What Sh4.4 trillion revamp of electricity network means

 

By Josephine Christopher

Josephine Christopher is a business reporter for The Citizen and Mwananchi newspapers.

Mwananchi Communications Limited

Summary

·         Work to be undertaken in the next four years is meant to stabilise the national electricity grid and end frequent power cuts

Dar es Salaam. Agreements totalling Sh1.9 trillion were signed yesterday as part of the government’s wider plan to stabilise the national power grid and end frequent electricity cuts.

A total of 40 agreements were signed yesterday, and out of the number, 26 – which are valued at Sh1.68 trillion – involve conducting repairs and maintenance of the Tanzania Electric Supply Company Limited (Tanesco) infrastructure as part of the first phase of the National Grid Stabilisation Project.

The remaining 14 projects – valued at Sh385 billion – will be implemented through the Rural Energy Agency (REA).

Speaking during the event, which was witnessed by President Samia Suluhu Hassan, Energy minister January Makamba said the overriding goal of the project was to end shortages and improve access as well as distribution of electricity in the country.

“These projects are crucial to stabilising the national grid since they will increase access to and distribution of electricity, particularly in rural areas, where the government has promised to reach every village by 2023,” he said.

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In a nutshell, the country will spend a total of Sh4.42 trillion to upgrade substations and transmission lines and stabilise national grid power under the four-year project.

The agreements that were signed yesterday cover the first phase of the project, which will run for two years from the current financial year.

“The first phase entailing 26 projects will be implemented in two years, and the government has allocated Sh500 billion in the current financial year,” Mr Makamba said.

With little being done on the repair and maintenance of the Tanesco infrastructure for several years now, power supply has been erratic.

Tanesco managing director Maharage Chande said implementation of the projects was part of the government’s endeavour to meet growing demand for power, increase distribution in rural areas and spur economic activities across the country.

“In previous years our estimates were that demand would grow at six percent annually, but currently we are talking about an annual growth in demand of 11 percent,” he said.

Mr Chande added that it was unfortunate that the increase in demand had come at a time when Tanesco’s infrastructure was dilapidated, inadequate and poorly designed.

In his remarks, REA director general Hassan Said said the agency had far connected 9,467 out of Tanzania’s 12,345 villages.

“Connection in the remaining 2,878 villages is still in process and contractors are on site,” he said.

Mr Said added that investment in the energy sector was crucial because of its significant contribution to the overall economy and facilitation of productive sectors.

President Hassan said the development energy sector was of strategic significance in supporting other sectors such as agriculture and water supply.

“We have various existing and planned irrigation schemes that will require power to run. Water distribution, the pumps, and infrastructure in these sectors all depend on the availability of electricity.

“Projects like those implemented by REA target rural communities and this will influence the economic well-being of individual households and help to boost the economy at micro level,” she said.

President further explained that although these strategic projects are expensive, the government will devise ways sourcing funds both locally and outside.

“I know we have financing challenge, and this project needs a total of over Sh4.4 trillion...and if you ask me now where am I going to find these funds, honestly I don’t know yet,” she said adding, “I have asked respective ministers to draft proposals and funding plans and these are on how to source locally, but I also believe we will have outside partners who will assist us,” she said.

The President’s implementation of strategic projects and their funding has been one of her key focus areas since she came to power. However, the government has since succeeded in sourcing funds and fast-tracked implementation of projects including the standard gauge railway and construction of the Julius Nyerere Hydropower Station.

In an effort to expedite implementation of the projects, the President also warned against halting project implementation because of prolonged complaints from contractors who were not successful during the bidding stage of the tender.

President Hassan said the cases have been a normal occurrence where those who failed to win government tenders decide to file complaints at regulatory institutions such as the Public Procurement Regulatory Authority (PPRA) and in the process, delay the project implementation.

“These cases take months to be resolved, and sometimes the whole tender process is redone again. I believe we have people who do a thorough reviews of these tenders and when it’s completed project implementation should start immediately.”