Tanesco makes record Sh110 billion profit

 

Tanzania Electric Supply Company Limited (Tanesco) mnaging director Maharage Chande adresses a working session involving the Treasury registrar, the firm's management in Dar es Salaam on July 27, 2023. PHOTO | SUNDAY GEORGE

By Alex Nelson Malanga

Business journalist

Summary

·         The company’s huge debt burden was also a major concern, with energy stakeholders asking the government to step in and clear the debts.

·         But now there is a change of narrative at Tanesco, a company with a balance sheet of Sh19 trillion.

Dar es Salaam. Tanzania Electric Supply Company Limited (Tanesco) has finally become a profitable entity, thanks to transformational initiatives undertaken by the government and the company itself.

The company registered a record Sh109.45 billion profit during the 2021/22 financial year, managing director Maharage Chande said yesterday.

He told a news conference in Dar es Salaam that the turnaround was attributable to various transformational measures, including the government’s decision to assume the responsibility of paying Tanesco’s debts totalling Sh2.4 trillion by converting them into equity.

The power supplier has also embraced digital transformation to improve services.

Tanesco had for many years been on the receiving end of complaints about unreliable electricity supply.

The company’s huge debt burden was also a major concern, with energy stakeholders asking the government to step in and clear the debts.

But now there is a change of narrative at Tanesco, a company with a balance sheet of Sh19 trillion.

“The Sh109.45 billion profit is a record since Tanesco’s inception in 1964. This is something worth celebrating,” Mr Chande said.

Tanesco chief financial officer Renata Ndege said profit rose by 42 percent in 2021/22 compared to the preceding year’s Sh77.14 billion, thanks to an increase in electricity sales.

During the review period, she added, electricity sales jumped by 11 percent to Sh1.85 trillion, also the highest since the firm was established.

“We are now on a more positive financial trajectory and we are looking to modernise our operations and expand our services.

“We are also embarking on a number of initiatives to further improve our margins,” Ms Ndege added.

She expressed the firm’s determination to fully automate its semi-manual systems and the firm will also look into the cost of electricity and align it with the cost of production.

“We want the price of electricity to reflect operational costs.”

Customer experience and care director Martin Mwambene promised that Tanesco will work round the clock to ensure that the company delivers services that meet customers’ expectations.

He said Tanesco currently has 4.4 million customers, with commercial customers numbering about 4,000.

“Commercial customers account for close to 50 percent of our revenue,” Mr Mwambene said.

In the 2021/22 financial year alone, Tanesco connected 504,366 customers, thanks to improvement of the company’s services.

Mr Mwambene said the company had reduced the compliance costs for new customers who want to be connected with electricity.

“In 2022/23 it took one an average of nine days to be connected with electricity. This is a significant improvement if you compare it to 35 days in 2021/22,” he noted.

“To improve our services even better we will keep the momentum going when it comes to addressing challenges that our customers are going through.

“We will maintain an average of 24 hours that we are presently spending to address challenges raised by our customers.”

Deputy managing director in charge of generation Pakaya Mtamakaya expressed the company’s determination to have in place strong systems meant to improve its efficiency.

“By having healthy systems, you set a stage for power quality and stability,” he said.

He said power losses during transmission and distribution decreased to 14.54 percent in 2022/23 compared to 15.18 percent in 2020/2021.

Going by the official data, Tanzania’s total power installed capacity is 1,900MW.

On the other hand, the average electricity consumption in Tanzania stands at between 1,300 and 1,400MW.

The government’s vision entails producing 5,000MW by 2025.

This suggests that the completion of the 2,115MW Julius Nyerere Hydropower project and other projects like the 185-MW-Kinyerezi one extension and the 85-MW Rusumo, will come as a boost to the government’s vision.

According to Tanesco’s Chande, the Sh6.55 trillion worth JNHP, which is 90 percent complete, is expected to start generating power in June next year.

Tanzania’s electricity generation comes mostly from natural gas (65-70 percent), with the rest being hydropower and other sources.