The PPP Centre The Director General David Kafulila. Photo: File
By Adonis Byemelwa
Shinyanga: The government has initiated discussions with two foreign companies planning to invest a total of $1.2 billion (approximately Sh 3.2 trillion) in electricity transmission projects through a public-private partnership (PPP). These companies have already started talks with the PPP Centre regarding the investment.
If successful, this will mark the first time in Tanzania's history that significant investment in electricity transmission will occur via PPP.
The PPP Centre The Director General David Kafulila, stated in Dodoma recently that the government is currently learning from the experiences of Latin American and Asian countries that have substantial expertise in public-private collaborations for building energy infrastructure. The countries referenced include India, Peru, Chile, Brazil, and the Philippines.
“The responsibilities of the PPP Centre include coordinating and analyzing all investment projects based on the public-private partnership model,” Kafulila explained.
Tanzania faces several challenges regarding PPP in electricity transmission projects, including regulatory issues, legal frameworks, and a lack of experience and expertise in some public institutions.
There is a pressing need for capacity-building among public institutions and civil servants to ensure effective government participation in PPPs within the energy sector.
Development stakeholders have emphasized the significance of PPP projects in constructing electricity transmission networks in East African countries, including Tanzania, Uganda, and Kenya.
“Energy economists indicate that the energy sector can become financially self-sufficient if electricity prices are set commercially,” Kafulila added. He highlighted that “Tanzania sells electricity at lower prices than any other East African country, which is why it leads in having an inclusive economy in the southern Sahara region.”
In 2022, the Ministry of Energy announced that the government requires $1.9 billion (over Sh 5 trillion) to enhance the country’s electricity transmission systems.
Currently, Tanzania generates surplus electricity but struggles to transport this excess to regions both domestically and internationally that are facing energy shortages due to insufficient transmission infrastructure.
Kafulila asserted that PPPs in electricity transmission construction will yield significant benefits for the national economy, including increased electricity availability in more regions at affordable costs and stimulating the industrial economy.