TANZANIA COUNTRY PROFILE 2015 © 2015 African Development Bank Group All rights reserved. Printed, designed and published in Côte d’Ivoire – 2015 Renewable Energy in Africa: TANZANIA Country Profile his document is extracted from the Tanzania Investment Plan produced by the Government of TTanzania with support from the African Development Bank (AfDB) and the World Bank Group under the Scaling Up Renewable Energy Program in Low Income Countries, a program of the Climate Investment Funds. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the AfDB, its Board of Governors, its Board of Directors or the governments they represent. AfDB and its Board of Directors do not guarantee the accuracy of the date included in this publication and accept no responsibility for any consequence of their use. 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Users are restricted from reselling, redistributing or creating derivative works for commercial purposes without the express written consent of the AfDB. ©AfDB: cover page ©Chris Greacen: pages 2, 38 ©Waldorf for AfDB: pages 12, 22, 37, 46, 62 ©Chris 73: page 18 ©Mike Gratwicke: pages 30, 63, 64 ©Shutterstock: page 46 African Development Bank Group Immeuble du Centre de commerce International d’Abidjan CCIA Avenue Jean-Paul II 01 BP 1387 Abidjan 01, Côte d’Ivoire www.afdb.org 4 Renewable Energy in Africa: TANZANIA Country Profile 5 TABLE OF CONTENTS Acronyms and Abbreviations .........................................................................................8 Acknowledgments ...........................................................................................................10 Foreword ..........................................................................................................................11 Executive Summary .........................................................................................................12 Energy sector challenges ....................................................................................................12 Key achievements ..............................................................................................................13 Renewable energy viability ..................................................................................................14 Constraints to renewable energy development ...................................................................15 Key Energy Figures ........................................................................................................17 I. Country Context ..........................................................................................................20 Geography and climate .....................................................................................................20 Political context .................................................................................................................20 Socio-economic demographic context ..............................................................................20 II. Energy Sector Profile ................................................................................................24 Energy sector description ..................................................................................................24 Current status of electricity sector ......................................................................................24 Electricity distribution .........................................................................................................26 III. Renewable Energy Potential and Implementation ..................................................32 Renewable energy potential ...............................................................................................32 Large hydropower ..........................................................................................................32 Small hydropower ..........................................................................................................32 Geothermal energy ........................................................................................................33 Wind ..............................................................................................................................34 Solar ..............................................................................................................................34 Biomass.........................................................................................................................35 IV. Policy, Strategy and Regulatory Framework ...........................................................40 Mainstreaming energy & RE into national development policies ..........................................40 Energy policies ..................................................................................................................41 Energy policy and strategic framework ..........................................................................41 Tariffs .............................................................................................................................42 Rural electrification .........................................................................................................42 Small power producers regulation ..................................................................................43 Policies promoting private investments for the energy sector .............................................43 Trade barriers and trade policies (tariff and non-tariff barriers in RE technologies) ................43 International agreements on energy ....................................................................................43 V. Energy Stakeholders and Institutional Framework .................................................48 Structure of the energy sector ............................................................................................48 Ministries with energy competences ...................................................................................49 Energy regulator .................................................................................................................49 Energy utility(ies) operating in the production, transmission and distribution segment ..........49 Other private companies .....................................................................................................50 NGOs and training institutions active in the area of energy ..................................................51 VI. Energy Investments and Competitiveness in the Electricity Sector ....................56 Competitiveness of RE grid-connected generation ............................................................56 Competitiveness of RE off-grid generation ........................................................................57 Prioritization of energy investments ....................................................................................58 The Big Results Now Initiative .......................................................................................58 The Power System Master Plan 2012-2030 ...................................................................59 6 Renewable Energy in Africa: TANZANIA Country Profile Foreign direct investments and clean development mechanism ..........................................61 VII. RE Deployment Barriers and Possible Mitigation Measures ................................64 Institutional, policy, regulatory and legal frameworks ...........................................................64 Knowledge sharing and capacity issues .......................................................................65 In terms of economic and financial issues ...................................................................66 Appendix .........................................................................................................................67 Main stakeholders’ contacts ...............................................................................................67 References and data sources .............................................................................................67 7 ACRONYMS AND ABBREVIATIONS AFD French Development Agency AfDB African Development Bank ARGeo African Rift Geothermal Facility BEST Biomass Energy Strategy Tanzania CDM Clean Development Mechanism CIF Climate Investment Funds COSS Cost of Service Study COSTECH Tanzanian Commission for Science and Technology DFID UK Department for International Development E&S Environmental and Social EPP Emergency Power Producer ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework EWURA Energy and Water Utilities Regulatory Authority GDP Gross Domestic Product GHG Greenhouse Gas GIZ German Technical Cooperation Agency GWh Giga watt per hour HDI Human Development Index IEA International Energy Agency IFC International Finance Corporation IP Investment plan ILS Information and Lessons Sharing IPP Independent Power Producer JICA Japan International Cooperation Agency KWh Kilo watt per hour LED Light Emitting Diode MDBs Multilateral development banks MEM