TANZANIA COUNTRY PROFILE

1 TANZANIA COUNTRY PROFILE20154 2015 African Development Bank GroupAll rights reserved. Printed, designed and published in C te d Ivoire 2015 Renewable Energy in Africa: TANZANIA COUNTRY ProfileThis document is extracted from the TANZANIA Investment Plan produced by the Government of TANZANIA 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.

2 By making any designation of or reference to a particular territory or geographic area, or by using the term COUNTRY in this document, AfDB does not intend to make any judgments as to the legal or other status of any territory or area. AfDB encourages printing or copying information exclusively for personal and non-commercial use with proper acknowledgment of AfDB. 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 II01 BP 1387 Abidjan 01, C te d Ivoire 5 Renewable Energy in Africa: TANZANIA COUNTRY Profile6 Table of conTenTsAcronyms and Abbreviations.

3 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 ..17I. COUNTRY Context ..20 Geography and climate ..20 Political context ..20 Socio-economic demographic context ..20II. 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 .. Policy, Strategy and Regulatory Framework ..40 Mainstreaming energy & RE into national development policies.

4 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 ..43V. 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 ..51VI. Energy Investments and Competitiveness in the Electricity Sector ..56 Competitiveness of RE grid-connected generation.

5 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 ..597 Renewable Energy in Africa: TANZANIA COUNTRY ProfileForeign 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 ..65In terms of economic and financial issues ..66 Appendix ..67 Main stakeholders contacts ..67 References and data sources ..678 AFDF rench Development AgencyAfDBAfrican Development BankARGeoAfrican Rift Geothermal FacilityBESTB iomass Energy Strategy TanzaniaCDMC lean Development MechanismCIFC limate Investment FundsCOSSCost of Service StudyCOSTECHT anzanian Commission for Science and TechnologyDFIDUK Department for International DevelopmentE&SEnvironmental and SocialEPP Emergency Power ProducerESIAE nvironmental and Social Impact AssessmentESMFE nvironmental and Social Management FrameworkEWURA Energy and Water Utilities Regulatory AuthorityGDPG ross Domestic ProductGHGG reenhouse Gas GIZG erman Technical Cooperation AgencyGWhGiga watt per hourHDIH uman Development IndexIEAI nternational Energy AgencyIFCI nternational Finance CorporationIPInvestment planILSI

6 Nformation and Lessons SharingIPPI ndependent Power Producer JICAJ apan International Cooperation AgencyKWhKilo watt per hourLEDL ight Emitting DiodeMDBsMultilateral development banksMEMM inistry of Energy and MineralsMEPIM ultidimensional Energy Poverty IndexMTOEM illion tons of oil equivalentMTPYM illion tons per yearMWhMegawatt houracRonYMs anD abbReVIaTIons9 Renewable Energy in Africa: TANZANIA COUNTRY ProfileNGONon-governmental organizationNORADN orwegian Agency for Development CooperationPPPP ublic Private PartnershipPSMPP ower System Master PlanPVPhotovoltaicRAPR esettlement Action PlanRERenewable energy REAR ural Energy AgencyREFR enewable Energy FundRPFR esettlement Policy Framework SIDAS wedish International Development Cooperation AgencySPPS mall Power ProducerSPPAS mall Power Purchase AgreementSREPS caling Up Renewable Energy ProgramTANESCOT anzania Electric Supply CompanyTAREAT anzania Renewable Energy AssociationTASFT ransactions Advisory Services FacilityTaTEDOT anzania Traditional Energy Development OrganisationTBST anzania Bureau of StandardsTEDAPT anzania Energy Development and Access ProjectTZST anzanian

7 ShillingUNDPU nited Nations Development ProgramUNFCCCU nited Nations Framework Convention on Climate ChangeCurrency Exchange Rate - March 2014 - 1 USD = TZS 1 63910acknowleDgMenTsThis COUNTRY PROFILE is part of the work undertaken by the African Development Bank (AfDB) in the context of its new Strategy 2013-2022, whose twin objectives are inclusive and increasingly green growth . The Bank mobilizes climate finance including from the Climate Investments Funds, the Global Environment Fund and other funding instruments for its regional member countries and provides technical assistance for them to embark on a low carbon, climate resilient development pathway. The CIF-AfDB team coordinated by Mafalda Duarte, Chief Climate Change Specialist, has prepared this knowledge piece.

8 The work was led by Florence Richard, Senior Climate Change Specialist, with support from Giorgio Gualberti, Renewable Energy Specialist; Umang Goswami, Private Sector Specialist; Anil Cabraal, Renewable Energy Specialist; Alemayehu Wubeshet-Zegeye, Chief Power Engineer; and Magdaline Nkando, Knowledge Management Specialist. The AfDB TANZANIA Field Office provided support during the preparation of the Scaling-Up Renewable Energy Programme (SREP) Investment Plan, especially Stella Mandago, Senior Energy Specialist. The CIF-AfDB team is grateful to the Government of TANZANIA , national counterparts and non-governmental organization and private-sector representatives who contributed to this brief.

9 More specifically, we would like to acknowledge the intensive work done by the national SREP Task Force in 2012/2013 for the preparation of the SREP Investment Plan (from which this brief is extracted) under the leadership of Eliakim C. Maswi, Permanent Secretary, ministry of Energy and Minerals (MEM), and Edward Ishengoma, Assistant Commissioner for Renewable Energy, MEM. The Task Force included Kato Kabaka, TANZANIA Electric Supply Company Limited (TANESCO); Ng anzi Kiboko, Energy and Water Utilities Regulatory Authority (EWURA); Mkoma Masanyiwa, MEM; Jacob Mayalla, MEM; Anastas Mbawala, EWURA; Ngereja Mgejwa, MEM; Elineema Mkumbo, Rural Energy Agency (REA); Taramaeli Mnjokava, Geological Survey of TANZANIA ; Msafiri Mtepa, EWURA; Felix Ngamlagosi, EWURA; Gissima Nyamo-hanga, REA; and Vestina Rwelengera, REA.

10 We would also like to acknowledge the critical contribution provided by the World Bank (WB) Group in preparing the SREP Investment Plan, especially Dana Rysankova, Senior Energy Specialist, WB; Stephanie Nsom, Energy Specialist, WB; Pepukaye Bardouille, Senior Energy Specialist, International Finance Corporation (IFC); Murefu Barasa, Energy Specialist, IFC; and Itotia Njagi, Lighting Africa Program Manager, IFC. This COUNTRY PROFILE was peer reviewed by Julian Blohmke, Renewable Energy Specialist, AfDB; and Stella Mandago, Senior Energy Specialist, AfDB. Amel Abed and Samar Yahyaoui provided administrative support to the team. P n lope Pontet, Sala Patterson and Tharouet Elamri provided support for editing, laying out and disseminating this COUNTRY hope that the information provided in this document will contribute to mobilizing additional investors and partners in financing low-carbon development in Energy in Africa: TANZANIA COUNTRY ProfilefoRewoRDTanzania is endowed with diverse renewable energy resources, ranging from biomass and hydropower to geothermal, solar and wind.