Summary
· Sh3.049 trillion budget for energy ministry for the fiscal year 2023/24 was in line with President Samia Suluhu Hassan’s goal of expanding electricity coverage, protecting the environment through the use of clean energy, protecting Tanzanians against volatile global petroleum prices and ensuring that Tanzanians benefit from its massive natural gas resources.
Dar es Salaam. The government yesterday pledged to continue investing in
the implementation of energy projects in 2023/24.
The plan is aimed at raising
electricity generation, reducing the use of solid biomass for cooking, building
a gas-based economy and raising Tanzania’s petroleum reserves.
Energy minister January Makamba told
Parliament that the proposed Sh3.049 trillion budget for his ministry for the
fiscal year 2023/24 was in line with President Samia Suluhu Hassan’s goal of
expanding electricity coverage, protecting the environment through the use of
clean energy, protecting Tanzanians against volatile global petroleum prices
and ensuring that Tanzanians benefit from its massive natural gas resources.
Apart from completing the
construction of the 2,115MW Julius Nyerere Hydropower Project, the government
will continue with the preparations for the execution of the $42 billion
liquefied natural gas (LNG) plant and completing the task of connecting all villages
to electricity.
Mr Makamba said the government will
implement at least ten electricity generation projects and start execution
preparations of several others during the next fiscal year as part of its wider
goal of producing at least 5,000MW by 2025.
Currently, the various plants,
connected to the national grid have the capacity of producing 1,872.04MW, being
a 10.5 percent improvement from the 1,694.55MW that were reported at the end of
the 2021/22 financial year.
He exuded confidence that implementation
of at least ten of the ongoing projects - which will cost taxpayers over
Sh1.985 trillion – will put the country on the right path to attaining the
desired production in line with the CCM Manifesto for 2020 elections.
In fact, out of the entire Sh3.049
trillion being sought, a staggering Sh2.96 trillion – which translates into
97.1 percent of the ministry’s total budget for the fiscal year 2023/24 – will
be spent on development projects.
The Julius Nyerere Hydropower
Project will get the lion’s share of development funds, with Sh1.5 trillion
planned to be spent on the remaining aspects of its implementation.
Mr Makamba told the House that the
Sh6.55 trillion – which is fully financed by the government - project has so
far reached 86.89 percent.
“The dam will reach power generation
level in one week period because as of May 23, 2023, the dam’s water depth has
reached 160.51 metres above sea level while to initiate electricity generation,
the water level has to reach a minimum of 163 metres above sea level,” he said.
The government has also set aside
Sh40 billion for the Kinyerezi 1 Power Plan Expansion Project that will produce
185MW, and Sh6.27 billion for the Ruhudji Hydroelectric Power Station for 358MW
hydroelectric power station.
Over Sh5.25 billion for 222MW
Rumakali Hydroelectric Power Station, Sh500 million for 321 MW Kikonge
hydropower project, and Sh15.52 billion for the Malagarasi hydropower project
for 44.8MW hydropower plant.
For 87.8MW Kakoko project the
government has set aside Sh39.15 billion, and Sh27.63 billion for the solar
power project in Shinyanga.
The government has also set aside
Sh345 billion for the major 150MW Mawe project and Sh6.5 billion to continue
the maintaining the Hale hydropower plant.
According to the minister the
implementation of these project is significant considering the skyrocketing of
power demand in Tanzania.
Mr Makamba said, “ The electricity
demand has rapidly increased in the ending year, where the record for peak
demand has broken eight times, which is unprecedented in the country’s history.
“Moreover, the current electricity
production in the country does not align with the rapidly growing economic and
social activities, resulting in a significant infrastructure deficit for electricity
transmission and distribution,” he said.
The minister revealed that despite
the considerable achievements in rural electrification, there are still
approximately 36,101 hamlets out of the total 64,760 hamlets are yet to be
connected to the electricity grid.
“The electricity demand in the
country has continued to grow, where during the period of 2022/23, the average
electricity demand was 1,363.94 MW, representing a 6.9 percent increase
compared to the average of 1,276.43 MW in 2021/22,” he said.
“During this period, the peak
electricity demand has increased to 1,431.59 MW (as of May 15, 2023, at 2:00
AM), showing a 6.8 percent increase compared to the 1,340.68 MW reached in
2021/22 (as of May 26, 2022, at 2:00 AM),” said the minister.
According to him this increase in
demand is attributed to the rise in large customers, especially industries and
businesses, which have increased by 5.6 percent, as well as the growth in
economic and social activities.
Mr Makamba said as the world
struggles with the impact of climate change, focus globally and Tanzania has
been on the clean energy transition, using sources with little carbon or no
carbon at all.
“We now have to implement strategies
to strengthen the use of energy sources with low impact on the environment such
as water sources, renewable energy and natural gas which has been identified as
a source of transitional energy that can be used until the year 2050,” he said.
This came as after years of intense
negotiations, the highly anticipated liquefied natural gas (LNG) project in
Tanzania came to an end earlier this month, and the minister reveal that a
special legislation is underway.
Mr Makamba said the proposed
legislation will soon be submitted to the parliament for thorough discussion
and eventual approval.
“Likewise, considering the magnitude
and uniqueness of this project, and as a measure to ensure its coordination,
monitoring, and effective facilitation for timely and intended benefits, the
Government has established a Special Project Office under the Ministry of
Energy,” he said.
Earlier this month, Equinor and
Shell Tanzania agreed to a deal with the government of Tanzania for the
development of the LNG plant after President Samia Suluhu Hassan’s
administration decided to expedite the Host Government Agreement (HGA) talks
that had stalled for years in the past administration.
The project’s cost is estimated at
$42 billion (equivalent to Sh98.7 trillion).
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