Tanzania bets on megaprojects to propel its energy future

Tanzania's energy sector has been largely dominated by a mix of thermal and hydropower as the east African country pushes to explore its natural resources, improve access to electricity and energise its industries.

Total installed power capacity in Tanzania is estimated at almost 1.7GW. Gas fired thermal power plants account for 45% of grid power, while the other bulk of 45% comes from hydropower. Liquid fuel (13%) makes up the remaining installed power generating capacity in the country.

But with a national electrification rate of 43%, according to the latest SDG Energy Progress Report, Tanzania is looking to bolster its power generation industry. As a result, Tanzania already has a five-year National Development Plan that targets an installed power capacity of 5.7GW by 2025.  

The country is betting on several megaprojects to bridge the gap and transform its energy landscape.

What are some of these ventures?

Julius Nyerere Hydropower Plant

When former President John Magufuli came to power, he made the dam at Tanzania’s Rufiji River one of his signature infrastructure projects, and a legacy to honour the country’s founding president Mwalimu Julius Nyerere.

Consequently, the construction of the Julius Nyerere Hydropower Plant, also known as Rufiji hydroelectric station, was officially launched in 2019 after the Government of Tanzania signed a joint construction contract with Arab Contractors and El-Sewedy from Egypt.

In December last year, Tanzania’s President Samia Suluhu Hassan attended an official ceremony for the water filling of the dam. During the ceremony, she said the dam would be able to store enough water to generate electricity even when rainfall declines.

The 2,115MW project, scheduled for completion in 2024, will be one of sub-Saharan Africa's biggest hydroelectric facility. It is expected to be able to generate up to 6,307 GWh a year.

The massive project is also part of Tanzania’s power master plan, which aims to interconnect the grids of Tanzania, Kenya, Uganda and Zambia.

The EACOP Pipeline

The East African Crude Oil Pipeline Project (EACOP) is a pipeline that will transport oil produced from Uganda's Lake Albert oilfields to the port of Tanzania for onward sale to international markets.

With an export flow rate of 216,000 bopd, the EACOP will be the longest heated crude oil pipeline in the world.

As Uganda races to produce its first barrel of oil in 2025, French major TotalEnergies is developing the 1,443km pipeline from Hoima in Uganda to an oil depot and an offshore loading terminal in Tanga, Tanzania. The Tanzania Petroleum Development Corp. (TPDC) holds a 15% stake in the project.

The new corridor linking the two countries is expected to speed up development of new infrastructure, logistics and technology transfer along the route.

Two export routes had been considered for the pipeline, one through Kenya and the other one through Tanzania. But numerous concessions given by the Tanzanian government led TotalEnergies to sanction the latter route.

Last year, TotalEnergies took a final investment decision on the development of the Lake Albert oilfields and the EACOP pipeline.

The pipeline project is worth $3.5bn with an estimated $20bn value chain, according to PwC.

Tanzania LNG

Tanzania is also expediting the development of its own natural resources to secure energy for use at home and abroad.

In May, Tanzania and oil majors concluded long-delayed negotiations for a $42 billion onshore liquefied natural gas plant, as the country looks to ship its first LNG within five years. The project’s consortium includes Equinor ASA, Shell Plc and Exxon Mobil Corp and could see Tanzania export some 10 million tonnes per annum (mtpa) of LNG by the end of the decade.

The LNG plant is expected to rely on the development of vast offshore gas fields discovered in southern Tanzania, making gas available for local and international markets.

About 10% of the gas from the terminal, when completed, will be used domestically power industries, according to Tanzania’s Energy Ministry’s permanent secretary, Felchesmi Mramba.

For Tanzania, thermal generation is becoming more important as dam levels are low, leaving hydropower plants unable to generate as much as they used to. As a result, there’s an increasing demand for domestic gas to feed the thermal turbines. 

In June, on the sidelines of an energy conference in Kenya’s capital, Nairobi, Mramba told newsmen that Tanzania was working on a special law to speed up the construction of the LNG plant ahead of a final investment decision on the project.

“The earlier we accomplish these two, the earlier the foreign direct investment comes,” he said.