Tanzania: World Bank opposes Tanesco divesture

PRIVATIZATION of Tanzania Electric Supply Company Limited (TANESCO) will not solve the country’s regular power shortages because what is needed is massive investment in the state owned firm.

Outgoing World Bank Country Director John McIntyre argued when he announced a 2.8 billion US dollar (over 4trillion/-) loan package spanning between 2012 and 2015 in Dar es Salaam on Wednesday.

He said the country’s chronic power problems emanate from years non-investment in new projects and poor maintenance of existing infrastructure.

“This country needs investment in new power projects capable of generating 150MW every year to meet increased demand,” said Mr McIntyre who leaves the country this month after a four year stint in the country.

He emphasized that the country’s energy sector needs both public and private investments, saying the government needed to invest heavily in Tanesco to not only implement new projects but also rehabilitate current infrastructure.

Of the 2.8 billion US dollars package, part of the funding will go to new energy projects such as Singida wind farm project and Rusumo Hydro-electric power project at Tanzania’s borders with Burundi and Rwanda.

Tanesco management which is struggling to balance its debt ridden books of accounts and renovate aged transmission and generation infrastructure has said it needs 1.3trn to meet rising electricity demand in the country to solve regular power rationing.

Tanesco’s Managing Director, William Mhando told Parliamentary Finance and Economic Affairs Committee last week in Dar es Salaam that a lasting solution to load shedding is significant investment in the energy sector.

The outgoing World Bank Country Director pointed out that huge projects like 300MW Mnazi Bay gas to electricity should also be pursued jointly by the public and private sectors to ensure that the future of the country’s energy sector is certain.

Under the new Country Assistance Strategy, World Bank targets to promote inclusive and sustainable private sector led growth, strengthen human capital and social safety nets and promote accountability and governance.

The Bank currently supports 25 national projects and five regional projects in Tanzania with a committed International Development Association portfolio of over 3.2 billion US dollars.