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Tanzania is considering whether to allow private sector participation in electricity transmission, a move that could mark a major shift in the country’s energy policy as demand for power continues to grow alongside ambitions for rapid industrialisation.
The debate emerged during the second public dialogue organised by the Public Private Partnership Centre (PPPC) at the University of Dar es Salaam on March 30, 2026, where policymakers, economists, and academics discussed how public–private partnerships could help close financing gaps in the energy sector.
David Kafulila, Executive Director of the Public Private Partnership Centre (PPPC), said concerns that transmission infrastructure is too sensitive for private investment should not be used to block reform.
“Security concerns are real, but they are not enough on their own to say the private sector cannot participate,” he said during the discussion.
For years, Tanzania’s electricity sector has been divided into three core functions – generation, transmission, and distribution – with transmission widely viewed as a strategic national asset that should remain under full state control.
Critics of private participation argue that opening the segment to investors could expose the country to risks and weaken government authority over critical infrastructure.
Kafulila said the debate should instead focus on how projects are structured.
“PPP is about structuring. If there are security concerns, the right approach is to reflect those concerns in the design of the project and in the contracts,” he said. “It is not enough to simply say transmission is sensitive and therefore the private sector cannot be involved.”
He added that while only a limited number of countries have allowed private investment in transmission, the model already exists in several parts of the world. He cited Brazil and India as examples where private firms have invested in transmission infrastructure without compromising national security.
The issue is becoming more urgent as Tanzania pushes to expand electricity generation and meet long-term development targets. According to Kafulila, the country aims to reach around 70,000 megawatts of installed capacity by 2050 to support a rapidly growing economy.
“To reach 70,000 megawatts, we need speed and large-scale investment in generation, transmission, and distribution,” he said. “This cannot be financed only through taxes and loans.”
He warned that demand could even exceed the target if Tanzania succeeds in building a one-trillion-dollar economy. “Look at South Africa. It already has more than 60,000 megawatts of installed capacity and its economy is still below one trillion dollars,” he said. “That shows the scale of what we need to prepare for.”
Dr. Eva Hawa Senare, a lecturer and policy researcher on infrastructure and development, said security concerns should be addressed through better contracts rather than being used to block private investment altogether.
“It is correct to be cautious when it comes to national security, but it is also important not to make decisions without examining how those concerns can be addressed in the structure of the projects,” she said.
Senare said Tanzania should learn from international experience while maintaining a clear understanding of national interests. National interest should not become a black box that prevents development decisions.
“The important thing is to design agreements that protect the country while still allowing investment to come in,” she said.
Buberwa Kaiza, an economist and public policy analyst, said the debate should ultimately focus on whether the electricity system is meeting the expectations of citizens and businesses.
“All these discussions must lead to one result: reliable and affordable electricity for the people,” he said. “Ownership structures are important, but performance is what matters most.”
The discussion builds on a broader assessment presented earlier in the same forum by Prof. Semboja Haji Hatibu Haji, a professor of economics at the State University of Zanzibar, who said public–private partnerships have already played a strategic role in expanding Tanzania’s energy sector.
“PPP arrangements have helped mobilise investment, increase generation capacity, and expand electricity access,” Prof. Haji said. “But the experience has been mixed. There have also been governance, financial, and institutional challenges. We have seen projects succeed in adding new capacity, yet at the same time, failures in ensuring value-for-money, transparency, and risk allocation remain a concern.”
Prof. Haji noted that Tanzania’s current electricity generation is dominated by hydropower and natural gas, with installed capacity at about 4,000 to 4,500 megawatts by 2025.
He said that the sector has expanded rapidly, but diversification is needed. Future growth must include solar, wind, and geothermal energy to ensure a sustainable, resilient power system.”
He added that the transition will require careful planning and innovative PPP structures.
“By 2030, we expect a mixed-energy system, with natural gas at the core, supported by hydropower, and increasing contributions from renewables,” he said. “Achieving this will depend heavily on how private sector partners are brought into transmission and generation, and how contracts are designed to protect national interests while attracting investment.”
Prof. Haji also emphasized the role of regulation and governance.
According to him, a successful PPP program is not just about investment; it is about the state maintaining strategic oversight, ensuring projects meet technical and safety standards, and that risks are shared fairly.
“Without these elements, private participation could create more problems than solutions.”
As the dialogue concluded, participants appeared to converge on a pragmatic approach: private investment may not replace the state in the energy sector, but it is increasingly clear that Tanzania will need it to achieve long-term energy targets and support industrial growth. The question is not whether private investors should be involved.
“The question is how to structure their participation so that the country gains maximum benefit safely and sustainably,” he noted.
