additionally, the World Bank has committed to supporting Tanzania in increasing electricity access, with projects focused on grid expansion, improving reliability, and reducing poverty.
Despite these efforts, Tanzania's electricity access rate remains low compared to some of its neighbours. However, with continued investments in infrastructure development, renewable energy sources, and support from organizations like the World Bank, there is potential for significant improvement in the coming years.
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The World Bank is supporting the Tanzanian government
As of 2017, only 32% of Tanzanians have access to electricity, up from 13% in 2008. The World Bank is actively supporting the Tanzanian government in its efforts to increase access to electricity. The Bank has committed to helping Tanzania achieve its goal of becoming a middle-income country by 2025 and reducing the proportion of its population living in poverty.
The World Bank has approved a credit of $45 million to improve the socioeconomic impacts of large and small-scale mining, attract investments, and allocate mining resources equitably, especially to the poorest communities. Additionally, the Bank has provided a grant of $4.5 million to finance access to a sustainable water supply through improved solar pumping systems in 165 rural Tanzanian villages. The World Bank is also supporting the Tanzanian government through a program aimed at expanding access to affordable, reliable, and modern energy, while ensuring the financial sustainability of the energy sector.
The Tanzania Rural Electrification Expansion Program, approved by the World Bank with $200 million in funding, aims to connect 2.5 million rural households to the national electricity grid. This program supports the Tanzanian government's national energy policy, which targets increasing overall electricity connectivity to 50% by 2025 and 75% by 2033. The World Bank is also assisting with power generation and capacity strengthening, as well as development policy operations.
Furthermore, the World Bank is contributing to knowledge works that inform government-led reforms and help design programs and projects. The 2014 Country Economic Memorandum, for example, offers an action plan that will guide the Bank's future lending and technical assistance programs. The World Bank is committed to supporting Tanzania's progress, with a portfolio of 28 national International Development Association (IDA) projects, including five Programs-for-Results (PforRs) and two budget support operations, totaling approximately $4.2 billion in net commitments.
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Tanzania's energy mix is being enhanced
As of 2020, Tanzania's electricity generation capacity was 1,601.84 MW, with natural gas accounting for 55.7%, hydropower 35.8%, heavy fuel oil 5.5%, and biomass 0.6%. The country has significant untapped renewable energy potential, particularly in hydropower and solar energy.
Tanzania has made progress in grid expansion and increasing generation capacity with natural gas. The country has published a new standard Power Purchase Agreement for small producers and is facilitating an enabling environment for solar home systems. The inauguration of the Nyerere Hydropower Plant has increased Tanzania's electricity generation capacity to over 2115 MW. There are also planned large hydro projects at Ruhudji (360 MW), Rumakali (22 MW), and Stieglers Gorge (2,100 MW). The Tanzanian government plans to start operating the Julius Nyerere Hydroelectric dam, with the first of nine turbines going into operation in June 2022.
Tanzania's energy mix is also being enhanced by the development of its offshore gas reserves. As of 2022, negotiations were ongoing to develop the 10 million tonnes per annum Tanzania Liquefied Natural Gas Terminal, with a final investment decision expected in 2025. The country aims to become an exporter of LNG by 2030.
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The Tanzanian government is supporting the private sector
As of 2016, only 32.8% of households in mainland Tanzania had access to electricity. The World Bank has committed to supporting the Tanzanian government in expanding access to affordable, reliable, and modern energy. The Tanzanian government is supporting the private sector in developing its electricity market and enhancing the role of renewable energy in the energy mix.
Secondly, the Tanzanian government has implemented the Tanzania Energy Development and Expansion Project (TEDAP), which has provided access to electricity to 576,000 people, including 125,000 women. The project's off-grid component has stimulated private sector-led development in renewable energy, particularly for small power producers who would otherwise struggle to connect to the national grid. This has resulted in increased competition and improved services in the electricity market.
Additionally, the government has been working on large hydro projects, such as the Julius Nyerere Hydroelectric dam, which started operating in 2022, and the Stieglers Gorge project, with a capacity of 2,100 MW. These projects involve both the Tanzanian government and private developers, showcasing the government's support for private sector participation in the energy sector.
The Tanzanian government has also been collaborating with international organizations to improve access to electricity. For example, the World Bank signed a grant agreement worth USD 4.5 million to finance access to sustainable water supply through improved solar pumping systems in rural Tanzanian villages. This not only supports the private sector in rural areas but also contributes to the government's goal of increasing rural electrification.
In conclusion, the Tanzanian government is actively supporting the private sector in the development of the electricity market. Through initiatives promoting renewable energy, hydro projects, and international collaborations, the government aims to increase access to electricity for its citizens. These efforts are crucial for Tanzania's socioeconomic goals and projected economic growth, as energy fuels development and improves living standards.
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Power cuts and fluctuations are common
The average electricity consumption per capita in Tanzania is 108 kWh per year, which is significantly lower than the Sub-Saharan African average of 550 kWh and the world average of 2,500 kWh. This low consumption is partly due to the frequent power cuts and fluctuations that Tanzanians experience. These power issues have negative economic impacts, with businesses identifying routine load shedding and power outages as a serious constraint to their operations.
Climate change-induced water shortages and broken infrastructure have contributed to a 400-megawatt electricity shortfall in Tanzania, leading to power rationing. The state power supplier, TANESCO, attributed the shortfall to issues such as broken infrastructure at gas wells and gas-fired power stations, as well as reduced water levels at hydropower dams due to droughts and irregular rainfall patterns.
Tanzania's electricity sector faces challenges in keeping up with the growing demand. The country has a high reliance on expensive thermal and emergency generation sources, making the sector financially unviable. Additionally, there is a need for significant investments to expand the electric grid to remote rural areas, which often competes with funding for other essential public services.
To address the power cuts and fluctuations, Tanzania has contracted Emergency Power Producers (EPP) and is pursuing an energy transition from fossil fuels to renewables. The country has favourable policies to attract investment in renewables, including tax breaks for solar components. The government is also supporting the development of the electricity market, enhancing the role of renewable energy, and increasing rural electricity access. Large hydro projects, such as the Julius Nyerere Hydropower Dam, and solar energy investments are also part of the country's efforts to improve its power infrastructure.
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Frequently asked questions
As of 2017, 32% of Tanzanians have access to electricity, up from 13% in 2008. However, some sources state that the figure is as low as 14%.
The Tanzanian government is supporting the private sector in developing its electricity market, increasing the role of renewable energy, and enhancing access to electricity in rural areas. The government has also invested in solar development by removing VAT and import taxes on solar panels, batteries, inverters, and regulators.
Expanding the electric grid to remote rural areas requires significant upfront capital investments and public subsidies, which often compete with funding for other essential public services such as education and health. Additionally, technical choices can be challenging due to evolving technologies and the discovery of new gas reserves.
Limited access to electricity affects the daily lives of Tanzanians, particularly businesses, which experience routine load shedding and power outages. This hinders economic development and contributes to slow poverty reduction.
Tanzania relies primarily on natural gas for over half of its electricity generation. Other sources include hydropower, biomass, heavy fuel oil, and solar energy. The country has a wide range of energy resources that remain untapped, including wind, geothermal, uranium, and coal.
