Tanzania plans to convene stakeholders in the compressed natural gas (CNG) sector to address investment challenges and reduce project costs, a senior energy official said on Friday.
Deputy Permanent Secretary in the Ministry of Energy, Dr. James Mataragio, said the meeting will bring together investors, operators, and regulators to exchange knowledge and explore ways to ease financing difficulties that have slowed down expansion in the sector.
“Technology in the gas sector is evolving rapidly. Some companies source equipment from China, others from Canada. By bringing them together, they will be able to exchange experiences, which will help cut investment costs,” Dr. Mataragio told reporters during a tour organized by the Tanzania Petroleum Development Corporation (TPDC) to inspect CNG filling stations under construction in Dar es Salaam.
He dismissed perceptions that gas projects are prohibitively risky and costly, noting that expenses vary depending on project scale.
“For example, the Tanhealh station was built at a cost of TZS 1 billion ($390,000). We encourage investors to continue putting money into this sector because government institutions are ready to support them quickly,” he said.
Dr. Mataragio said Tanzanian banks had been hesitant to provide loans to CNG developers due to limited understanding of the business model, but some lenders are beginning to shift their stance.
“Initially, it was difficult for banks to provide credit. Now they are starting to recognize its potential and have begun lending. I urge banks to treat this like any other business and provide financing to investors,” he said.
The government has set a target for 80% of Tanzanians to be using clean energy by 2034, underscoring its push to expand natural gas use in transport and households.
On the investment side, BQ Construction Limited Chief Executive John Bura said his company is building a mother station in Dar es Salaam with the capacity to fill 180 vehicles per day using three pumps. The project, estimated at TZS 5 billion ($1.9 million), is expected to be completed in six months.
“The biggest challenge is access to bank financing. Many lenders hesitate because they claim they don’t understand the risks involved in projects like this. But as investors, we are ready to commit,” Bura said.
Meanwhile, Puma Energy’s natural gas project manager, Chagaka Kalimbia, said the company is constructing a TZS 6 billion ($2.3 million) mother station with four pumps capable of serving eight vehicles simultaneously.
“The station will be completed in October. Initially, we planned to build a conversion center for vehicles, but many cars now arrive in Tanzania already converted. We appreciate the government’s decision to remove certain charges, which has supported sector growth,” Kalimbia said.
