1. EABC/EAC ENERGY CONFERENCE: 8-9TH JUNE, 2009. AVAILABLE BUSINESS OPPORTUNITIES IN THE ENERGY SECTOR By Eng. B.J. Mrindoko

2. ENERGY SECTOR IN TANZANIA 1. ENERGY SITUATION 2. ENERGY RESOURCES 3. POLICY AND INSTITUTIONAL FRAMEWORK 4. CHALLENGES IN THE ENERGY SECTOR 5. INVESTMENT OPPORTUNITIES

3. ENERGY SITUATION Energy demand in Tanzania has grown rapidly due to population growth and the increase in economic activities during the last 15 yrs. The estimated total energy annual consumption is about 22 million tonnes of oil equivalent (TOE). Energy consumption in rural areas accounts for about 85% of total national energy consumption.

4. ENERGY SITUATION AND RESOURCES Hydro power potential estimated at 4.7 GW, 3.2 firm capacity, 561 MW developed Coal reserves are estimated at about 1,200 million tonnes, of which 304 million tonnes are proven. Natural gas is estimated at 45 billion cubic metres of proven reserves. Current use 292 MW (about 600 MW expected in the next 30 yrs), Gas also used in industries in Dar es Salaam. Average solar insolation is about 215W/m2. Studies on geothermal, uranium, wind, biofuels, and ocean based energy are going on (Task Force in place. Few investors in pilot stage). Biomass (Fuel wood and Charcoal) – Deforestation 91,272 ha/pa of forest – Reduce precipitation, hence inflow dams reduced output from hydropower plants

5. ENERGY RESOURCES SITUATION ( ENERGY CONSUMPTION PATTERN ) Biomass-based fuels account for more than 90% Imported petroleum and electricity, account for about 8% and 1.2%, respectively Natural gas is now being used power generation and in industry Coal, solar and wind account for less than 1% of energy used

6. ENERGY RESOURCES AND SITUATION ( ENERGY CONSUMPTION PATTERN ) Imports of petroleum products(8% of energy supply) cost the country about 30% of its foreign currency earnings

7. ENERGY SITUATION Sub-Sahara Africa Energy Poverty Economic Poverty Electrification 14% TANZANIA

9. POLICY AND INSTITUTIONAL FRAMEWORK SUPPORTIVE INSTRUMENTS AVAILABLE National Energy Policy was reviewed in 2003. It is in place to take consideration the need to: Have affordable and reliable energy supplies in the whole country; Reform the market for energy services and establish an adequate institutional framework; Enhance the development and utilization of indigenous and renewable energy sources and technologies;

10. POLICY AND INSTITUTIONAL FRAMEWORK SUPPORTIVE INSTRUMENTS AVAILABLE Adequately take into account environmental considerations for all energy activities; Increase energy efficiency and conservation in all sectors; and Increase energy education and build gender- balanced capacity in energy planning, implementation and monitoring.

11. SUPPORTIVE INSTRUMENTS AVAILABLE The New Electricity Act assented by the President in June, 2008 will have a pivotal role to attract substantial private sector participation in the development of the power sector. Energy and Water Utilities Regulatory Authority- EWURA) became operational in 2006 with the role for ensuring regulatory oversight to promote private sector investment in the energy sector. The Petroleum Act, 2008 aiming at strengthening the petroleum downstream sub-sector was assented by the President in June, 2008

12. SUPPORTIVE INSTRUMENTS AVAILABLE Model Production Sharing Agreement Petroleum (Exploration and Production), 1980

13. SUPPORTIVE INSTRUMENTS AVAILABLE The Petroleum Act, 2008 and Electricity Act, 2008 Regulations are being finalized. Petroleum Standards: The Ministry sets standards of petroleum products before enforced by TBS and EWURA. Rural Energy Agency (REA) became operational in 2007 for furtherance of rural electrification programs via the Rural Energy Fund (REF).

14. CHALLENGES IN THE ENERGY SECTOR Dependence on traditional biomass. Dependency on hydropower in electricity generation. Reliance on imported petroleum products. Poverty – poor purchasing power services Inefficient energy consumption To have affordable access to electricity services for the rural population;

15. CHALLENGES OF ENERGY SECTOR (ENERGY CRISIS CAUSED) Drought for three consecutive years since 2003 to date has reduced hydropower contribution to overall electricity generation from 65 to 24% Escalating local and world prices. High deforestation rate has caused woodefuel scarcity.

16. OPPORTUNITIES IN THE ENERGY SECTOR Emergency Power Projects Hire thermal generators. Develop gas and coal projects for electricity generation. Maintain the existing hydropower plants. Bulk procurement of marketing of petroleum products. Management and operation of strategic oil reserves.

17. OPPORTUNITIES Promote interconnection with neighbouring countries, EAPP and SAPP Reduce dependence on hydropower by diversifying sources e.g. natural gas, coal, biomass co-generation, wind, small hydropower and solar Reduce reliance on imported petroleum products by promoting biofuels (bioethernol and biodiesel). Reduce dependence on traditional biomass by efficient conversion – improved charcoal production, improving cook stove, etc. increase access to modern energy services (esp. electricity) by speeded promotion of rural energy through the rural Energy Agency.

18. OPPORTUNITIES CAPITAL INVESTMENT IN POWER INFRASTRUCTURE ESTIMATED AT U$ 2 BILLION IN THE COMING 5 YEARS DEVELOPMENT OF ALREADY DISCOVERED NATURAL GAS RESERVES AND THE SUPPORT INFRASTRUCTURE. EXPLORATION FOR OIL AND GAS. DEVELOPMENT OF SERVICE INDUSTRY FOR PSTREAM. DEVELOPMENT OF COAL AND GEOTHERMAL RESOURCES. MANUFACTURE OF TOOLS MATERIALS AND OTHER ITEMS REQUIRED IN THE SECTOR

19. CONCLUSION We invite the business community to invest in the areas mentioned in this energy sector.

20. THANK YOU