Electricity is the back bone of economy in a country, and the joy to light up the hearts of its citizens.
In the Tanzania vision of 2050 a long term blueprint to transform the country into a high income industrialized economy driven by productivity highly depends on investment in energy reliability, affordability and clean energy.
Generation of electricity alone does not increase economy nor power, after power plants produce electricity they depend on a strong and reliable transmission network to reach industries, businesses or households.
Without transmission acting as a
bridge that carries bulk electricity from power station the electricity remains
stranded at generation sites.
The legal frame work governing electricity transmission restricts meaningful private sector participation.
Licensing rules governing electricity generation, transmission and distribution limit application for transmission licenses to state owned entities.
Tanzania’s broader investment and PPP policy framework actively promotes private sector participation in infrastructure development.
This creates a clear legal and policy contradiction, on one hand, the state
invites private investor and on the other hand, sector regulations lock private
investors out of transmission projects.
The Public Private Partnership provides a well structured, transparent and legally sound mechanism to bridge the gap to higher economic achievements.
PPPs as the
missing link does not imply privatization of strategic assets, rather they
allow private investment, financing, construction and operation under
government oversight and regulation.
The national electricity access latest data from 2023 shows Distribution of electricity in Tanzania is about 48% of the total population, this shows less than half of the population was connected to the power grid.
Through PPP models the government
can retain ownership of transmission assets, allocate construction and
operational risks to capable private partners, Mobilize private capital without
immediate budgetary pressure and accelerate project delivery plus network
expansion.
Brazil opened its electricity transmission sector to private participation through regulated PPP concession models.
The government retained strategic oversight and system planning, but allowed private companies to finance, build, own, and operate transmission lines under long term concessions awarded through competitive bidding.
Tariffs were regulated, performance standards were strictly enforced, and ownership reverted to the state at the end of the concession period.
This approach enabled Brazil to rapidly expand its
transmission network without overburdening public finances.
India adopted a similar but approach. Recognizing that public funding alone could not meet growing power demand, India allowed private investors to participate in transmission through Build Operate Transfer (BOT) and tariff based competitive bidding models.
Transmission projects were structured as PPPs, with risks allocated clearly between government and private partners.
Importantly, India embedded
these reforms within a strong regulatory framework, ensuring investor
confidence while safeguarding public interest.
South Africa pursued a more cautious model. While the national utility retained control over the transmission system, private sector participation was introduced through project-specific PPP arrangements, independent power transmission projects, and infrastructure financing partnerships.
Regulatory clarity and policy certainty were prioritized to
reassure investors, particularly where long-term capital was required.
International experience shows countries such as Brazil, India, and South Africa have successfully used concession-based PPP models to attract private investment into transmission while maintaining strong regulatory control and public interest safeguards.
A well developed
transmission network allows electricity to be delivered efficiently over long
distances, supports regional power trade, and ensures stability of supply.
This also enables the integration of diverse energy sources, including renewable energy, into the national grid.
Without adequate transmission, investments in generation cannot translate into increased electricity access, improved reliability, or economic growth.
For this reason, transmission forms the
critical link between power generation and its productive use in the economy.
Legal harmonization is essential for resolving the legal contradictions, PPP can unlock private investment in Tanzania’s energy transmission sector.
The Electricity (Generation, Transmission and
Distribution Activities) Rules, 202
under Rule 5 (4) This Rule pose challenges for a
Private Party to initiate expression of interest to engage in a Power
transmission line as the Rule in itself strictly prohibits involvement of
Private Sector
The provision should be amended to enable private investors to engage in investment of transmission of power line. Power transmission project is owned by state through TANESCO.
It remains the only licensed entity for regulated transmission
activities, reflecting the current regulatory restriction on private
participation.
It
doesn’t mean total eradication of state control rather it requires modernizing
the legal frame work to allow private participation through PPP arrangements,
licensing and performance set by the government and regulators.
Allowing
private investors to participate in transmission projects through PPP would
expand financing options for critical infrastructure, reduce delays caused by
funding restraints, improve efficiency and innovation in project delivery and
support long term energy security and economic growth.
Tanzania has already laid the foundation for PPP development. What remains is to ensure that sector laws do not undermine this vision.
Energy transmission should no longer be treated as an area
closed to private participation by default, especially where PPPs can protect
public interest while delivering results.