Tanzania seeks to curb load shedding

Lusaka – Tanzania, Africa’s third largest gold producer, seeks to secure US$150 million to finance a new hydro power transmission facility to improve the availability of electricity and boost mining and other economic activities in the country’s vast regions. According to a statement by Tanzania’s world task team leader, Pankaj Gupta, the project is intended to positively impact on the overall development and growth of the country’s economy. It is chiefly expected to “alleviate the increased demands for electricity in northern parts of Tanzania due to increased mining and other economic activities in the area.” It is projected that in the in the medium to long term, the project is expected to facilitate power trade in the region by providing the link between the Eastern Africa Power Pool and the Southern Africa Power Pool linking Tanzania with Kenya in the north and Zambia in the south. The southern African region has been prone to power outages because of a wide deficit in power generation in the 14-member states, despite increased demand from the mining industry and the growing economic scales of the member countries. According to a recent study by World Bank it is estimated that load shedding and emergency generation costs Tanzania over 5 percent of gross domestic product annually. The African Development Bank (AfDB), European Investment Bank (EIB), Japan International Cooperation Agency (JICA) and Korean Economic Development Cooperation Fund (EDCF) are expected to be parallel financiers to the project. According to data, the World Bank’s currently active country portfolio includes 25 operations with a net commitment of $2.85 billion. Additionally, Tanzania benefits from 11 regional World Bank projects, in which Tanzania-specific financing amounts to over $230 million. Tanzania is Africa’s third largest gold producer, but also has reserves of uranium, nickel and coal. Gold exports alone earned it $1.076 billion in 2009, up from $932.4 million the previous year. Persistent power shortages in Tanzania, East Africa’s second largest economy, caused by years of  under-capitalization  spurred by surging demand,  have undermined growth in the East African nation with an estimated  population of 41 million, of which a paltry 14 percent of the populace have access to electricity.

September 2010
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