Tanesco PPA agreement signed with 6 IPPs in Tanzania

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TANESCO, Tanzania’s state-owned power utility company has signed power purchase agreements (PPAs) with six independent power producers (IPPs) that are developing several renewable energy projects in the East African country.

As per the Tanesco PPA agreement, the Tanzania Electric Supply Company Limited(Tanesco) will purchase 19.16 MW of electricity generated from the 36-kW hydropower project at the Ijangala Falls in Makete, the 1.7 MW Madope Hydroelectric Project on the Madope River, the 9 kW Luponde hydroelectric project on the Luhololo River in Njombe, and the 1.2 MW Maguta hydroelectric project on the Lukosi River Falls in Kilolo.

Other projects include the 5 MW hydropower project developed by NextGen Solawazi in the Kigoma Special Economic Zone, the 10 MWp solar power plant developed by SSI Energy Tanzania.

Enabling IPPs to enter Tanzania’s energy market

According to Costa Rubagumya, the senior manager for planning at Tanesco, the projects subject to the Tanesco PPA agreement are being developed under a new regulatory framework recently introduced by the Energy and Water Regulatory Authority (EWURA) of Tanzania, and which is intended at enabling IPPs to enter the country’s energy market.

‘These new rules call for Tanesco to enter into agreements with small scale power producers in areas where the national grid has not yet arrived,’ he explained adding that the small-sized IPP projects may also serve areas that are grid-connected but with unstable power supply.

The agreement between Tanesco and the IPPs is expected to be effective within a span of 18 months.

Electricity generation and distribution in Tanzania

Tanzania has, currently, a power generation capacity of around 1.5 GW, most of which comes from 696.3 MW of thermal gas and diesel power plants and from 561.8 MW of hydropower. According to the latest statistics the East African country had only 26 MW of installed solar power at the end of last year.

In terms of distribution, the country has an access rate to the electricity of around 32.7 percent, with approximately 7.7 million people living without power. The Tanzanian government, however, aims to achieve a 75 percent electrification rate by 2035.

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